Inside Graham’s Operations Team

After almost a decade working as a private equity operating partner, Scott Glickman of Graham Partners says it’s the variety of the role that keeps him interested.

“I always considered it an interesting industry,” he says, “to work with multiple companies to drive value.”

Glickman, a senior operating partner at Graham, was in operations at TPG Capital for a few years. He came to private equity straight from working at Pratt & Whitney as director of quality globally, where he had started thinking about becoming an operating partner.

For Glickman, the appeal of leading the operations team at Graham is that he has the opportunity to work in several areas: looking at portfolio-wide programs and opportunities, working on value-creation initiatives at specific portfolio companies, and participating in due diligence.

“The most important thing is selecting what to work on with each portfolio company,” he says. “We always start with a strategic planning process. After we acquire a business, we sit down with the management team, fine-tune things, and identify key value-creation initiatives. We then ask, ‘Where does the management team need to be supplemented?’ [Our] companies are often on the small side, so we look for where our team can add value.”

During due diligence, prior to the acquisition of a vinyl siding manufacturer, that meant identifying that the company’s resin procurement processes weren’t very robust and had room for improvement that could boost the company’s existing $6M of EBITDA by $1M. Glickman’s team identified resin procurement cost savings, which ultimately saved the company $3M, and improved EBITDA by 50 percent, he says.

But there is one thing that Glickman includes in all of strategic plans: revenue growth. “You can cost-cut your way to an adequate return, but you need to grow [revenue] to have an excellent return,” he says.

In addition to bringing in outside advisors—usually industry experts—during the diligence period, Glickman says advisory boards have also proven to be an effective tool for Graham’s portfolio companies.

“One thing we’ve found very useful is the creation of advisory boards for our businesses…with increasing regularity in the past few years,” he says. He and others on the operations team at Graham identify two to four industry experts such as retired executives, and hire them for an advisory board, which then meets with the management team of a portfolio company a few times a year to help identify new customers and turbo-charge the growth plan, Glickman says.

This advisory board strategy has served the firm well in its investment in a remanufacturing business. An advisor recommended a customer that the portfolio company should be working with, and eventually they signed a contract with them. “Through an introduction from an advisory board member, we won the business’ largest customer,” he says.

In addition to being a hands-on “activist investor,” Graham Partners’ approach is looking equally at value creation and risk mitigation. “Adding value is an exciting topic that everyone wants to discuss. However, you can destroy value if you haven’t properly assessed and prepared for the inherent risks that come with running a business,” Glickman says.