Reprogrammed outlook

Value creation talks, strategic case studies, dinner atop the University of Michigan football stadium and a trip to a renowned food company in Ann Arbor – these are some of the experiences participants at Riverside University had at last month’s executive education programme.

The programme, created three years ago in a joint effort by New York-based private equity firm The Riverside Company and the University of Michigan’s Ross School of Business, is a week-long opportunity for chief executives of Riverside’s portfolio companies to come together and engage in discussions. It is meant for the executives to escape their daily workings in the office and share ideas for increasing value in their businesses and learning, according to the programme founders.

“We felt something like this would be good for our own executives in our portfolio companies to spur some thinking, some innovation, some inspiration,” Riverside’s managing partner Ron Sansom told Private Equity International. “Executives don’t get many opportunities like this; in a group setting to share ideas, challenges, learn some updated marketing.”

Sansom had previously worked in big corporations such as General Electric and Honeywell, where he said there was lots of continuing executive education on operation, growth and other areas that he found stimulating. So he, along with Riverside’s co-chief executive Stewart Kohl and Ross School of Business’ Melanie Barnett, spearheaded a programme made for this exact purpose.

CASE STUDY

One aspect of the programme designed to stimulate the participants is the case study component. With support from the Ross School’s private equity faculty, Riverside University designs two case studies each year that have applicability across all portfolio companies.

“We try to pick companies where there’s something important going on and there are frameworks and conclusions to be learned from those situations,” Barnett told Private Equity International. The cases are always from current Riverside portfolio companies.

This year, the case studies looked at a US-based home service franchisor company and a European microphone company, Sansom said. Although participants may be reserved at the beginning of the programme, they quickly develop collegiality and become involved with the discussions.

“The attendees get very passionate about their business and you can just see it,” Sansom said. “When a lightbulb comes on when we’re talking about, for example, the customer acquisition cost for some companies, it’s truly a wonderful experience for everybody.”

David Brophy, Ross School’s director of the office for the study of private equity, agreed participants quickly develop connections, especially after a group dinner at Ann Arbor-based food company Zingerman’s.

GROUP TALKS

Brophy gives classroom talks to participants on private equity and what its business model entails.

“It’s very much being delivered to portfolio companies, who may know as far as their own company is concerned but not much about what private equity is,” he said. “It’s not just a lecture from me. It’s the exchange of ideas, insights, attitudes.”

The programme costs about $5,000 per attendee, according to Sansom, but there is more value gained for the portfolio companies, according to all three.

“Most of the time, they realise, particularly at the C-level, they are focused on their task in front of them that they can’t see strategically,” Brophy said. “You got to steer as well as roll.”

Barnett agreed, saying the financial value created for the companies is far more than what it cost them to attend the programme. “If they’re smart decision-makers, they’d keep attending the programme,” she said, chuckling.

This year, there were nine portfolio companies represented at the conference, and Sansom would like to see between 10 and 15 companies each year in the future. The programme executives come together every year to identify what worked, what failed and what ways they could improve it for the companies.

“It gets tweaked; we’re about continuous development,” Barnett said.