Sales leaders at portfolio companies critical in low-growth environment: panel

  • CFOs are critical but their role is easier to find
  • U.S. economy grew 1.2 pct in second quarter: WSJ
  • Head of sales is more fundamental in driving growth

While the chief executive position is the more critical post to fill at portfolio companies, the chief financial officer’s role is often not viewed as important, according to executives speaking at the PartnerConnect West conference in San Francisco.

The CEO is the most urgent position to fill because the role “sets the culture for the company,” said Jean-Pierre Conte, chairman and managing director of Genstar Capital LLC, who spoke on the Sept. 27 panel “Bringing Operational Talent to Bear on Portfolio Companies.”

CFOs are critical to portfolio companies but they’re easier to find, Conte said. In contrast, strong sales and market leaders, or chief revenue officers, are more difficult to find, he said. “There is a lot of good CFO talent to choose from,” he said.

Conte pointed to the low-growth environment. The U.S. economy grew at a meager 1.2 percent rate in the second quarter, the Wall Street Journal reported in July. Growth is at a premium, Conte said, with senior sales and marketing leaders “more critical than ever.”

Kaustuv Sen, a principal with Blue Sea Capital who spoke on the panel, said his firm can wait six months before hiring a portfolio company CFO.

And Aaron Money, a partner at Friedman, Fleischer & Lowe LLC, said the head of sales is usually more fundamental in driving growth at portfolio companies than the CFO. Friedman Fleischer will sometimes use its investment professionals to supplement a CFO’s efforts, said Money, who also spoke on the panel.

This is more difficult to do with sales or operations, he said. “We can live with a CFO who is not at the top of his or her game,” Money said.

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The skyline of San Francisco and the south tower of the Golden Gate Bridge are seen from the Marin Headlands as they rise above the fog in Sausalito, California, on March 21, 2012. Photo courtesy Reuters/Robert Galbraith