The Private Equity Podcast, by Raw Selection

Building Stronger Investor-Operator Relationships Insights from GE with Richard Neff

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Dec 31, 2024

Richard Neff, a seasoned operator with a 25-year tenure at GE, shares his wealth of experience in private equity. He discusses the critical balance between ambitious plans and achievable goals, especially for $20M revenue businesses. Neff highlights the often-overlooked importance of investing in infrastructure and human capital. He also reflects on GE's structured approach to M&A and the lessons learned from navigating growth and financial crises, emphasizing strong investor-operator relationships as key to success.

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ADVICE

Focus on Execution

Private equity firms often create over-ambitious plans for portfolio companies.
Focus on one or two key initiatives at a time for better execution in smaller businesses.

INSIGHT

Key Levers for Small Businesses

Human capital and growth initiatives are the biggest levers for small businesses.
These areas often align with private equity goals and can benefit from their investment.

INSIGHT

Evaluator vs. Doer Disconnect

A disconnect often exists between private equity evaluators and company operators.
This leads to surprises post-acquisition, especially regarding a company's actual capabilities.

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Welcome back to The Private Equity Podcast by Raw Selection, hosted by Alex Rawlings. Today’s guest is Richard Neff, a proven operator and operating partner with decades of experience in private equity and a 25-year career at GE Capital and GE Healthcare. In this episode, Richard shares insights into the investor-operator relationship, the importance of infrastructure, and lessons learned from GE’s legendary playbook for growth and transformation.

Breakdown;

[00:00] Reflecting on 2024 and looking ahead to 2025.

[00:28] Introduction to Richard Neff: His background in healthcare, tech-enabled services, industrial services, and 25 years at GE.

[00:57] One common private equity mistake: Over-ambitious plans versus focused execution.

[02:17] What typically moves the needle in $20M revenue businesses: Human capital and growth initiatives.

[03:38] Key areas private equity firms can better align with portfolio executives.

[04:36] The gap between evaluators (investors) and doers (operators): Surprises post-acquisition.

[06:29] The infrastructure gaps often missed: Sales team depth, product development, and capability issues.

[07:53] Why infrastructure and capability investment is underestimated and often delayed.

[09:21] Richard’s experience at GE Capital: A private equity-style approach to business building.

[10:49] How GE executed a structured playbook for M&A, growth, and cultural integration.

[11:45] Lessons from managing hyper-growth businesses pre- and post-financial crisis.

[12:44] Richard’s key takeaways from GE:

The value of a structured 100-day plan.
Building global networks and talent development.
Creating a sense of belonging and shared purpose.

[14:36] Applying GE’s lessons to smaller portfolio companies: Building camaraderie and engagement.

[15:35] The power of networking within private equity portfolio companies.

[16:58] Why private equity firms often miss the value of connecting their C-suite leaders.

[18:26] Richard’s influences: His diverse reading list including Fast Company, Wired, and Financial Times.

[19:47] Encouraging problem-solving and situational adaptability through varied experiences.

[20:13] How to contact Richard Neff.

To be added to the book waitlist, you can email alex.offer@raw-selection.com

Thank you for tuning in!

Connect with Richard on LinkedIn here.

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Lastly, if you have any feedback on the podcast or want to reach out to Alex with any questions, send an email to alex.rawlings@raw-selection.com