The Next Big Question

Episode 15
Hosted by: Drew Lazzara and Liz Ramey

Guy Mason


Bourne Leisure

Guy is the CIO for Bourne Leisure and the founding director of Digital Decision, where he works with private equity firms to align business strategy with technology. In his career, Guy has helped organizations evaluate tech capabilities and realize value quickly.

What Can Private-Equity M&A Teach Leaders about Technology Value?

MAY 4, 2021

This week, CIO Guy Mason of Bourne Leisure joins the podcast to share what private equity can teach us about creating a path to technology value. With his private equity experience, Mason discusses his approach to evaluating technology in the M&A process and what other businesses can learn about removing complexity to increase the speed of change. Learn why Mason says “the agile will survive” on The Next Big Question.


Drew Lazzara (00:13):

Welcome to The Next Big Question, a weekly podcast with senior business leaders, sharing their vision for tomorrow, brought to you by Evanta, a Gartner company.

Liz Ramey (00:23):

Each episode features a conversation with C-suite executives about the future of their roles, organizations, and industries.

Drew Lazzara (00:32):

My name is Drew Lazzara.

Liz Ramey (00:33):

And I'm Liz Ramey. We're your co-hosts. So, Drew, what's The Next Big Question?

Drew Lazzara (00:40):

This week we’re asking, what can private equity merger and acquisition activity teach leaders about technology value? Now, for a big question, it’s pretty specific. But it’s an important perspective to consider in the context of perhaps the biggest business question of all: how do we deal with change? Every aspect of every business wrestles with that question, and for technology leaders, change is about creating value. For private equity firms, realizing value is a timed exercise, and they’re on the clock from the moment they invest.

That’s where our guest Guy Mason comes in. Guy serves as the chief information officer for Bourne Leisure and the founding director of Digital Decision, where he works with private equity firms to align business strategy with technology. In his career, Guy has helped organizations evaluate tech capabilities, build strategies for growth and transformation and realize value quickly. M&A in the private equity space doesn’t apply to all organizations, but Guy’s experience shows there are lessons about rapid change that enterprise organizations can learn. In this episode, Guy discusses varied perspectives on value, now and in the future, what it takes to reduce friction and increase speed as you transform, and the intangibles that impact the change readiness of most businesses.

Before we sit down with Guy, we’d like to take a moment to thank you for listening. To make sure you don’t miss out on the next, Next Big Question, please subscribe to the show on Apple podcasts, Spotify, or wherever you listen. Rank and review us, so we can continue to grow and improve. Thanks very much and enjoy.

Drew Lazzara (02:24):

Guy Mason, welcome to The Next Big Question. Thank you so much for being on the show. 

Guy Mason (02:28):

Thank you for having me. 

Liz Ramey (02:30): 

Guy, we're going to get into some pretty specific topic areas with you. Before we begin, I'm just curious to know a little bit about your background. So, how did you get into IT leadership? 

Guy Mason (02:42): 

I think the honest answer to that is I fell into it. Interestingly, I occasionally go back to schools and talk about planning careers. And I feel a real fraud because I've never planned mine in my life. I started off as a mechanical engineer and graduated from Cambridge University and thought I wanted to do something that would make me a lot of money, I think as people at that age kind of tend to do. And so, I went into financial services for a while and discovered that I really didn't like it. It was an atmosphere that was quite hard and non-people centric. So, I took a job actually working for Exxon, the oil company, doing engineering, and quickly fell into IT and did an early SAP project to help manage planned maintenances and turn arounds. And I just went from IT role to IT role. 

I discovered that there was some Price Waterhouse Coopers consultants working alongside me that knew more than I did. So, I joined PWC, and then I eventually made my way through to being a global CIO of a couple of big companies. So, one of them was some TNT Express, the air carrier. Another was the Deutsche Bank Freight Rail, the German state company that runs freight rail across Germany and actually many other parts of the world. And that gave me a real enthusiasm for how tech can change the way we live and work and the way businesses perform. Following that, I went off and had a minor diversion on the provider side of a systems integrator, then founded a consultancy with some friends. And we focus largely on private equity. 

Liz Ramey (04:19): 

Fascinating. Well, we won't tell any of the students who are listening to your talks that you're a fraud, so we'll keep it to ourselves. 

Drew Lazzara (04:26): 

I find it very encouraging as someone who still sort of stumbling his way through his own career, that there's, you know, some potential light at the end of the tunnel. So, I'll take that as an inspirational story. 

Guy Mason (04:36):

Thank you. 

Drew Lazzara (04:38): 

Well, today we're here to talk a little bit about some of that private equity experience and relating it to what firms who are going through M&A activity through private equity can teach us about creating a path to technology value. And so, there's a lot of things that are related to that conversation that we're going to get into. But I wanted to start by drawing some clear distinctions to illustrate where the comparisons of value types are most useful and where they're not. So, in private equity, there's often a medium-term investment horizon. So, incentives are going to be slightly different than a company that is aiming to be around for decades. But during that lifecycle, from initial investment to the exit, what do you see as unique about private equity's definition of value versus a public equity definition? 

Guy Mason (05:25):

Yeah, I think it's an interesting one. There are people with many opinions on how these things differ, and some will say that PE is heartless and ruthless and hard. I think the real definition is one of focus. They've gone about deciding why they're buying a business, what the value is, and how that value gets unlocked. And for them, it's a question of pace and focus to get there. I think in the sort of more publicly funded businesses, whether that's listed or family owned or any of the other models, I think there is much more nuancing of what they're there to do. Are they there to make money? Are they there to delight customers? Are they there to support those people who are in their stakeholder community or even the local community? So, I think there's a much less strong focus on what gets delivered. 

I think there are some other things it’s worth thinking about as well. So, the valuation process of private equity is a point in time process. So, if they're going to exist in five years, everything's focused on maximizing the value at that snapshot, five-year point. It's much less about consistent dividend growth, revenue growth, profit growth that you would get in a normal business. So normal business will value incremental going in the right direction over snapshot valuation. And I think that's quite important. 

So, it's a question of when you peak. And for most businesses, they don't have a date they want to peak on. They just want to show growth in their metrics over time. And talking about metrics, private equity are almost all focused on the financial metrics, versus the non-financial, unless the non-financial ones directly contribute to the valuation. So, things like NPS are probably less important than they would be to a business that wants to create value over a longer period and sustain that. I think brand recognition is an interesting one. And clearly, brand recognition can drive value. We've seen that with some of the floats recently, but that's less important to a PE firm than it is to someone who's going to be a long-term owner. 

I guess an analogy would be it's like selling a house. And when you sell a house, the buyer comes around, and he sees what he sees on the day that he's looking to buy it. It's quite different to live in a house over a long period, and PE is about selling on the day and owning and running a business not in PE is about living in it over time. 

So, having said that, most things are the same. I think it's just the prioritization of the things that they focus on. So, in a normal business -- and I'll use the word normal business meaning non private equity funded, some will find that pejorative, but it's probably a good shorthand. In a normal business, we focus on tech debt and strategic relevance in technology. The PE question will be, that's great, but will it create additional value at the five-year point? The other thing, and I'm sure we'll come back to this because it is a point of difference, in agile, in its broadest sense, is something that PE does like. The agile there -- I'm not talking about the development of engineering technology -- but the ability to demonstrate early spend can deliver only value, maximizes valuation in later years. So that's important, too. 

Liz Ramey (08:49):

I think that's such a great definition and gives us a really broad understanding of kind of value and how a private equity technology, the technology group within that private equity firm, would see value. And I also -- it just makes me think of what happened last year with technology and how there was just this mass with Covid and everything. There was just this this kind of mass transition to an agile environment. And there was a real focus, CIOs would tell us, on everything that we do has to point to value, right? Everything -- they had to have a business outcome that they could point to in the near future or else they weren't going to work on a specific project. So, I guess my question, Guy, is do you think that kind of the current operating state for that quote unquote normal business that we're looking at now is actually operating in a very similar position as, say, a private equity would be operating? 

Guy Mason (09:52):

I think the two are converging. And it's going to be an interesting -- it's going to be an interesting thing to watch over the coming years because the reason PE makes money is because they can drive value accretion faster than normal businesses can. I think what we've seen during Covid is that the natural risk aversion outside of PE and the willingness to look much longer term rather than near-term delivery, I think that's gone. The ability to take risk. Many companies wouldn't have survived the Covid process if they weren't up for taking risks. And actually, that's particularly true in technology. If you look at some of our clients who've never before had a contact center for customer calling outside of their own offices, over the period of a weekend, shifted them out to work from home. Those are projects that would have taken more than a year in a normal time. And I think the scales have fallen away from the eyes of normal business that actually they can do stuff fast. And I think it's going to be interesting when the measures of bringing back governance and going back to the old world come. And we see that actually a lot of it was good. Governance is good, and it reduces risk. And there's other things that actually it does hold back progress. So, I think there is a shakeout to come in how we do stuff. And, you know, back to my point on agility, I think the agile will survive, those who can adapt to the new things will make the money and they will probably work more like PE than their old model. 

Drew Lazzara (11:33):

Well, Guy, I think that's a perfect transition to the next thing that I was going to ask you about. Because as you're describing this convergence, I think that traditional organizations are going to have to draw from some of the playbook of PE. In your experience, you've developed a very systematic approach to specifically technology in the M&A process. And you shared that that begins pre acquisition during that kind of evaluation stage. So, what does your technology risk and capability assessment consist of during that evaluation stage? And how would you approach that kind of assessment differently if your organization were seeking other kinds of capital or simply building a strategy for major tech transformation? 

Guy Mason (12:12):

We tend to talk about that pre acquisition due diligence or diagnostic as a bit of magic. I think the reality is that there's one big difference we haven't talked about is that in PE, most of the pre-acquisition focus isn't about, how do I invest in this business to deliver value. It's, which business do I invest in? So, they're working on the funnel. They may have 100 companies that their initial research has looked at that go down to 20 that they might hold a conversation with, and five that they do a bit more on and the couple that they do real due diligence on. So, for them, it's a much bigger question about stakeholders, market fit, do we understand what the broader outcomes are going to be and how this technology contributes those broader outcomes. 

For normal businesses, it's I have a business. I want it to grow, and I've got some other targets for it. They may be, you know, they may be geographic, they may be scale, it may be financial metrics. And in some cases, we might talk about this a little bit later on. But it may be about being important and doing good on the nonfinancial model, which we're increasingly seeing, but the diagnostic phase, therefore, is much about the stakeholder analysis, identification of those things that are important internally and externally, and what the change drivers are. It's very much top down. And we technologists have a tendency to look across our functional groupings. What work we need to do on infrastructure, is infrastructure okay in our due diligence. What about storage and compute? Which applications are linear? And that's the typical things that if you were in a normal business, you'd start looking at in the due diligence process. Do they have appropriate security and that's of course increasingly growing one. But the things around, do we understand the business drivers of value? And it might be, if you're a retailer, customer engagement to employee engagement, which is growing one, or personalization. It might be, however, stock levels, if I'm a manufacturer and how do I reduce batch sizes or get to… in your product. 

So, I think the approach for PE in the diagnostic phase is to look at those things that are fundamental to the business and can't be modified in the short term. A lot of it can be, not dismissed, but can be put to one side, and say no matter what state it’s in, it's fixable quickly. I would say that security is probably in the first rather than the last. And I mean, if you talk to any insurance company now that underwrites cyber risk, it's almost impossible to get cyber insurance. So those things are pretty important to them. 

But it's much more about big picture stuff that we can't fix in the time that we've got until we exit or has such a debilitating effect on the ability to grow the business outcomes and grow the value that it becomes a dragging anchor. And the rest of it – it's a bit of an assumption of what needs fixing, and it may generate a to-do list that then in the strategy development into the roadmap mobilization phase we work on. But it's more about blockers than it is about the nuances of what they have. 

Drew Lazzara  (15:32):

I want to ask just a quick follow up question because you talked about this difference in focus being kind of one of the primary distinctions. And the change in focus is connected to the change in desired outcomes from a normal versus a private equity. Do you think that if a quote unquote normal organization were to shift their focus towards some of the things that private equity focuses on, that it would preclude long-term growth? Are they mutually exclusive focus points? 

Guy Mason (15:59):

Interesting. I would say conceptually they shouldn't be mutually exclusive. I think one of the problems of human beings in managing complex things like businesses is it's very difficult to have a balanced purview across everything at the same time. And people are relatively binary animals. What are you driving me to do? How is my bonus calculated? And that's what I'm going to get on with. And typically, people would see maximize value at a specific point as different to longer term value accretion. 

One thing that I think is changing that is that the… certainly private equity itself, I suspect trade buyers, too, and probably IPO though I look at some recent IPOs and wonder -- they probably are getting more sophisticated about how they measure the value of the business. We all know the stories where businesses are being sold, and they've done it by maximizing the value at the cost of future growth, by doing all sorts of clever tricks to show great margins and things like that. There are some ongoing court cases of high profile of this board heard about. But I think PE particularly is getting much more sophisticated about what the measures of value actually are, and it's far more than just revenue and EBIT and historic growth. I think they're looking at all sorts of other things. And as we see governments starting to look at new regimes for taxation and encouragement that take into account things that are not directly financially related but are more about contribution to society, environmental work, I think we will see a broader set of measures around value. So, I don't think they are exclusive. I think at the moment we don't necessarily have the models and tools to help us do that. 

Drew Lazzara (18:01):

That makes a lot of sense. 

Liz Ramey (18:03):

Guy, you know, there's the holding period itself when strategy is built and organizations are executing against it -- is probably the step in the process that most closely aligns to traditional IT transactions. But again, there is an imperative to move even more quickly. What is the most effective way you believe that's going to eliminate these complexities that you're just referencing to achieve the necessary speed to value in a traditional organization? So, what mistakes do you see most often made that could actually impact the velocity? 

Guy Mason (18:42):

This may sound an odd comment. I would say nostalgia is one of the biggest drags on doing that. And that's particularly the case where the PE ownership is with a management buyout. And you have essentially the same team. And this is a comment not just on overall the business strategy and approach, but on the technology as well. And technologists particularly love the things that technologists have done in the past in this part of their history. A small personal anecdote, someone I used to work with 20 years ago rang me and said he's maintaining a bit of code. And he saw that there were comments in the code that I modified it 20 years ago. This is in the oil industry where things don’t change very fast. And, you know, that made me feel really good. In practice, I should look at that and say, that's horrible. We've clearly not moved that business forward on in 20 years. And I think the willing, the wish to hang on to the way things have been done and always done, I think is much stronger in quote unquote normal businesses than it is in PE, and I think that will be something that will change fairly quickly over time. 

I think particularly where there’s no churn, companies are overweighted to what they've done in the way they've always done it and unwilling to change. I think the other thing is -- we talked about this a few minutes ago -- about the willingness to take risks. I mean take risks, not gambles. But I think that willingness in PE is much stronger in other businesses. And even though we talk about a typical PE period of ownership of five years. In practice, if you're going to do any big transformational tech change, you've got to get it done in the first two years. Otherwise and then lose the costs that it will help you take out and you won't have the capital costs change, in order to make the next two to three years really good from a financial performance perspective. 

So, we talk about five years being like five years in a normal business. In practice, the pace I think will always be higher in PE. Go agile. I talked about that as something that we should see on how the convergence of the holding period in PE to a normal business would go. I think PE is much more willing to break dependencies on things and try it. But the bottom line is, it's about focus on outcome. Tech debt is only bad if you don't recognize it and you don't know how to deal with it. I think PE is much happier to say, well, this will deliver the outcome. Okay, it's probably not ideal from a tech point of view. We'll have to fix it later. But they're much more willing to do that than the rather traditional CIO approach where purity of technology and conformance with standards and the methodological approach that that's been drummed into most of us technologists for some time, where they're really, really important. So, they are frankly great for risk reduction, but not brilliant pace. 

Liz Ramey (21:55):

So, I don't, you know, want to reduce the strategic importance that I think is happening in what you're talking about with PE, but I do have to ask the question because I think that a lot of people ask it. You alluded to it a little bit at the beginning, but do you think that that the private equity can take on some more risk because there's just more money involved? Or do you think that that's not really a factor? 

Guy Mason (22:25):

I think they can take on more risk. And if you look at the way they manage their funds, they budget for actually a significant failure proportion because they know they'll win on those that win big. So, I think they can take on more risk. And I think -- despite the fact that all PE firms have a different character, a different style. Actually, the method and process and the analysis that there is, in my experience, and I have to say it's limited to a few firms. They are far too many for me to have dealt with them all. There are over 400 based in London alone. So, you don't see all of them. But I think they are both willing and capable of taking on more risk. And they have to maintain the differentiation between what their ownership is like and what the ownership on the normal process is. I think one thing is interesting. And I think this is about focus again, but PE is really good at recognizing when a point of differentiation is actually just a point of difference. And saying, we can't differentiate on that, it won't drive better value. So, let's just go to something standard, kind of off the shelf. So, I think that discipline will transfer over to normal businesses as well, who tend to set policies which say we buy not build, those kind of things. I'm not sure that that kind of very standardized, bland policy statement, rather than looking at it in an agile way, how it works for my business, I think that will eventually become a thing of the past. 

Drew Lazzara (24:04):

Guy, there's a couple of things that I wanted to touch on that you've mentioned in several different answers today. You talked about removing the complexity to increase the speed. And I think a lot of the things that we've discussed are sort of practical complexity. But you've also talked about things like the desire to do good and the value that comes from a mission. You've talked about things like nostalgia, being an impediment to some of the speed. And all of these things are, as you've said, difficult to quantify. They're difficult to put a number to in terms of value. But where I see them as having a lot of impact is either on the consumer who is making these value judgments on what they purchase or who they work with, and also on the employee who has to be the executer of this change and who is also coming to their work with a sense of feeling and emotion as well. So, when you think about the speed that PE is bringing to an organization to drive this quick value, what do you see as the greatest impact on the employee and on the customer? And how do you feel like leadership needs to pivot to be more accountable to those kinds of feelings and some of the softer things you've talked about? 

Guy Mason (25:10):

Yeah, it's interesting. And I think actually PE is probably a little bit behind the curve here compared to some of the more forward thinking of the models of businesses. I'm working with a particular PE firm at the moment, which I think is recognizing and delivering this. So things like diversity and inclusion, environmental values. They are starting to look at those as key metrics for their businesses. And no doubt a business acquired today and sold in five years time, the regulatory environment in which they're selling it, the way the public looks at it, and particularly if it's an IPO, in those areas, I'm sure will be much stronger than it is today. 

So, I think PE is probably getting there, but typically for PE, it's getting there, I think, because there's a good financial basis for doing so. I think your other comments… I have a particular interest in some of the things companies are doing, and particularly companies like retailers, where they've gone through a wave of change that says personalization of the customer is critical. We need to address the customer of one. We can't just have a number of percenters that we drive our model of marketing through. We have to focus on the customer of one. And I think that kind of thinking is going to transfer to the employee. 

And so, you know, the sector, which is employee engagement, employee experience, and how businesses make that a one-to-one relationship to the employee through development, training, communications, those kind of things. I think that is all going to change strongly. And at the moment, I see bigger retailers and more advanced kind of hospitality businesses starting to do that. I think the reason for that is that employees are the ambassadors of the brand to the customer. And at the moment, brand loyalty is waning. You may always have shopped at the Acme clothing store. The Acme clothing store cannot now rely on you continuing to shop for them. And decisions are made and markets are fickle. And people look at trusted data and democratize data now as to what we do things. And I think that's changing, changing landscape. I think PE is recognizing that. But what I would also say is that I think over time the valuation of business will improve to have much more than just than EBIT of revenue as a measure. And companies that are recognizing that and preparing now I think will win it. It's not just a simple comment about people need to think about the environment. I mean, that's clearly true. And to a certain extent, it's almost old news. But I think that's going to be a much more sophisticated way of looking at this. 

Drew Lazzara (28:09):

And I would imagine that that increase in sophistication is going to be where you get some speed on some of these things. Because what I was going to ask you is, are these things that are worth slowing down for? I know PE can't necessarily think that way, but maybe traditional organizations need to take a little more time to develop some of these softer skills. Do you see it that way? Is that something that you think about in terms of the velocity? 

Guy Mason Lazzara (28:30):

I do. And I think if you look at where companies are starting to prioritize their capital spend, it is shifting into those directions. And, you know, there are two or three companies that I have involvement in that are preparing to spend much more than you would normally expect. People tend initially to dismiss it as just another human capital management kind of approach. But it is it is much more than that. And I think when talking about slowdown, I think it might be slow down now to speed up later. 

One of the interesting things about this is -- what is it in a business that they need to improve in order to capitalize on those kind of things? And the one thing I pick on is data and analytics and how they use that to understand where they sit and how they report. You only have to look across company report and accounts and look at things like the description of where they are on diversity, inclusion, where they are on the environmental things to see – actually, the numbers don't make a lot of sense, and everyone's doing it differently. And it's really hard for an investor to work out what that actually means. And in many cases, I suspect companies are putting those into the accounts because they're required to do it rather than they fully understand what they're doing. 

I think there's a whole set of opportunities coming for consultancies, but also for technology businesses to help start to drive a real understanding of that now. Perhaps in the way that financial systems were 30 years ago and environmental systems and people systems, I think, are going to be in those places in due course. So, it's both a challenge and a big challenge for PE because it's an investment at the moment that wouldn't -- it's hard to tie to an immediate business outcome with an immediate payback. I think some companies -- and there's a family owned company that I'm doing some work with, and they are taking a much longer horizon, a strategic horizon, for what they're doing and prepared to invest in that. And I think that's the ebb and flow -- PE has had all its own way for a while. I think over the coming years, they're going to have to change just as much as everyone else is. 

Drew Lazzara (30:40):

Well, you know, it's interesting. All of these changes are sort of driven by people as well. And I think people are always going to be either a limiting factor or an accelerant. And so, I will be watching this development pretty, pretty interestedly, as an employee myself. I want to talk quickly about this idea of big change versus small change. 

Guy Mason (31:00):


Drew Lazzara (31:01):

We have an opportunity to talk with CIOs, and they take widely different approaches to transformation. Some believe you have to do it all at once. You have to take the biggest swing. You have to take the biggest bite that you can and get it done in a significant way, while others take more of a kind of incremental and show and prove approach to this idea of transformation. What has your work in M&A and working with private equity taught you about assessing the change readiness of an organization? How should organizations look at their capability to change and use that as a barometer for what style of transformation they should take? 

Guy Mason (31:36):

This is a difficult question because as you rightly describe it, there are a number of angles to how it works. In our work pre acquisition, so the diagnostic due diligence, we do a change readiness assessment. It's at that stage it's relatively crude, but it's important to understand what an organization needs to do in order to change quickly. And so that change readiness assessment is done, but it's done with quite a focus on people because actually technology change can be done quickly. What makes it hard is the people willingness to do it or the change in people that needs to go alongside it tends to be slower. 

And so, when it comes to post acquisition, what's the shape of the management team? What kind of additional skills does it need, and what kind of programs are needed to get the employees to think at the pace that PE needs to think. They need to know early if they have to make those kinds of changes. So that's what the focus of the pre-acquisition due diligence is. 

But immediately post due diligence, there's always a period of time internally. We call it Fire-fighting, but it's about what are the burning platforms we have to fix and fix quickly in order to make sure the risks are mitigated. And some of them might be well, typically, many of them are security risks or IT security, but we also tend to assign more sophisticated change readiness assessments. And I wouldn't say that the answer is either incremental or big transformational. It depends quite a lot on which sector, which company, what their history is, what they need to do. But what I said earlier is that we need to make sure that change is done in the first couple of years in order for the value of that to flow through to the valuation in five years’ time. 

The other thing, and this is particularly true for MBO under for PE, financial buyouts under PE because essentially it's the existing management team carrying over. They are always desperate to demonstrate they can perform. So, they quite like regular drops of improvement, even if they're relatively small, because that's a great reporting view. You can show a graph with the line continuing to go up. It may be that if you go through big transformational change, the line doesn't go up initially, but then you have a steep rise. 

I think the other thing is that a big transformational change is more complex, probably inherently more risky, may deliver bigger value in the end. And therefore, there is ...there's an analysis to do, and the PE firms have value creation teams that spend a lot of time and effort forecasting spend and forecasting improvements and looking at alternative ways of doing it. And frankly, the work that we do in the strategy development of the roadmap mobilization phases are very much about navigating through that that kind of thing. You know, back to what I said earlier, they only want to invest in those things that are a point of differentiation rather than a pointless difference. So big transformational spend in the business, which has been under the same ownership for some time and will be for some time in the future, is probably seeing a bigger scope of things they want to change at any one time. 

But, you know, if it's a PE-owned firm and they want to change radically how they address customers on an individualized basis, they'll tend to look at that, rather than all the broader things that go with it. So, if I was to say statistically, I think more than half of the PE firms work that we've done wants to go incremental, but by incremental, I mean agile. Try it. Don't take too long. Back it out if it doesn't work, rather than start a program that may not deliver in two years’ time because it's almost too late to change the settings on the tiller and the throttle in two years’ time, because you've burnt the period in which you should have made the improvements. 

Liz Ramey (35:43):

That's fascinating to me, and I think it's so interesting to hear about kind of the what you do to prepare and understand whether an organization is ready for that change. And I just think of, two years ago talking with CIOs, there seemed to be a lot of weight on, OK, we're going to do this big digital transformation where we’re looking at our infrastructure, we're looking at business applications. There's lots of things we want to move to the cloud and so on and so forth. But we also need to make sure that we have some change management philosophy aligned to that or some sort of practices. But in the last year, change management kind of -- it was leapfrogged, like they just they needed to move quickly. They needed to be agile. And so I just wonder if those change management practices are aligned when you're looking at change within private equity and the acquisitions that they're making, or is agile the replacement for this kind of more change management methodology? 

Guy Mason (36:48):

Yeah, that's interesting observation. I think the way you put it is spot on. I don't think agile and the managed change are mutually exclusive. I tend to think about the managed change being focused on the people. And I mentioned earlier that in many cases they're the slowest ship in the convoy to change. But I think the other things can go much faster. But what I find fascinating about the focus on change management is, is the way you described it, which is absolutely true, that most quote unquote, normal businesses start by looking at something, as you just described, around migration to cloud. And they tend to be things that you describe within a technology envelope. What's the application strategy? What are we doing on…. the focus on PE on change in mind is PE for change management is all about end in mind. What is the top down business outcome we're trying to achieve here? And therefore, what are all components that contribute to that being successful? So, the value creation team ends up, in effect, being the change management team, as well. 

And I think if I put my technology hat on, often that's quite uncomfortable because you're trying to catch balls that are thrown at you because they're thrown because they're getting a particular outcome rather than me saying actually it would be really elegant and coherent to get to an architecture that looks like this or to get to everything be in the cloud or security in this manner. It doesn't really work that way. And I think it's a question of technology capturing individual contribution needs and trying to assemble them into a process that makes sense from a technology perspective. Whilst the rest of the change in the organization, the business processes, the way people work, the proposition for the market are being driven by the kind of things I talked about earlier. So, reduction of supply chain volumes, improvement of product tailoring, that kind of stuff. So, I think change management and agile are not mutually exclusive. It's all about when I say agile, maybe what I should be saying is reducing the size of each interdependent component that we deliver. So not aggregating things that we need to change into big projects or programs because that creates dependencies that then become risks, but breaking it down into things we know we can deliver in a semi-independent way. So maybe my use of agile is a lazy shorthand for diminishing the component size of change, but doing it a lot faster. 

Liz Ramey (39:36):

That's great. I promise that that we did not set this up to make you call yourself a fraud or lazy in any sort of way. 

Guy Mason (39:46):

So, I'm beginning to look back on what I said and regretting it a little but…. 

Drew Lazzara (39:50):

I think you actually make a good point. I think a lot of people use that term a little bit loosely. And so, I think it's helpful to draw this kind of distinction now. And it's also helpful to use agile in sort of a colloquial way too. I don't think there's anything necessarily wrong with that. But I think your definition was spot on. 

Liz Ramey (40:07):

Yeah, Guy, it's been so great to talk with you. I have one more question. I'm going to kind of place you in this executive role and not necessarily pigeonhole you into being a technology leader or supporting private equity. Just as an executive, we want to pose a question to our next guest -- something that they should be thinking about based on what you maybe find important or as top of mind right now. So, if you had kind of this next big question for business leaders, what would that question be? 

Guy Mason (40:45):

It's an interesting one, and actually, the question I would ask, I think is linked to some of the things we've talked about, which is -- it feels to me that we are in the transition from one era to another. And in 50 years’ time, we may look back on the on this period as being one that marked a sea change in the way businesses do things. So, I think the question I would ask is -- what is going to be the new definition of value of a business? And so, working in PE for me in the last five years has all been about the business value, and that's been defined by some fairly simple financial metrics, so that things like a snowflake IPO probably challenges some of this those things that I had in mind. What is the new definition of value? Not for the short term holding, but for overall contribution. And my view is employee experience, environmental contributions, social contribution will start to become more and more important, not just because they're important, but because the way governments are now starting to work on how they tax, how they regulate and how they support businesses will be being driven by other metrics like those that I've just described. And I think we can win as a business by preempting those and guessing what they might be and starting to put things in place. So, the question really is what is the new definition of value that we now need to create for businesses beyond the mere financial? And how would we measure and manage that? 

Drew Lazzara (42:32):

Well, Guy, I wish we had posed that to you at the beginning of the conversation because I have so many follow up questions, and I'm sure it'll be a rich dialogue for our next guest. So, thank you for that really compelling question. Thank you for a wonderful conversation today. We really appreciate your time. Thanks for being on the show. 

Guy Mason (42:46):

I thoroughly enjoyed it. Thank you very much for giving me the opportunity. 

Liz Ramey (42:48):

Thanks, Guy. Thank you, again, for listening to The Next Big Question. If you enjoyed this episode, please subscribe to the show on Apple podcasts, Spotify, Stitcher, or wherever you listen. Rate and review the show, so that we can continue to grow and improve. You can also visit to explore more content and learn about how your peers are tackling questions and challenges every day. Connect, learn, and grow with Evanta, a Gartner Company.