Eton Bridge Partners recently had the pleasure of hosting an evening for 50 Chairs, CEOs, Transformation Directors and Private Equity Partners. This year, we discussed the re-rating potential of tech enablement and digital transformation, something increasingly debated by both Listed and Private Equity clients. It also has a strong basis in people, leadership and talent (and that’s where Eton Bridge Partners comes in).

Whilst building the Board Practice at Eton Bridge Partners and working closely with Nick Berman, Steve Deverill and our Business Transformation and Technology team, we spend a lot of time placing tech friendly Chairs, CEOs and CFOs as well as full operational and digital transformation teams into businesses with a significant growth mandate. Through this work, it’s become increasingly obvious that the distinction between tech and non-tech businesses is no longer a clinical line as perhaps it once was. Our contention was that every business could (or should) be a tech enabled platform – just with different operating models attached.

If this is true:

• How can we create a replicable recipe for transformation?
• How can we codify the value and re-rating potential of a digital transformation of a legacy business?
• What implications does that have for prospective targets from a Private Equity perspective?
• How can Listed CEO’s deliver greater shareholder value through higher growth, margins and revenues?

Luckily, David Bellin and Steve Homan were on hand to share their experiences and thoughts (both of whom have far more experience than I). With two MBOs under his belt and a successful career in Media, David recently stepped down as non-executive chair of SQS Software Quality Systems AG, having transformed the business with profits up 10 fold, more than doubling their revenues and tripling share price. Enabled by technology themselves, David and Dik Vos (CEO) have figured out how to industrialise software testing, and the business was set up to capture innovation. David also just sold the business for a 56% premium… so transformation does work!

Steve has a stellar career in digital and technology transformation. He is currently CIO of Metapak Software, and was previously Digital Transformation Director of Collinson Group, Fitness First, Daily Mail General Trust (DMGT) and Managing Consultant of PA Consulting. Steve has been responsible for building the digital accelerator – pushing legacy, technologically failing businesses and business units to the forefront of commercial success. He does this partly through data and a clinical assessment of the market, partly through the application of digital innovation, but in the main, driven by the ability to align, motivate and communicate with his teams, senior leadership and wider invested parties.

So, where to start?

I was always told to start by questioning the question, and it’s worth noting that even the experts find there is no clear definition of ‘digital transformation’. It’s a very exciting sounding term for a logical adoption of strategy, efficient and customer focused use of technology and wider operational systems consistently over time.

So often, the biggest barrier is the passive ‘fear’ of the top team – that hurdle where the Board are aware of the need to change, but they don’t necessarily know how, nor what that would mean for the business. Tech companies have led the way because of their speed of change, ability to make mistakes and iterative process that a larger business cannot necessarily afford to undertake.  The good news is that there are first class people out there to support – even on an advisory basis – to make it simple and understandable, unlike the highly technical image the term ‘digital transformation’ elicits. Just getting on the journey will yield significant results and so often, it’s not about being the best and maximizing value – just being average is OK and better than most.

With too much to write down in this article, I have summarised below some of the salient points of discussion, which I hope will be a useful framework for future discussions:

Strategy is the foundation

• Do not have a digital strategy – have a strategy – the extent to which it is ‘digital’ or not does not matter. Technology is not the end in its own right – it is an enabler and must be seen as such.
• Really understand what business you are in and what you are trying to achieve. And ask yourself: What is your competitive advantage? What are the enablers? Who are your customers? What outcomes do you want? How do you measure successes? What and where are your risks?
• Make sure your comparables are real! Google and Amazon are not your comparable companies. To all intents and purposes, they have an unlimited budget, unlimited talent and a global platform. The likelihood is that you don’t, so make sure your aims are realistic and actions are designed to achieve the desired outcomes.
• Accurately forecasting the day to day impact of a transformation strategy is difficult with any degree of certainty. Accepting a period to learn by deciding on running order and relentlessly focusing on the outcomes is important. It will take time and initiatives often fail when it’s a sprint, then minimised or stopped without a carefully monitored adjustment period.

Then comes culture – it’s a mindset that puts people at the heart of everything

Somewhat paradoxically for a technology transformation, it’s people that are the key – ultimately, they are the ones benefitting from and implementing it.

Key considerations include:

• Educate your top team.
• Make sure you are committed to the changes – if it’s your future, it’s your future and dividing old and new parts of the business is a dangerous path.
• Over communicate with all stakeholders – if you go to bed thinking you have said it too much, that’s probably about right!
• Reward (soft and hard) progress against the strategy.
• Communication has to be for the long term and not just for the immediate project – digital transformation becomes a way of life and not a discrete project. ‘Ceremonies’ must be adapted to reflect that.

Set your structure

• Decide on your team – mindset, motivations, ego.  Talent (mindset and horsepower) are everything.  Technical skills are easy to learn (relatively speaking).
• If you ‘rent’ the skills to move you in to a new way of working, will you learn and accelerate in the future? A dedicated, strong internal team is vital.
• Expect (and work hard) to pick out passive resistance. Remove silos and hierarchy and find a way for the team to win together – colocation is powerful and preferred.
• Go slow to go fast later – do not lose who you are just to set a fast pace.

Establish a laser focused operating system

• Measure everything. Feedback loops are essential. Be obsessive about the data, especially as a top team.
• Data has to be available, understandable and usable.
• Find the constrains and unblock them.
• Leadership must be present, vocal and humble.

Finally – implement appropriate technology

• It’s not about the world’s most complex or beautiful tech as an answer. Tech leadership is key and the technology itself must be functional, fit for purpose and designed to meet your strategy.
• ‘Borrow with pride’.  In the vast majority of situations, solutions already exist. Do not re-invent the wheel but look to others and implement in a new way or a way that works for your business/sector and customer base.
• Agile is not the answer – it’s just a method.

Having built my career over the last 15 years in Investment Banking, Private Equity and building my own businesses, the one thing that is clear is that, for all of the ideas, business plans, spreadsheets and technology, most of what makes us successful is people. In property, the saying is location, location, location. In business it’s people, people, people and this was echoed by both David and Steve during the evening with the over-riding message that planning, people and communication are more important than the tech… quite an admission for a Digital Transformation evening.

When specifically asked about how to codify the value and re-rating of a digital transformation, both David and Steve accepted that it would be difficult to achieve with the precision required by a DCF model or standard valuation technique, but that it was possible given the time to study specific types of transformation in specific business profiles and with a talented, known and trusted team.

Perhaps unsurprisingly, an exact answer to the evening’s question posed of both speakers was not derived but we do know it works – both in terms of allowing a business to increase revenues, growth rates and cut costs but also to become the disruptors, not the disrupted. David Bellin and Dik Vos’s approach to digital and tech enabled transformation at SQS is just one example of this and we will be following up on this topic with future events and discussions.

Many thanks to all of our guests and especially our speakers, Steve Homan and David Bellin, for making the evening and if the Board, Business Transformation, Technology, HR or CFO practices at Eton Bridge Partners can support your business with the transition to a sustainable new model of tech enablement, we would be delighted to do so and please don’t hesitate to call Ed Fanshawe or Nick Berman for a confidential discussion on 01753 303 600 or by email:

Nick Berman
Partner – Interim Management – Business Transformation & Technology
T: 01753 303 600
M: 07547 509 773
E: Nick.Berman@etonbridgepartners.com