Shift & Thrive: CEO Insights on Driving Change

Hi, Mark.

How are you doing?

I'm good. How are you?

I'm good, thank you.

Good. Nice sunny but humid day today in Boston, huh?

Uh, I am in New York this morning, but…

Okay.

Probably very similar. Are you in… are you in Boston?

Yeah, yeah, well, I need them, but yes.

Oh, Nito, yeah, I live in Brookline, so yeah.

Oh, okay. What part of Brooklyn?

Um, sort of between the village, Washington Square, and Coolidge Corner, and I can walk to all of them in about 10 minutes.

Oh, right on.

Okay, okay, nice. Yeah, I used to live in Coolidge Corner, and then my mom just moved to Chestnut Hill after a long time in Lexington. So it's a great area.

Yeah, sure, sure. We've been there about almost 5 years.

Okay, very nice.

Yeah. Okay.

Wonderful. Well, I'm looking forward to the conversation today. I was going back through the notes and I think we'll have a lot of interesting areas to talk about.

Yeah, before we kick it off, is there anything in particular you want to sort of share with me? Any areas you would like to focus on?

Anything in any stories to tell or not to tell.

Yep.

Yeah, so nothing not to tell. I would say, so just as a reminder, because I know it has been a little while since we spoke, I'll start with a brief introduction of your background and then I'll go into the opening question, which we had talked about that being around transformation that you led and you were going to talk about Fabrinnet

Yeah, yeah.

Sure, sure. Yep.

And the growth, but then, like, the kind of stuff about kind of communication and alignment and all of that

So there were a couple stories that you mentioned you would have that I'll like queue you up for in the discussion. I'm happy to kind of run through the rest of the flow if that's helpful, or I can just kind of throw the questions as they come. What's more helpful to you

Yeah, whatever works for you, I'm good either way.

Okay.

How long do you think we will record for?

Usually about 40 to 50 minutes, depending on the conversation.

Okay. Perfect.

Okay, and then I think I mentioned this to you, but I do usually take the conversations like pretty organically without a lot of post-production editing. But we certainly have the option to. So if like something comes up during the conversation and we need to like rerecord a question or if afterwards you say, hey, I didn't like how I kind of said that 1 thing, we can always

And affix it and make sure you're happy with where we end up.

Okay, I appreciate that.

Okay.

All right, final sip of coffee

Anything else you want to talk through or anything else before we get started?

No, no, I think we're good. You tell me.

Okay, okay, wonderful. Let's get started then. Double check my recording

Perfect. All right.

I am really looking forward to speaking with today's guest. He is a fellow Bostonian, and earlier in his career, he pivoted from corporate law to become a serial company builder, co-founding and growing Fabrinet over 1 billion in revenue

And a public listing on the New York Stock Exchange. He brings deep expertise in M&A integration, as well as leading across diverse global teams and cultures. Today, he leads a technology-enabled platform dedicated to helping retail suppliers boost revenue

By safeguarding against improper deductions. He is the CEO of Stat Recovery, Mark Schwartz, welcome to the show.

Thank you, Natalie. Happy to be here with you.

Great to have you. And I'd like to start with a transformation story from your time at Fabrinet. And I know the company had gone through a period of extraordinary growth and that you hit a stretch where that growth had started to flatten. So I'd love to unpack what helped you lead through that and kind of persevere through that

But maybe first for the listeners, if you can briefly take us back to kind of what was happening in the business at that point.

Yeah, you know, you had mentioned that I was a corporate lawyer, and I happened to be assigned to work on a client that was founding.

this business, a gentleman named Tom Mitchell, who became

a friend and a mentor to me for many, many years.

And.

We started the business in 2000.

Um, and by 2005,

Um, we had grown from a standing start to, um, something near $300 million in annualized revenue already. Like, we had a very, very fast.

start. And, um, and then we saw, sort of, year 5.

That growth.

was waning.

And keep in mind, this was, you know, post sort of law school, being a lawyer.

And then thrown into this entrepreneurial environment.

And I was the chief financial officer, and at the time, I was still the general counsel.

In a startup, you do a bit of everything. I ran sales and marketing for a few years. I always sort of had.

IT and our people, HR,

Um, and other areas, but…

It was relatively new to me to be a particularly senior management.

And, um, and I was just sort of spending those first few years soaking up everything I could like a sponge, trying to understand it.

I joke that, you know, I had been a CFO.

For 23, 25 years.

But I never, that was my first role in business was CFO. I was never…

didn't come through the ranks as an accountant, a senior accountant, and director, etc., etc.

Starting at the top

Sure.

So as our growth is starting to wane,

My partner and CEO, Tom,

says, we need to bring an outside source in here to help us analyze what's happening.

And my initial reaction internally, although I didn't voice it, was…

What is a third party gonna tell us about our business that we don't know? Like, what kind of perspective will this person who doesn't really know anything about our business be able to give us?

And I couldn't have been more wrong, ultimately.

We brought in a coach who interviewed about 120 different people across.

uh, virtually every department in the company.

And he came back to us,

And he said, look, he used the old Jack Welch model of sort of categorizing your teams. And he said, you've got

Probably, you know,

In a good organization, 5 to 10% of your team might be what Welch categorizes as the type A players, the next generation of leadership, your current strongest leaders, et cetera.

And then you've got probably 80-plus percent.

of your Type B players, which is really the proficient engine of the business that makes it go.

The really, really great, hard-working, perceptive.

Sharp employees that make the business go.

And then there might be a small sort of percentage of type C that might be.

might be really, really, uh, good at what they do, but they're not in that role. They're in the wrong role.

or they're just not a fit for one reason or another.

And they tend to cycle themselves out even before

You have to have that discussion about a transition.

Um, and so with that sort of bell curve, he said to us, you've probably hired 35% or 40% of your team are Type A players.

Um, so, so kudos to how you've hired, but the problem is, you're not sharing with these folks.

What it is that you're off to do as a company over the next several years. You haven't defined the mission.

or the vision of the company, things that we sort of…

take for granted as, like, Entrepreneurial 101 today.

And even then. But we had never done that. And, um, one of the lessons I took from that, Natalie, was.

You know, I knew what our strategy was. I knew what our plans were.

I thought everybody did.

And what's in your brain as a leader is not necessarily

Being vocalized so that your team understands that.

Um, and so that was a real sort of shock to my system, because it… the light bulb immediately went off as we had these discussions.

with this consultant, and he was 100%.

Correct. I was seeing it in…

In the company, in different sort of.

niches where people would want to work for one director, not another, because of how they incentivized folks, or how they promoted from within.

Um, and you can't have that in a business. You can't have lots of small companies inside your one company. It's a real danger. And that was stifling.

our growth.

The other lesson I took from that.

actually hit me 4 or 5 years later when I was taking a series of golf lessons.

And my golf coach was trying to get me to do some particular move.

And for 5 or 6 weeks, I just couldn't do it. I couldn't get it.

And she would tell me every way she could think of.

to try to show me or talk to me about how to do this particular move.

And then one day she said something to me, and I don't remember what it was, and immediately, it clicked.

And I said to her, how did you do that? She said, this is my job. I have to tell you as many different ways

what it is that I'm trying to get you to do, and I know one of them is eventually going to resonate.

And it took me back to those discussions we had.

With this consultant at Fabrinet back in, sort of, 2005 timeframe.

Because he was saying some of the same things.

Um, and it really changed my perspective on being a leader and how to message.

As a leader and as a manager of folks.

Because not everybody hears things the same way. How many times have we all?

left a meeting, and then heard folks talking about the content of that meeting later,

And thought or said, well, that's not what we were talking about, that's not what was said.

People hear things differently. And so as a leader, as a manager, it's our job.

to consider as many different possible ways to communicate that message.

So that you're being inclusive to the largest number of folks listening.

Um, and it's… and it's something that takes practice to do, and there's a muscle to continue to exercise that.

But those two sort of events, one business, one personal,

sort of overlapped each other and really solidified for me the…

The importance of, uh, of not only sharing the message, but sharing it in.

as many different ways as possible.

Yeah, yeah, I think that's so relevant. And so it's so easy for all of us to kind of forget when you're in the moment and everyone's busy and you maybe are tired of hearing yourself kind of say the same thing to yourself, to your leadership team, etc.

I'm curious, kind of going back to kind of the experience at Fabrinet, once you clearly saw that, what were the things that you changed about how you were leading the organization? Were there other areas, I guess, besides the communication style? Because I do think of

A big group of Type A's, can be a blessing and a curse, right? That you have self-motivated people

Well, sorry to interrupt you, I think you're 100% correct. The blessing is you're hiring likely very sort of self-motivated folks and problem solvers.

Without giving them…

the… the tools by which they should be operating, the boundaries by which they should be operating, the guidelines of what do we do at Fabrinet, how do we handle these situations?

then what they do is, because they're self-motivated and problem solvers, they bring their past experiences.

And they, and they likely solve those problems differently from each other.

And that's… that creates friction, that creates tension.

In the absence of a clear, unified message, that's where you have rumors and people.

Believing that this team is playing favorites, and this team is not following

The path that they should be following, etc.

So, so we, we went back to very, very basics, things that.

then in all likelihood, we should have probably done.

On day one, as we were building the business.

And that is, let's… we all know what our values are at a senior level. Let's make sure everybody in the company understands that. What's most important to us?

As we built this business.

And we did that.

creating things like a mission statement.

And sort of communicating to everybody.

What are the 4 or 5 or 6 things that are most important to us as part of the next three years of our growth?

And what are the 4 or 5 things that we want to do this year that's going to build toward?

that longer-term growth.

Most companies do these things. We never, we never did any of this, and it was a wake-up call for us that we really needed to make sure.

that these Type A players, and even the balance of our company, the brilliant engineers and others that were the engine that ran our business,

Um, they were starving.

To understand, like…

Where are we headed? What is our leadership team doing? Where are they taking us?

And so we went and we did all of that. We created.

career training and development paths that were very.

specific and tied.

to the longer-term goals of our business,

And if there was anything that interested you, you could latch onto that and you knew where that was going to be relevant in the business.

Later on.

I don't want to say forced, but we sort of mandated.

That, um, that our leaders.

They follow this quote-unquote fabrinet way that we created, and this is how we run our business. This is how we run meetings, this is how

This is how we treat our teams. This is how we promote from within.

across the board. And it took time, but over the course of.

3 quarters. We saw our growth re-emerge.

Um, we weren't doing anything different as a business. The industry hadn't changed.

We were just aligned again.

And… Yeah.

to have that kind of reminder, and three-quarters, I'm sure you wanted it to happen as fast as possible, but that is relatively fast to make these kinds of changes and kind of feel the impact on growth and revenue. And I'm glad you brought up the mission and vision, because I know to some, especially like more technical kind of CEOs and founders.

Especially in smaller companies, that work can feel kind of fluffy or like a luxury. We don't have the time to invest, but I think your story is an experience is, you know, exactly why it's so important to have that. And, you know, everyone talks about the analogy of rowing in the same direction, but it sounds like that's really what it allowed you guys to do.

I'll add a little bit to that, Natalie. So, um, in my current role at STAT, we have two

two companies that we… that we manage. I'm the CEO of STAT, and we have

Stat recovery, as you mentioned, and we have a company called the Moresby Group.

And.

In total, between the two companies, our goal is to.

is to be the profitability partner for a CFO.

We call it the margin defense system in some cases. So where are their dollars that you might be leaving on the table?

And, um, in February of this year, when I took over as the CEO.

I woke up one morning and I said to myself,

I don't think I could recite our strategic priorities for this year.

And if I can't, if the CEO doesn't know them, there's no possible way everybody else in the company understands them.

So I, uh, I pulled my executive team.

And sure enough, there were lots of blank stares, and some folks remembered one or two or three of the things that we had written on a sheet of paper.

Two months earlier.

But that's not anything that you put down on a sheet of paper and put in a drawer and tuck away for the year.

If it's really important, if it's really strategic, and you're claiming these are our priorities.

then you need to make sure that that not only is disseminated.

But further to what we talked about.

earlier, over-communicated.

And communicated at the beginning of every All Hands, and communicated at the beginning of every

Full team meeting, or departmental meeting.

Um, we've… we've gone so far as to.

Uh, to come up with ways to put our strategic priorities on mouse pads and in posters, and so forth.

Because we want.

Uh, everybody to understand.

Where we're headed, and we want their managers to be able to cascade down to them.

The importance of what they're doing and how that rolls into the priorities for the entire company.

Um, and so again.

fairly simple blocking and tackling.

But, um, but we weren't doing that here either, and I'm sure lots of companies, meaning have meaningfully.

agonized over their priorities, but then don't spend a lot of time throughout the year continuing to communicate them to the team.

And so we've been doing that much more and much more clearly.

Uh, to our team members for the last 7 or 8 months.

And.

And it's working. You know, I see the enthusiasm and the energy for people, knowing that what they're doing is contributing to the bigger picture in the company. It's really important.

Yeah.

Yeah, yeah, I want to talk a little bit more about the communication side of this because I do think that like good communication is measured by what people understand, not by what was said or what the leader said. And I think sometimes there's a fallacy of

You know, we just need to keep repeating the message and saying the same thing over and over again because people are busy and not everyone kind of pays attention the first time. But I think repeating a message is not necessarily the same as kind of communicating it differently in your golf example is a great one

For that, right, different people take information differently, they, you know, all of that. So curious to hear, like, how do you know whether people kind of are understanding the message the way you intended?

I wish I had the secret sauce there. I think there's not one right way to do it.

Everybody's style is different.

What I try to do is to disarm.

A group of folks from being defensive, whether whether they.

think maybe I don't really understand.

what's being talked about, or I don't have the full picture.

and give folks opportunities to ask questions. And I always like to say, I'll ask all the stupid questions, I'll get them out of the way up front.

And then you all can ask the good ones.

But when I'm sharing a new idea or a different direction, before we move to a different topic.

There is always the, all right, are we understanding this? Does anybody have any questions? Can you recite?

in one or two sentences, the direction that we're headed.

Can you recite in one or two sentences?

How we're going to achieve the goals that we just talked about.

And give folks an opportunity to sort of put it in their own words.

Um, and.

And I'm sure you see this in your own practice. When folks hear it from others, not just from that one same voice.

With a little bit of a spin put on it.

then that, I think, helps folks absorb that message even a little bit more quickly.

Yeah.

Yeah, yeah, for sure. And I think, you know, because people learn differently, some folks are more visually oriented, so getting a good kind of diagram to articulate it, which you talked about kind of posters or talking about analogies or kind of how did we get here, like covering more of the history versus the future looking like people latch on

to different things, and I think having a mix of all of those, really helps to reinforce that as well.

The other thing that we did at Fabrinet

Um, which was a much, much larger organization, and we're doing it today at STAT.

um, is…

is to really pull in our

next level of leaders, our directors, senior directors, in some cases vice presidents.

And, um, and giving them.

Voice and visibility.

into some of the things that our senior executive team

is debating and managing on a daily basis.

And giving that.

Extended leadership team.

The ability to, to feel like they have some, some voice even if they don't have a vote.

gives them more confidence to then go and cascade those messages down to their own teams, because they've been in the room, and they've seen

the debates, and they understand the trickier points, the complexities of what we're trying to.

to get through. And that gives them an opportunity to feel more confident cascading those messages down to their teams.

Mark, I want to take us in a slightly different direction now, and I know you've led through a number of acquisitions, and I think integration is one of those areas where CEOs can find the real challenges begin. So I want to hear a little bit from you

You know, what have you learned about M&A maybe specifically to start like bringing in an acquired team into the larger organization, especially like under the discussion of alignment we've been having

Yeah, as a corporate lawyer,

it was… these were… these were the transactions that I was exposed to, and… and helping.

my clients to acquire another business or merge into another business.

And it was very… so I understood structure.

Um, but… but I didn't understand…

The, the integration components, the people aspect of that.

At Fabrinet, um…

We we were and they still are.

independent, public, very successful contract manufacturer, mostly of photonic devices, fiber optic equipment.

Lots of the devices that are required for AI and for data centers, etc. So very, very relevant today.

At Fabrinet, we would acquire…

factories owned by our clients.

Because we were… we were the company, and they still are, that handles the most complex engineering and manufacturing sort of.

challenges that a company could have, because

While you're… while you might be an expert at creating and developing a product and marketing and selling it.

manufacturing, it might not be your core competency.

And that was… that was Fabrinate. So we would acquire factories from our clients.

Where they had made the decision, you know, February's doing such a good job for us on these other products, why don't we just give them everything that's in this factory?

So we would acquire those factories, and then we would.

transition the.

the manufacturing operations in those factories.

to our larger factories,

in Asia.

So…

really interesting type of…

Of acquisition because you're doing so.

Where just about everybody at that factory understands that over a period of

6 to 12 or more months.

Um, that factory is no longer going to be there.

Their job is no longer going to be there.

And so, in those situations.

Um, and we did this seven or eight times while I was the CFO at.

at Fabrinet, and so I sort of owned.

this exercise.

Once the acquisition was announced, and perhaps it hadn't closed yet.

I would go to the factory, and I'd hold a town hall.

For everyone in the factory. And usually the first one was the most exciting, people were outraged and upset and etc. And it was all legitimate, and you can understand all of that.

Right.

Um, but…

I would say, okay, listen, let me have your questions. Like, what can I help you with? We're going to make sure at the end of all of this.

that we're gonna support you on your career path, and we will, we will.

There'll be appropriate severance, but outside of the dollars, we're going to figure out how we can help you in training, and we're going to figure out how we can help you with.

resume writing and building out.

Uh, so, you know, whatever it is you're gonna need for the next step in your career.

And I'd get questions like, um, I already put in it for a vacation with my manager. Can I take that?

Are we getting paid the same days?

What about my health benefits? What about this? What about this? What about this? Sometimes I had the answer right away.

Other times, I would say, great question, thank you.

And when I'm back here next week, I'll have the answer for you. And then I'd come back the next week.

And I'd answer those questions, and then there'd be a slew of additional questions.

And I would do this for…

6 weeks, sometimes 8 weeks, every week, no matter where the factory was in the world, I would be there on that Monday or that Tuesday every week.

For that period of time. And in almost all cases, by that 6th, seventh, eighth week.

then people would start to come up to me and say, I really appreciate your transparency, thank you so much, we really understand the direction now and where we're headed.

It's not going to be a great outcome for us in the end, we get it, but you guys seem to care, and that means a lot to us. And so, you tell us what we need to do.

to make this work for us.

Um, so that was just…

And I did care about all of those folks and making sure they landed properly.

But just that.

being there over and over again.

And in answering those questions.

And… and showing that it really mattered to us, and it was important to us that they had a good experience as we were winding down that factory.

um, made all of those engagements.

um, successful.

Now, that's one type of acquisition. It was really important for me to.

to spend the time to do those things with those folks.

In most cases, we would have a big party at the end before we wound it down.

And everybody invited, and they bring their families and so forth.

You know, the more typical acquisition, where you're trying to merge two businesses together, combine portions of a business into another, whatever form it takes, and there's many.

Um, I learned a really valuable lesson from Tom, my partner and CEO at Fabrinet, early on.

Because we did a few of those types of acquisitions as well.

And his view was,

Uh, breaking it down to its simplest form.

The founder or CEO, the senior leader, the managing director, whatever it was, the senior most leader or leaders.

of that business immediately became part of our executive team at Fabrinet.

And that may not have lasted long term.

In some cases it did, but…

Early on, they became part of our leadership team. And so for the same reason I talked before about

Giving your extended leadership team

Voice and visibility, even if they don't have a vote.

We did the same thing for…

for the leaders of a company that we acquired.

Because then they could go and turn around and talk about what they were hearing.

At Faburnet Senior Headquarters,

To their teams.

And that was really important. It was never a situation where that team became a satellite, and it was business as usual, and in many cases, they were sort of forgotten about as part of that integration.

Um, we made sure that they had a voice, and we made sure

that they have the ability to then go back to their teams and cascade down what we were doing

And where they were fitting into that.

Um, and I think it's really important to do that. I think it's really important, early on. It doesn't have to last.

Depending upon the size of the acquired entity and the size of the target.

But for some period of time, making certain.

that the senior leadership team there.

can go back to the teams and alleviate some of the concerns that people are naturally feeling

having a new owner. And that to me is is really, really critical.

Um…

I've seen good examples and bad examples of a longer-term acquisition strategy, you know, a particularly poor one that I recall was a company that had grown largely through acquisition and had made 40 plus acquisitions.

Uh, over the course of about 5 or 6 years.

And basically had…

40 GMs and 40 heads of finance and 40 heads of sales, etc., and hadn't integrated any of them.

And eventually it came back to bite them.

And then there was some enormous restructuring that had to happen, which really impacted the morale of those teams and

created more uncertainty.

So I think to the extent.

And this doesn't have to mean, Natalie, product integration. We're just talking about

teams. To the extent

that you can eliminate that uncertainty.

In the first year, 6 to 9 months.

Um, and… and not only eliminate it through your action, but also make sure that the messaging is consistent.

with those folks, then I think you… you put that acquisition on a.

on a proper footing.

Right, right.

to potentially be successful. Many acquisitions are not successful no matter what.

But you want to take out the things that you can control.

And make sure that those components of it, you've done the very best you can.

Yeah. Well, I think oftentimes, you know, there's so much of a focus on getting the deal done that a lot of the integration components can become an afterthought and that really is to the detriment. You talked about kind of the 40 GM example

Yeah.

I think underappreciation for kind of what are the skills on the team of the company that, you know, got acquired? What are the processes they have? And sometimes, especially if it's a bigger company acquiring a smaller one, the assumption is

Well, we're bigger, you know, we've got it figured out. They'll come and kind of follow our processes and our systems and all of that. And what I see on the go-to-market side is that's not necessarily the case, right? Sometimes these

Younger, smaller companies that are getting acquired, they might have a more nimble or sophisticated tech stack. They might have, you know, customers that you don't have, that you need to look at kind of the cross-sell, kind of upsell opportunities. So to your point, even when

It's not a product integration, looking at kind of what's the best of, kind of each of these disciplines that we can be now kind of bringing into our organization in the right way.

One of the, to me, one of the most important qualities of a leader, really of a human being, but of a leader,

is humility. And if you surround yourself

At an executive level with humble people.

then you're going to ask those questions right away.

In an acquisition discovery process, what do they do better than us?

What are we missing? Where can we learn? I know we're the acquirer and maybe we're

quite a bit bigger, but what can we learn from what they've done to reach the level of success they had that we're interested in acquiring them?

And, um, and I think that's such an important part of the acquisition that you've just talked about because.

Um, in most cases.

that you're going to find that there are things that that target does better than you do.

Yeah, I couldn't agree more. And I'd love to take us into a kind of other facet of business next in the discussion. And I know you mentioned you spent a lot of your career in finance, strategy, operations.

But that also becoming CEO means kind of direct ownership of everything, and including go-to-market. And I think this is an area where I do see a lot of CEOs struggle to kind of wrap their head around it when they don't have a prior understanding. So I would love to hear from you, like, what have you learned

About, you know, how a CEO without, like, a go-to-market background can be effective in leading that function.

I'm still learning.

I think…

There's that humility we just talked about. I love it.

Yeah, well, I've always been a very operations oriented.

CFO, I love digging into the details, I love meeting with clients, I love sitting in on client meetings.

And.

And so that's always been sort of a

I may be being curious has always been sort of a part of

of what I enjoy doing as a CO, as a CFO and now as a CEO.

So client-facing activity was not new to me.

And I've seen really, really good.

And I've seen average and less successful go-to-market teams over the years.

And, um…

And, and trying to sort of take the best of what I've seen and apply it.

At, uh, at Stat and, and across STAT and Moresby.

I think it's really important, particularly if you are selling into large enterprises.

It's really important to have…

to have a sales…

process that everybody follows.

Um, there's several of them that are popular and in.

in substantial use, Medic and others.

But whichever sort of sales process you follow and you and you sort of.

believe in, um, you need to make sure your teams are trained in that, and then you need to make sure

That, um, at the senior-most level.

Um, those sellers know that that head of sales, that CEO, that CFO, are paying attention.

Um, so one of the things I did at STAT is we started quarterly business reviews for our salespeople.

And we've now done that for the last two quarters.

And it's an amazing tool, giving each of those sellers the one opportunity that they have really.

to reflect on history. Sellers are always looking ahead, forward.

Um, but once a quarter now, they have to look back.

What did I accomplish in the last quarter? How many deals did I close? What went wrong, and what could I have done?

Differently, where did I need more support internally?

And, um, and so I think it's really important, at least that one time, and hopefully more throughout.

a quarter that an enterprise salesperson

takes the time to sort of reflect on those things.

And for me, it usually comes down to what additional tools do you need? What else can we do as an executive team?

What can I do as CEO, pull me into those

meetings where you think that having your CEO present.

is going to answer some questions from the client.

or get them to a level of comfort that maybe they weren't at previously.

or create some other positive value for both of you and for the client.

So I offer that and I do that.

fairly often with clients. I love being in front of clients, so.

Like I said, for me, it wasn't entirely new.

But I think it really is having that process.

and holding folks accountable.

Under that process, um, and, and then being present, being in those sessions. A CEO who doesn't attend.

the weekly or monthly or quarterly sales meetings, and isn't…

Isn't seen around the sales department regularly.

The message is that it's… that you're focused in other areas. It's less important to you.

Yeah. Well, and then

And obviously, the go-to-market engine is driving the business, or among the drivers of the business, and it's critical, and it's important that the CEO.

is visible.

Yeah, I think that executive presence is so important. And I think for, you know, it doesn't come as naturally to some, especially kind of on the customer or sales side

But I think folks can underestimate how big of an impact they can have with the customer. I also think that question of where should a CEO get personally involved or own areas within go-to-market is one of those areas that can feel a bit

you know, mysterious to folks, and, you know, when we're talking to customers, prospects, etc, I talk about, you know, the areas a CEO should be involved is kind of as little as possible, but there are key areas where they should be, and they need to make the time, and that's, right, the company's positioning

involvement in messaging, understanding trade-offs of a plan. So both kind of, you know budget implications of if we don't do this, here's what we expect to happen. The sales and marketing alignment and any kind of shifts in what is sales being, kind of

for what is marketing being kind of incented for, making sure that that is all aligned. And I think a lot of that comes back to the strategic priorities that you were talking about earlier, and then kind of being in the right conversations and some

points, like, making the… the tough calls

I'm curious to hear, kind of, from your day-to-day, and I don't know what kind of the leadership looks like in that function, but are there areas that you've found in that kind of planning where you've had the biggest impact with the team?

Yeah, it's a great question. So we're structured where we have a, um…

ahead of all sales who own sales, marketing, partnerships, sales operations.

And under that gentleman,

is a VP of sales and partnerships.

Um, doing an amazing job.

And, um, on the Moresby side of our business,

We're in the process of hiring that that enterprise sales leader. Moresby was very fortunate.

In their past, where, um, through referrals.

Through clients leaving.

A key individual had a client leaving and moving to another company.

They never had outbound marketing and sales efforts.

So that's a new muscle that they are exerting now.

Uh, and building a pipeline that way.

And so we're hiring an enterprise sales leader for that.

business, to basically build out a lot of those processes and run that.

But when I took this role in February, one of the first things I did is sit down with our head of sales.

And consider how we were incentivizing our teams.

And what we found was there were gaps in those incentives.

We were incentivizing.

our client experience teams,

on retention, but we were not ex… forgive me, on expansion, but we weren't incentivizing them on retention, which is critical.

And some of the incentives that we were… we had created for our salespeople.

We're not having the intended

Effect, and sometimes you design a sales plan.

And you later realize from that sales plan that it drove a different behavior than you were attempting.

to create. So we re-examine them, and, um…

and others call it in the food chain of the sales cycle.

And, um, and change some of those incentives. And it's been viewed very, very positively.

By focusing in our company.

Um, but sometimes you have to have a new perspective, and it just takes time.

To do that, and you can't ever laminate it. You have to make sure that if something's not working.

You're open and willing to going back.

and making a revision that will sort of generate the right activity and behavior you're looking to create.

Yeah.

I could keep talking about go-to-market for the rest of our conversation, but I do have other areas I'd love to dive in with you. And I guess at this point, would love to hear a bit more about kind of the company and specifically, like, where you support

Customers, and the theme of our podcast is transformation. So can you talk maybe about what are the kinds of transformations happening in your industry, and kind of where do you fit in?

Yeah, so, so we have two business businesses that seem to be.

Somewhat different from each other.

Um, but I'll share with you how owning.

The second business, the combination of Moresby and Stack.

has forced us to look at our business through a different lens.

So, the stat recovery business has been in operation coming up on 10 years.

Um, two great founders.

Blood and sweat, building the business and sold it to to a private equity firm, Cambridge Capital, about 2 and a half years ago.

And, um…

And, and, and the Moresby Group, similarly.

Two great founders own that business for right around the same time, almost 10 years.

And, uh, and they were acquired by Cambridge Capital and

combined with STAT earlier this year, in January.

of this year. Um…

The, the stat business.

has historically been

In the business of what's called revenue recovery or at a base level deduction management. So.

The consumer packaged goods suppliers into large retailers like Target and Amazon and Kroger and Walmart and others.

Um, they are… they are sort of continually.

hit with…

With fees and penalties and deductions and chargebacks by the retailer.

Um, many of them entirely appropriate, but others the result of human error.

Um, that… that eat away at the margins of those.

those CPG suppliers.

Um, so, things like whether you've delivered something on time, or in full.

Or to the right location.

And.

And, and if, if you don't do those things then

Based on the magnitude of the size of the retailer.

Um, it, it could create

real problems in the warehouse for how they manage and handle those exceptions, so…

There's a reason why they charge deductions to the clients to make up for some of the.

costs of having to deal with those exceptions on a day-to-day basis.

But as I said, there's oftentimes.

these deductions are the result of human error.

And so what we do is, uh, we've developed some proprietary tools over the last, coming up on 10 years.

Where we help those suppliers.

To recover the dollars that rightfully should not have been deducted.

And in those cases, the retailers are absolutely willing and 100% proactive in delivering those dollars back to

to our clients. Retailers want clean books as well. It's not… it's not a one-way street here.

So our clients get their dollars back,

And, um,

And the retailers get it cleaned up off their books. That's the stat business. We serve the suppliers into the retailers.

On the Moresby side of the business, as I said, it's a bit of a different business. Moresby.

works with Fortune 1000 companies. Their typical client is north of $20 billion in annual revenue.

And their typical client has a very high cost of sales, so a.

A consultancy business,

or a software business where their largest expense is people wouldn't be a great client.

for Moresby, and they probably wouldn't use Moresby's service.

But for distributors and manufacturers.

Healthcare.

hospital groups where they have a high cost of sale, they're buying a lot of equipment, or they're, they're.

They're buying lots of services and products to support their business.

Those are the better candidates. And so.

Um, those companies are often.

Um, under the most margin pressure.

And those companies are often in the midst of some type of a cost transformation exercise.

And so, what the Moresby Group does.

is works with those clients.

To to negotiate.

Um…

Payment terms and payment price, purchase price.

For the long tail of their supplier base.

So if you think about of a fortune 500 or 1000 company,

Maybe they're global in all likelihood, maybe they've got 15, 20, 30,000 different suppliers around the planet.

And in most cases, they have really seasoned and robust procurement teams. They have to, to be that size.

Those procurement teams are not actively managing those 25,000 or 30,000 suppliers. There's a bit of the 80-20 rule. They might be managing.

20% of the suppliers that are 75-80% of the spend.

And the rest of them, in many cases, they don't have contact information. They're not exactly sure what they're buying. It's done at a local office in Antwerp, Belgium.

Um, and… but…

These, in total, this 20% or 30% of the spend could be 2, 3, 5 billion dollars in spend.

So, it's an enormous amount of dollars that they just don't have the bandwidth to pay attention to.

And Moresby has developed proprietary processes.

that enable them to vet that.

group of long-tail suppliers determine where they're likely to have.

The greatest opportunity for success in renegotiating purchase price or payment terms.

And then actively managing those negotiations on behalf.

Hmm

of the client. And they'll do so as part of the client.

And so that's their business. Now, when we combine the two together.

Um, they're very different. Moresby sells to sea level. They sell to the CFO, to the chief procurement officer, the chief supply chain officer.

At STAT, we tend to sell to the VP of Sales.

or to a… to maybe a director level or VP of accounting.

Um, so a different…

Client profile that we're selling to.

Um, so it doesn't… it doesn't immediately seem obvious how you'd put those two together. But when we think about the two businesses.

Together, then we view them through the lens of.

We are a margin defense system collectively, or we are a.

The profitability…

partner to the office of the CFO.

And when you look at it through that lens, you could consider a number of additional capabilities.

that we could provide our clients that would be enormous value to them.

And so that's how we're thinking about it. We like to say we need to earn our way into becoming a platform.

These two single-point solutions we have, one specifically helping CPG suppliers,

The other, helping…

the largest companies in the world that have heavy cost of goods sold.

They're not necessarily compatible yet.

To build a platform around. As I said, two single-point solutions.

But eventually, we will…

put more products and features around them and earn the right to call ourselves a platform. And that's the direction we're headed.

Yeah, yeah, so interesting. And I like that overall kind of umbrella positioning because I think it was we were talking earlier about strategic priorities, kind of putting yourself in the right category. And it doesn't mean we have to solve kind of all the things within that category, but it kind of helps with that roadmap and to prioritize

Both for product team, kind of what goes in next? Where do we focus on, but also paint that vision, I would imagine for sales and marketing to kind of hear the right things when they're in sales conversations and bring the right kind of market feedback back to kind of help inform that.

Thank you for sharing that.

You know, Natalie, it's funny, though, even though these businesses are seemingly so different from each other.

We at STAT have been asked,

If we will negotiate for suppliers. And Moresby has been asked.

If they handle deductions.

just in the day-to-day of their negotiations. So, there is even that little bit of overlap already.

And it will become more relevant for us as we build out a shared data layer, intelligence layer,

and start to enrich.

each other's data with the other.

And, um, and start to be able to provide more insights to our clients. So we're really excited about the changes that are coming for our businesses.

Yeah, yeah, well, it does sound exciting. And I know, Mark, we're nearing the end of our time. I would love to kind of hear a little bit more about you personally and maybe take us back to your childhood. Are there any kind of stories or experiences that really shaped kind of who you became kind of as an adult in your career

I'm not sure many that I want to share publicly, but…

You know, I was born and raised

Uh, in New York, um, out east on Long Island in a very, sort of,

Uh, safe and middle class sort of upbringing.

And, um…

Uh, decided to go to college down south at the University of Miami on a, on an academic scholarship, and then I

went to, uh, to law school.

And I did that on the West Coast. Most lawyers.

uh, tend to work around the area that they end up going to law school in and I thought, well.

California seemed really nice at the time.

Um, so, uh, I met my wife in California, and we moved up to the Bay Area and lived there for almost 30 years.

Um, and, um, and everything that I was involved in, either as a lawyer or.

In, in business has been technology related.

Um, I just enjoy that, and I enjoy not only.

Um, the technology itself,

And I'm not a technologist, but it's always fun and interesting for me to be around that.

But the passion of the entrepreneurs and the people.

involved in these businesses that in many cases really believe that they are changing lives, and they are making things that are better for people.

And that, for me is so inspiring to be around. I just love that.

Um, and so.

You know, I've really tried to put myself in positions over and over again to find those types of situations and.

the industries that I've been involved in,

Um, don't have a lot of consistency. They sort of span different areas of software and hardware.

But for me, the one thing that I've always looked for

Is the people and that passion.

And what are they building and why?

And there's a connective tissue between those answers to those questions and the various companies that I've been a part of.

I love that. I mean, I do will say, like, passionate energy is infectious, right? So anytime you can put yourself around that, that's a… that's a positive.

100%.

And I'd love to ask Mark, what would you say is the best piece of advice you've been given, whether in a business or personally, that still shapes you?

There's a lot of them.

Um…

I think it's something we've talked about already, and that is, um…

That, that people hear things differently from each other.

And it's really important to make sure

that if you want to include a larger number of people,

in an understanding of a particular topic or action.

That you really think

How can I, how can I act and, and speak about what we need to do.

In a number of different ways, so that I pull in the most number of people.

Uh, to make sure that they understand it.

Well, thank you for that, and thank you for so eloquently bringing us full circle to where we started the discussion. As we do wrap up the conversation, can you tell our listeners how they can reach you if they want to get in touch?

Yeah, absolutely. Um, you can find me through either Moresby or Stat at mark at statrecovery.com. Very easy to find me.

Wonderful. Well, thank you. I really loved this conversation, and there's so much that I enjoyed talking about, but especially the way we started with your experience at Fabrinet and how that kind of

Brought the importance around thinking of alignment and communication and all the themes that we've been talking about. So thank you so much for that.

Thank you, Natalie, I've enjoyed it.

I have as well. And thank you too to everyone who's listening. If today's conversations parked something for you, and I am sure that it did, please pass this along to another leader because we know that insights like this fuel fresh thinking for all of us and help us drive real transformation in our companies and in ourselves.

Thanks again, Mark. And this has been another wonderful conversation on Shift and Thrive. I'll see you all next time.

Wonderful. Thank you, Mark.

You're very welcome. You do a great job at that, Natalie.

That was great. You're a pro at this.

That was fun.

Yeah, I appreciate you having me and, um…

And, you know, I, I learned from every one of these conversations, you, uh, you do a really good job.

Oh, thank you.

at framing the discussion, so I appreciated that.

Well, thank you. I love it. And just to share next steps. So I think your episode is getting released next week on Wednesday.

So by Wednesday morning, it should be out in all the podcast networks

And we will send you an email Wednesday morning with the links. We'll have a social post on LinkedIn with a video clip of something that you shared during the conversation so we can promote that. And I always say, if there's any other kind of video footage or anything else from the conversation that's helpful to you, just reach out. Happy to

share that as well

And if you know anybody else that you think would be an interesting guest on the show, please let me know now or in the future.

I will, I will definitely do that, ok, thank you so much.

Wonderful. Thanks so much. Have a good rest of your day.

You too, bye-bye.

Bye-bye.