Looking Beyond Financials

When looking at a relationship with a private equity firm, be sure to compare its management style with yours, said Andrew Studdert, chairman, president, and CEO of NES Rentals, a national heavy equipment rental firm.

Studdert, who has overseen the emergence of NES from bankruptcy and its transition from public to private ownership in the past five years, was the morning keynote speaker at the sixth annual Beecken Petty O’Keefe & Company Private Equity Conference. Held February 16 at the Chicago Cultural Center, the event was organized by the student-led Entrepreneurship, Venture Capital & Private Equity Group and the Michael P. Polsky Center for Entrepreneurship.

Within two years of joining NES, Studdert brought the company out of bankruptcy. He said the turning point in its recovery was his insistence on safety. “As a business leader, your single most important job is to secure the safety of employees and the public,” Studdert said. “That will come back to you in spades.”

Studdert said a leader must establish clear principles based on serving employees well. “Don’t take advantage of people,” he said. “Generosity to employees plays well. ‘Being principled’ isn’t sticking to the letter of the law, it’s having a culture that lets people know your decision before you make it.”

In fact, Studdert suggested companies cultivate a family atmosphere. He believes management should help employees through hard times and counsel them about how to improve performance. This may not be a traditional business structure, “but it’s a trend you’ll see going forward,” he said. “It’s critical to promote a family culture.”

Within that culture, Studdert said executives should promote teamwork. Don’t segregate people within silos, but work to unify the company. “There’s amazing improvement in productivity when the team works together rather than back-stabbing.”

Since productivity improves when management is focused, Studdert recommended addressing issues that have a domino effect. “The way to move forward in a company with problems is to pick the most influential areas to change. Then other things will change too.”

Finally, Studdert said, “The worst thing executives can do is show up at a new company and decide everyone should go.” He urged patience in determining weak links and taking time to evaluate needs. “Bring in the people you need,” he said, “but do it by augmenting the good people already in place. Then you end up with a world-class management team.”

Steve Cook, ’90, cofounder of Accretive LLC, was surprised and pleased by Studdert’s talk of operations. “It takes financial engineering and an operational blueprint to be successful,” he said.

—Carmen Marti