Interview: Gary Weinstein, COO of Providence Equity Partners
This will be the first in an ongoing series of interviews with members of the Private Equity industry. My hope is to offer insights besides my own in the blog. Today I will cover aspects of the role of the COO for Private Equity firms, which a topic I have addressed in a previous blog entry.
Gary Weinstein, the COO of Providence Equity Partners, was gracious enough to spend some time with me and will be the participant in today’s interview. Just to provide some background on Gary, prior to joining Providence in 2008, he was the Managing Director and Global Chief Administrative Officer of investment banking at Lehman Brothers in addition to other leading roles in that firm. He also served as the CEO of Thermotrex Corporation from 1996 to 1999. Providence Equity Partners is the leading global private equity firm specializing in equity investments in media, entertainment, communications and information companies around the world. The firm has approximately $22 billion in equity commitments and has invested in more than 100 companies operating in over 20 countries since its inception in 1989.
Since role of the COO is newer for most Private Equity firms, how has your transition been to the role?
(GW): The transition itself was relatively seamless due to having similar responsibilities, reporting lines and employee backgrounds as when I was with Lehman Brothers. The biggest difference would be the size of the organization, with Providence Equity being much smaller than the Lehman Brothers organization. The interesting thing though is the close culture Providence Equity has been able to develop due to its smaller size. You make it easier, not 100% foolproof, to match your candidates to that culture when you are hiring on a smaller scale.
How was your introductory period at Providence Equity?
(GW): As with any change, I was met with resistance and relief. The resistance was from those who were worried about flexibility and access in the organization. Relief was felt by those who saw the need for common processes and centralized operational support.
The difficult part for me personally was the desire to immediately start putting my 20+ years of experience into practice, but I received some great advice and support from the Founders who wanted me to learn the organization and people before implementing changes. Because they had the patience and a longer term view, it allowed me a longer runway to understand the group which will help me be more successful.
Can you comment on the organizational complexities you faced when you started?
(GW): The biggest issue is that this is an entrepreneurial organization that needs to move in a nimble fashion. Because of that, bureaucracies were avoided as individual groups worked in isolation to solve their own problems. I had to establish a foundation in which the constituencies could trust a repeatable, centralized process that would be responsive to their needs.
Do you have an opinion as to the size at which PE firms should be before incorporating the COO role?
(GW): First you need to have some pain that needs to be addressed; it could be finance and accounting, reporting, systems, whatever such that the change imperative exists. My guess that is that there is some minimum number of staff between 50-100 to consider a dedicated position, it also depends on the geographic dispersion as well. However, even with smaller firm, a Senior Managing Director may want to focus elsewhere, which would create a role for an operations person. You would then match the seniority required to appropriately manage the role. It is a mix of experience and needs.
Do you have any suggestions for other COOs at Private Equity firms?
(GW): At the end of the day, it is not just a capital business, it is a people business. You must understand the need and goals of the organization in order to be successful.
