September 25, 2017

Five Questions with Dick Boyce, former Partner with TPG

Five Questions with Dick Boyce, former Partner with TPG

Mr. Boyce retired from the partnership at TPG Capital, one of the largest global investment partnerships, owning 107 companies with over $140 Billion in revenue.  He founded and led TPG’s Operating Group, which drives performance improvement across all the TPG companies, from 1997 to 2013.  In his first role, he served as the Chief Executive Officer of J.Crew Group, Inc., from 1997-1999, and as a Board member from 1997-2006.  He also served as the Chairman of both Burger King Corporation and Del Monte Foods. Prior to joining TPG, Mr. Boyce was a senior officer at PepsiCo. Inc. and was previously a partner at Bain & Company.  He received a BSE from Princeton University and received his MBA from Stanford Graduate School of Business. He served on the Mitt Romney 2012 National Board. Mr. Boyce has been married to Sandy for 29 years and has two sons.

The PE industry now has $2.5 trillion in assets under management. What do you see as the biggest change in the space since you joined it?

As the money has gotten bigger across the private equity sector, one of the more notable changes has been the increase in specialization inside portfolio operations teams. When I was first building out this capability at TPG we pursued a model where we had generalists who were good utility players in the Portfolio Ops Group. I tend to think that today this is a dying breed. It’s been driven, really, by the deal guys and their legitimate preferences for sector depth for an investing edge. It used to be that a group comprised of functional experts was the norm, but today you need to be an industry guy to impact the entire lifecycle of a deal; starting with the investment thesis and identification of targets, driving a value added plan, and ultimately ending at the exit point. Functional guys  cannot play the same role at the same pace across that chain.

In some ways though, the model is actually more of the same. While the days of buying well run companies and paying a premium are likely over because the markets for them to access capital are so efficient, today you still buy things when there’s a problem in the valuation or operations  that you identify and can solve. That is still what leads to real returns for investors.

Lastly, it’s almost as if today big private equity is providing an interim corporate structure step for companies. It is allowing those companies that prefer to extend their private life to do so in a way that didn’t exist 20 years ago. Founders can easily stay away from the public markets for longer periods of time. This has created a huge opportunity in the larger cap growth equity market for putting significant amounts of capital to work.

What was it about your background that made you effective in your role?

I had known both Bill Price and Jim Coulter (cofounders at TPG) from our days together at Bain & Company. In the early days at TPG, they had created a fund built around the acquisition of Continental Airlines. To support the deal, they hired one of the largest team of Bain consultants ever deployed on a project. Operational value add was a core part of their turnaround strategy at Continental. They knew that they needed to have a TPG executive at the organization to oversee that vital element of transformation. I then met David Bonderman, and the four of us started to kick around ideas for what this role would look like. I was very concerned with testing their commitment to it but, once comfortable, the job and people at the firm were a great fit for me.

I initially came in as a consultant on a year-to-year contract and took equity in the deals on which I was working. Back then this included J.Crew and Del Monte which were both big successes for TPG. That said, over the course of time, we realized that we would want to build out the group and decided that in order to do so these roles needed to mature into equity partners who earned carry across the entire fund. I think this was a brilliant innovation on their part, and planted the seed for the long term integration of this capability inside their firm.

I think I was effective in this role because at the end of the day there was never a job that was too small for me. My ego never demanded that I go run the companies; I wanted the CEO be the star. I think my blended background of consulting and operating experience helped me strike a good balance for what was needed in this role. Also, though it was many years ago, my undergraduate training as an engineer was an advantage for me. Linear, logical and structured thinking and a program management background helped me sift through the challenges of doing this job.

It also helps to understand the rules of engagement inside PE and start with the right mindset. PE firms are generally deal shops run by bankers who are ruthless, but in a good way. Everything boils down to “Are you adding value or not?” They’re not seeking  to be your buddy so political maneuvering isn’t necessarily as fruitful as it might be in a traditional corporate context. You’ve got to carry your weight and make a difference in the deal. I told myself never to stray too far away from getting wins on specific deals, and that influence inside the firm would follow.

What things can a new Ops Partner do to smooth their transition onto the team and into the firm’s culture? What’s a common misstep?

First and foremost, it begins with managing the Deal Partner’s expectations. You need to understand their priorities and assess the situation inside the portfolio company. You can do so with a classic Bain breakdown of the strategy, execution and people. The Deal Partners need to understand that you understand the issues. This way they feel comfortable backing away and letting you take control of the value creation.

All good operators want to work on the critical  problems and bring solutions to the table. Start with that mindset in approaching the Deal guys. It shows them that you’re creative and you’re not a pessimist. However, balance it with  being realistic. Focus on the big important stuff. As Meg Whitman has said, “Run to the fire not to the smoke.” In broken situations you may need to think about the exit options which preserve some valuation and can be actionable in the near term. Sometimes the best thing to do is to sell now, and the deal team will appreciate your holistic thinking about the asset.

Second, you must create an action plan on which everyone is aligned, including both the deal team and the management team. If you miss on this it is hard to recover. Time moves quickly in a private equity scenario, and doing work on an unprioritized issue is simply a waste of resources.

Third, you want the people across the firm seeking out your input and participation. If they’re leaning on you to attend the Monday morning meetings more frequently, this is a good sign. It likely means that you are focusing your attention out in the field and creating value, not hanging around the TPG office. If you’re productive in your role, they will crave your input on the things that matter most to them. This creates real staying power in a portfolio operations group. Notional participation on the investment committee is always secondary to making a tangible difference in a portfolio company.

Fourth, keep in mind the cultural differences that exist between you and the people inside the portfolio companies. Tune your antenna to connect with them on a more personal level. Those are your critical relationships. This is a gross generalization, but there are two types of people…. The Transactional type and the Relationship type. Deal people tend to be more transactional, that’s the nature of the work.  Deals happen because the terms are right, the negotiation was well executed, not because you have a good relationship with the seller. But on the operational side, progress is only  made through influence born out of mutual respect for one another… relationships matter at the portfolio company.

Did you develop any secret tactics or strategies to help you more effectively manage the time in your day?

This is really all about discipline and thoughtful self-direction, but there are some system wide approaches that we took to create more efficiencies. The reason that I was at the portfolio company in the first place is because they lacked people with my skill set. Bringing urgency, risk-taking, structured thinking and solutions to them is what they need, but sometimes it’s not obvious to them. You cannot accept mediocre performance inside the portfolio companies because you’ll get swamped covering for weakness. You must help them understand the reason for the rapid transformation and get their buy in to thinking that way every day when they show up to work.

At TPG we also found it helpful to codify some best practices and lay out a roadmap for specific recurring situations. This would include our Day 1 strategy on carve outs, our cadence around operations and people overview, our 100 Day planning process, our standardized reporting with templates, and our KPI process. Utilizing these forces better time management for all involved. For us, process was an enabler, and we always remembered to never substitute random activity for thought.

Any good recommendations for us from your personal reading list or your best binge watching show?

I’ve read hundreds of business books over the years, but come back to the ones below. I recommend them to CEOs because I think they round out an executive. Some are better known than others…

  • “Seven Habits of Highly Effective People” by Covey (old school but good)
  • “Zero-to-One” by Peter Thiel (contrarian yet at time obvious view of scaling and competition)
  • “The Hard Thing About Hard Things” by Horowitz (great in the moment view of the brutal challenge in startups that need to be redefined and where stuff just goes wrong)
  • “The Price of Everything” by Roberts (helps you think about pricing and its role in real world supply/demand mgmt.)
  • “The Signal and the Noise” – Great view of predictions from Nate Silver
  • “The Effective Executive” by Drucker (old school, but timeless)
  • “Design of Everyday Things” by Norman
  • “The Rise of Superman” – Referred to me by the Navy Seal who literally runs the Innovation Lab (for warfare) – Achieving full potential, next gen
  • “Black Swan” by Taleb
  • “Quiet – The power of introverts in a world that can’t stop talking” by Cain
  • Trilogy by Jim Collins – Good to Great, Built to Last, Great by Choice
  • “Let my People go Surfing” by Yves Chouinard
  • “Wisdom of Crowds” – More on forecasting
  • “The Ultimate Question” by Reichheld – Founder of Net Promoter Score
  • “Shoe Dog” by Phil Knight – Reminder of the power of Founder vision and tenacity



  1. Lee E. D.

    December 10th, 2017 at 8:25 pm

    Great comments and will be valuable as I’ve transitioned from private industry to contract PE work. His detailed accounts of how he maneuvered with a transaction audience, resonate with my own recent challenges.

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