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Within the Shore Resource Team is a specialized group called the Centers of Excellence (COE). COEs came from operating careers to provide subject matter expertise and support to portfolio companies. COEs directly support companies on projects, share best practices between companies, and promote connectivity between companies so that 40+ companies create a competitive advantage through collaboration.

 

In this episode we discuss Shore’s COE focused on Human Resources. Sarah Gabriel, Chief People Officer for Shore, talks about the unique employee value proposition that Shore provides our portfolio companies and their people. As part of this, she also shares how HR leaders from across the portfolio work together to support each other and problem-solve through both formal gatherings and informal relationships and interactions.

Transcript

 

Introduction

Anderson Williams: Welcome to Bigger. Stronger. Faster., the podcast exploring how Shore Capital Partners brings billion-dollar resources to the microcap space. Centers of Excellence at Shore Capital are subject matter experts who provide their functional expertise to support our portfolio companies. COEs, as they're known, share best practices and engage with our portfolio companies to address real business challenges, and to create opportunities far beyond what a traditional microcap company would be able to do on its own.

In this episode, we highlight Shore Capital's Center of Excellence focused on Human Resources.

Welcome, Sarah.

Sarah Gabriel: Thank you. Thank you for having me.

Anderson Williams: Of course. Will you just introduce yourself and say what you do at Shore Capital?

Sarah Gabriel: Sure. So, I am Sarah Gabriel, and I am the Chief People Officer at Shore Capital.

Anderson Williams: You know, what did you do before coming to Shore?

Sarah Gabriel: I had, I'll call it several buckets of professional life. So, I have a chapter as a very fancy lawyer, a partner at Kirkland and Ellis based out of the Chicago office doing M&A deal work, IPOs, high yield bonds, public company advisory work for primarily private equity backed companies.

So, living in between portfolio companies and the sponsor as their deal council. So that's one chapter. I left my fancy law chapter and moved into my entrepreneurial chapter. So, my kid's dad and I started a business together. We formed it out of nothing, birthed just by an idea and created a business in water recycling in the energy space and grew that.

We bootstrapped that from idea to a big successful company. We have a private equity sponsor in that business. And I left that business to go back to my law practice. And it was in that moment of time that Justin approached me to come to Shore.

Anderson Williams: Given the background in law, but then also as an entrepreneur, what was it that drew you to Shore?

Sarah Gabriel: I have spent my career in private equity in some capacity. So as counsel and then as the founder taking on private equity as a business partner. And it was so important to me and what drew me to Shore was really that lens of a founder myself to say, I only want to be in private equity if I'm in it in a way that is helping our companies grow and get to a place they couldn't achieve on their own.

So, I know what it is to put your life savings and your heart and your soul into a business and to put all your risk and energy into something. And I only want to be somewhere that matches that spirit and honors that with an equal commitment to get it to a better place. And that is what attracted me to Shore.

Anderson Williams: And will you just describe a little bit about what you do in your current role and how you work across the portfolio?

Sarah Gabriel: So, I sit inside of our Center of Excellence, which is a great putting our money where our mouth is in terms of investment that Shore has made. I think it's a huge differentiator in private equity generally.

My job is portfolio facing. So, I work for our portfolio companies, helping them invest and strategize around human capital. So, my cohort as part of that are the HR leaders across all portfolio companies.

Challenges And Opportunities

Anderson Williams: And Shore obviously invests in a lot of different areas in terms of our verticals. What are some of the consistent challenges or opportunities that you see when you look across the portfolio that your HR leaders are working on dealing with, however you want to put it.

Sarah Gabriel: So, a huge part of Shore is this concept that process is the star and that we have the ability to see pattern recognition in a way that we have purview over 40 plus companies. So, what you're seeing inside of one you've often seen across many. And what that allows us to do regardless of industry is say when we have this incredible mission, this charter of growth that is both organic but also highly acquisitive, how are we going to get there and how are we going to scale that successfully?

I think there's a unique challenge to that from a human capital perspective. When you think about not only the sheer volume of employees that you're growing quarterly, monthly, but the way in which you're growing. So, some organic, but a lot of acquisitive growth. So, you're inheriting new waves of employees with relative frequency that are coming from different practices.

A different industrial company, a different food and beverage company. And so how we marry that culture, how we honor the partner promises we've made to our doctors, to our investors, to our founders to say, we're going to deliver on this thing we told you we could do. And in human capital, particularly, we don't have a steady state.

There's not one day that's a steady state. So how do we grow in a way that helps us scale very efficiently, but then still creates a culture, creates a spirit of cohesion, creates an engagement with the employee base so that they can find a mission driven purpose in their work.

Anderson Williams: Yeah. And I think, you know, we've heard Justin talk about our people and our companies are our greatest asset.

And your cohorts sit right at the heart of that, right? And it's a combination, as we've talked about extensively, of everything from basic hiring and compliance training on up to integrations and culture building on up to professional development and scaling your people faster than the company scale so that the company can scale.

I mean, it's a broad swath of a lot of topics.

Sarah Gabriel: It's a lot of topics often manned by one person wearing a lot of hats. So, what we really try and do is help resource that for our HR leaders. Some of the ways we do that are very obvious. So, we create vendor relationships and leverage the power of Shore to create great terms with select approved vendors that we know are reliable partners.

So, taking the negotiation piece out of that, having a recommended list of go tos. Another way that we do that is we have programming. So, we have quarterly cohort meetings that are programmatic in terms of learning topics. And I think probably my favorite part of the cohort family is really creating this sense of community.

So, this idea of building relationships organically with each other, and I'll say back to programmatic, they are assigned buddies. So, when you're a new HR leader in the cohort, you'll be matched with a more senior HR leader, sometimes in your space, sometimes not, but there'll be a commonality there. Whether it's, hey, you both have remote workforces that you're handling.

I think you can bond over that. And this one is one year further down the path, or you have hourly employees or you're both in healthcare, but some sort of bonding element to the buddy match. So, you have that built in friend, but then this idea that we're creating community so they can organically problem solve together.

But also, that there's some real intention around facilitating certain topics. So, I'll give you a great example of that. So, we recently had two portfolio companies in the earlier life cycle phase, starting to get to that inflection point and their MNA activity when they say, hey, we've established a brand, we've established a way that we're doing these M&A integrations that work for us.

It feels like we could be more efficient at this. Does anyone have advice? And we put together an integrations workshop led by one of our most seasoned companies that has really mechanized this process best in class. And it was an hour workshop just talking through, here's how we do this.

Here's how we tackle with a great deal of specificity, how are we onboarding employees into your payroll system? How are you presenting a benefit side by side comparison so they can be excited about what's to come with the new company? How are you orienting them to HR? Do they have a business partner point of contact for FAQs as part of the M&A process?

But very tactical, led by a seasoned Shore family member to two younger in the life cycle companies that I facilitated that. But that's out of an organic need, again, led by peer groups. And that's the type of best practice sharing that I think is so powerful inside of the cohort.

The Network Effect

Anderson Williams: Yeah, it's amazing. I mean, it really is captures the idea of the network effect you get from being a part of a portfolio.

Sarah Gabriel: Completely. I'll give you another example. So, we had an HR leader, relatively new, looking for ways to have a performance component of their compensation and brainstorming around what are metrics, how have you built this into performance review process? What has passed muster with the Shore board to be deemed worthy of consideration?

And I was able to connect two HR leaders on this topic. One trying to create a performance bonus component and one that already had done that in a very successful way. So, they could share then with each other what worked, what didn't, why they chose certain metrics to use as their performance elements.

And again, this is just helping companies skip steps. We say in Shore a lot, there is rarely an issue of first impression. And so how can we help field those questions and connect people together, share best practices in a way that helps them skip steps and get to the end game more quickly?

Anderson Williams: How does that work practically?

You mentioned the cohort, but do these HR leaders just give you a call, drop you an email, just practically speaking? I know that doesn't just happen at the cohort meetings. How does it work?

Sarah Gabriel: My favorite part of my job is the community that we create together. And we work at that with a lot of intention.

We cultivate engagement. By nature, I think the people who are drawn to HR work love people. I think the unique challenge of being an HR leader is you're often absorbing the needs of others into yourself. And you have small teams, and you don't have anywhere to go with that. And so we are that for each other.

We are that peer group. We are that listening ear. We are that phone a friend. So, we create a lot of intentional dialogue. For example, pay transparency was a topic that was trending in the beginning of the year. New potential regulations. And there was a lot of academic articles that were shared. There was more practical tips.

I wrote a white paper, if you will, discussing what would be the practical implications. And then people formed connection groups on their own to discuss the ways that was presenting in their businesses. Another example, we've got our food and beverage group that has a unique set of challenges, different than multi-site healthcare.

And they have come together and formed their own group that came to be by one of those HR leaders reaching out to me and saying, Sarah, we've got our own set of needs. Would you mind if I just decided to create this group of our food and bev HR leaders? And that's exactly what we want to happen. That's the type of peer sharing we're looking to grow by doing this cohort engagement.

Anderson Williams: Yeah, and it's where the pattern recognition takes you so far. And then there's a sub pattern in their businesses where you do have hourly workers or you have a factory workers or you have some things that are quite a bit different in terms of how you manage, how you recruit, how you retain, how you develop compared to traditional health care worker, for example.

Sarah Gabriel: And they love having each other for those. I'll give you another example. We have a few businesses in different funds that are managing remote workforces. And so how do we engage an employee base that is disparate across the country? How do we make sure we're all communicating with each other effectively?

We're excited about work. How do we encourage people to come back to work for those office environments that are reengaging the back to work momentum? And we've created connection points on those topics. Inside of the cohort, we have an email chain that we just generally throw out open questions or topics.

We have the LMS, the learning management system, so the HR cohort, were standing up our team page if you will, that takes a lot of programmatic lessons we've done in the organized quarterly calls, post them in a way that are easily accessible, cross references, different relevant topics from Shore University.

Tools To Succeed

Anderson Williams: So, Sarah, obviously our companies are growing fast and they're going fast in a very particular five year, give or take window of time. What are some of the key success factors, key ideas, key processes, whatever it might be from an HR perspective that, you know, all of your leaders need to understand to scale?

Sarah Gabriel: Sure. So, this is a big part of the work. We joke in HR there's a Maslow's hierarchy of needs, which is people need to be paid correctly and on time. They need to understand their benefits. But back to a comment I made earlier, we don't have a steady state in this chair at Shore. So that's something that needs to be on autopilot regardless of the M&A environment.

And so, what we try and do is say, okay, we're going to take those as givens. And how can I help you as your HR leader focus on developing those new skills that are more unique to M&A? One of the things we did at our in-person cohort was had an M&A workshop that was led by the head of M&A integration for Walmart. And he came in and did a workshop with our HR leaders on a bit of cultural diligence and most importantly the integration piece.

So, it's often the case, our HR leaders are not involved in the diligence process, but then are left to inherit a new employee base of 10, 30, 50 new employees. And so how do we train and empower tools for success in our HR leaders in that environment? And we do things like the workshop that I mentioned that was at our in-person cohort.

We had the focus group that did the integration playbook with a peer, led by a peer. But there are common themes that run through this. So, we've got a town hall template. That says, hey, when you're out prospecting, here's a way to introduce a potential target to who you are from a people perspective.

You've got your integration roadmap, which will be unique to each business, but the components of that remain the same. For example, one of them is a benefit side by side to very clearly illustrate what the world will look like in a post close environment. Another tool in that same fashion is an FAQ. So, let's be prepared for the questions we know people are going to have.

We focus a lot on this idea of creating an environment where people have the opportunity to feel heard. So, we have the FAQs. We want to make sure they've got a business partner to go to. We also want to make sure we're doing pulse surveys at 30, 60, 90 days post-close to make sure they understand what's expected of me.

Do I have the tools I need to succeed? We work really intentionally to help our HR leaders be armed with these sort of key building blocks for creating their own M&A roadmaps. But those are some of the examples of things we found to be really commonplace in our most successful acquisitive companies.

Employee Value Prop

Anderson Williams: Yeah, and I think just reinforcing from an HR perspective. What a unique opportunity and challenge M&A activity is when you bring in groups at a time, groups that have ways of doing things and groups that have technologies and groups that have cultures and groups that, you know, there's a lot of nuance to that version of HR that the average person who works in a single standalone company would really have never experienced.

Sarah Gabriel: Absolutely. And that's just one piece. So that's the integration piece, but then we've got to grow as a whole, we've got to come together as a whole. And so, another part of our work is around engagement and team cohesion, aligning around a vision. One of the topics at our Leadership Academy over the summer, we had a panel of HR leaders and one of the topics we discussed were successful tactics for communication.

So, when you have multi-site healthcare, for example, people are not in front of their computers, they're seeing patients, people aren't in the same office, they're spread across a geographic region. How do you successfully communicate what's important this week? Same, let's take it for industrials. You've got three different manufacturing sites with large groups of people.

How are you effectively trickling out information in a way that engages your employee base and gets us all marching towards the same goal? So that's another example of topics we've discussed in varying operating environments. The concept is of equal importance, but the execution varies by what resonates with your employee base.

And I think that's when it's so powerful to have 40 plus HR leaders coming together to say, this is what worked for me, this is what didn't, here is where we found success. There are so many more components to an employee experience that makes them engaged and that makes them stay in their work. And we call that broadly the employee value proposition.

Why am I here? What do I get by working here? And one of the things I think we are uniquely positioned to provide our employees is development. So skills training is specific to a company. I like to think of that as a differentiated concept than development. So skills training is how am I the best dental hygienist?

How do I make sure I'm successfully executing on the line? That's a different thing than how do I manage people? How do I engage in a performance review? How do I goal set? How do I communicate? When we think about the employee value proposition, what we are in a unique position to resource from Shore is this idea that we can provide real development.

Shore has put an enormous investment into creating Shore University, which really gives that leadership development training. These are leadership development tools, which really allows us to provide this employee value prop to our team members in a way that goes beyond a paycheck, in a way that helps them see, I have a career path.

Anderson Williams: I love hearing you talk about the employee value proposition, and I'm just struck by that is not the typical thing that people think about private equity investing in companies and then thinking about all the people in those companies and what value they're getting out of it, not just the financial value the seller gets out of it, but what is the opportunity there for everybody in the company?

That's a pretty powerful thing, and I just didn't want to skim over that.

Sarah Gabriel: It's worth doubling down on this topic because I think honestly, it goes back to why did I come here and why do I do this work? So again, I came here because Shore is a place that values founders and that adds value to businesses that gets them somewhere they wouldn't be alone.

If we take that same concept and apply that to our employees, when else would you get to be a part of this kind of a rocket ship? When else would you get to see execution done in such a systematic way that has time and time again led to a very successful outcome? It's an amazing learning opportunity.

It's an amazing growth opportunity. And you have visibility not just inside of your own company and all the success that they're achieving, but then Shore has invested tremendously in the network that is Shore. So, you are creating professional contacts. You are growing yourself through Shore University, through our ELA, through the relationships you make on the board, on our operating partners.

You just are experiencing and accessing things at a level you wouldn't have otherwise encountered had you not been able to be a part of this.

Anderson Williams: If you enjoyed this episode, check out our other Bigger. Stronger. Faster. episodes at www.shorecp.university/podcasts. There you will also find episodes from our Microcap Moments, as well as Everyday Heroes series, each highlighting the people and stories that make the microcap space unique.

This podcast was produced by Shore Capital Partners with story and narration by Anderson Williams. Recording and editing by Andrew Malone. Editing by Reel Audiobooks. Sound design, mixing and mastering by Mark Galup of Reel Audiobooks.

Special thanks to Sarah Gabriel.

This podcast is the property of Shore Capital Partners, LLC. None of the content herein is investment advice, an offer of investment advisory services, nor a recommendation or offer relating to any security. See the Terms of Use page on the Shore Capital website for other important information.

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