The Shore Capital CXO Program

Tune in to this episode of Bigger. Stronger. Faster. and subscribe on Apple Podcasts, Spotify, or your preferred podcast platform to receive updates on our latest content.

The Shore Capital CXO Fellows Program seeks to place highly motivated and hungry young executives into Chief of Staff positions throughout the country with the mentorship and support needed to succeed, mature and grow into C-level executives.

Learn more about this unique opportunity for young, hungry executives and the Shore portfolio companies they serve. This episode includes interviews with the founder of the CXO program as well as several current CXOs about what the program is, how it works, and the impact it has.

Transcript

Introduction and CXO Creation

Anderson Williams: Welcome to Bigger. Stronger. Faster., the podcast exploring how Shore Capital Partners brings billion-dollar resources to the microcap space. In this episode, we highlight the Shore Capital Partners CXO program, which places highly motivated and hungry young executives into chief of staff positions with the mentorship and support needed to succeed, mature, and grow into C-level executives.

To start things off, I asked Tom Smithburg, who's a principal at Shore Capital Partners and the creator of the CXO program, to describe where the idea came from.

The CXO program was kind of your brainchild, is that right?

Tom Smithburg: Correct.

Anderson Williams: Tell me where that came from, how that came to be.

Tom Smithburg: So I remember graduating business school 2016 and, and everyone around us is looking for different jobs and there's really two categories of jobs.

You know, on the far left you've got the big groups, right? Your Deloittes, your Googles, awesome opportunities, but big companies, so you're a little fish and a big, big sea. On the other side you had search funds also a great opportunity, but a ton of risk. And there wasn't a whole lot in the middle that would excite entrepreneurs and give executives a high growth opportunity, but yet also a little bit more security that a search fund doesn't provide.

And at the same time, when we came back to Shore after business school, we saw a lot of opportunities in our portfolio companies where we have great teams, but there was a talent gap. And that talent gap was for young and hungry executives who have more of that investment banking, private equity or consulting background, but want to be operators and wanna apply all that knowledge to their companies.

So sitting there looking at schools and saying there's a gap in their schools. And I'm looking at our portfolio companies and I'm saying there's a talent gap in our companies that fits that same gap at school. So that's where the CXO program was born, and it was really a great product market fit opportunity for us.

Anderson Williams: And how did you think about recruiting or defining the role in those early days, and how has that evolved?

Tom Smithburg: Great question. The way we've framed the CXO program hasn't really changed since the beginning, which has been great, which is the CXO program is for young and hungry executives who want to be a CEO one day, but need a little bit more mileage first.

And we've been approaching the CXO program in that way from multiple facets. One from recruiting, we look for people who want to be CEOs or major C-suite executives. Very motivated, very hungry. Have that high, give a damn ratio or quota, if you will. And at the same time, from a growth and training standpoint, we know these are executives that are late twenties, early thirties, so they're still young.

They have a lot of hunger to grow, and so we try and give them as much growth opportunity as we possibly can to help them achieve their growth goals, but also at the same time, have a major impact within their portfolio companies and teams.

The First CXO

Anderson Williams: To get a better sense of what the CXO program has looked like in practice and over time, I ask the first ever CXO to share a bit about why he chose the program and how his expectations have played out in reality.

Tom Romanczuk: Tom Romanczuk, I work for a company called Innovia Medical, which is a medical device manufacturing company within Shore's med device portfolio. My current role is the Chief Development Officer.

Anderson Williams: And you started in the CXO program as CXO number one. What drew you to this? What were you looking for that the CXO program felt like the right fit for you at that time?

Tom Romanczuk: I was working for a company called Hub Group in a VP of Finance role. Pretty new out of my MBA, and I was really looking to move into something entrepreneurial. And what was important to me was to learn how to run a business. And so I wanted the best of both worlds in terms of working with smart people, but getting a lot of responsibility and frankly white space to learn and develop.

And I thought there was something unique that Shore, specifically and their CXO program, brought to the table on doing that.

Anderson Williams: And how has that played out for you at Innovia? You've now got four years in this role and evolving with the business that's growing and evolving. How has that expectation played out?

Tom Romanczuk: Frankly, better than I could have imagined. I thought the opportunity to learn under a more seasoned and I, don't let that get back to Terry, uh, CEO would be really good experience for me and it, and it really has. And then I think in terms of development, I've now had the opportunity to lead the finance efforts at Innovia.

I ran an operations division out in California and now I'm leading our M&A activity as the Chief Development Officer. So in terms of getting a rounded experience, it's been better than I could have imagined coming in.

Anderson Williams: And just gimme a sense, when you first started, what was the first responsibility you took on jumping in as a CXO?

Tom Romanczuk: I would say two come to mind. One was more so I would think FP&A, and that was what my experience had been. And I think as you try to come into any new organization, you want to be value additive really quickly. And so I probably fell back on some prior experiences to try and improve internal, external reporting, bank reporting.

And so that's where I spent a lot of my time. We had just done two acquisitions in that calendar year when I joined in 2018, and a lot of post-acquisition integration work to do, whether it was project management, finance related, I was a bit of the jack of all trades in terms of working across departments to really bring those together under the Innovia umbrella.

The Early Days of the Role

Anderson Williams: And while Tom offers the wisdom of hindsight, I also wanted to hear from a CXO that's in that early stage right now. About the choice to join the program, in this case from a consulting background, and the experience of the early days in the role. This is Hayley Hodgkins.

Hayley Hodgkins: I liked consulting. I thought it was really fast paced, really stimulating, getting to try a bunch of different industries and projects and meet a lot of interesting people and work with different people.

But the one thing that I always felt was missing was I just didn't feel like the incentives were closely aligned. You're obviously trying to drive results for the companies you're consulting for, but then you move on and you're not implementing that necessarily, and you're not really like seeing the fruits of your labor.

So when I went to business school, I was trying to figure out how can I do similarly interesting fast paced work, but have more skin in the game and really feel invested in what I'm doing and kind of see something through to the end. Joining an early stage platform, it's a little bit of everything.

Variety is the slice of life. I wear 50 different hats in a given day. And I like that. I like being agile. I like being flexible and adaptable and just kind of jumping into things. And so I think it's that personality type that's really drawn to the CXO program because you can't be someone that's just like, this is my lane.

I'm staying in it. You have to see the big picture. And if you find that exciting, I think it's a great opportunity.

Anderson Williams: I wanted to come back to Tom Smithburg to have him talk a little bit more about the logic and structure of the program and how Shore invests in the CXOs and their continued growth and learning, as well as how the CXOs provide a sort of support network for each other.

Tom Smithburg: I remember one of the early operating roles I had, I was always outside the room where it happened. In the CXO role, you're in the room where it happens all the time. So what does that mean? You're in the weekly calls with the executive team in Shore Capital. You're in the quarterly board meeting, so you're attending all the board meetings with all board members, Shore, the rest of your executive team.

You're going to the summer Executive Leadership Academy that Shore puts on every summer in Chicago, which is for the top five to 10 executives of every company. And then we also have a quarterly CXO Leadership Academy, which is only for CXOs. It's a great event. We bring world-class speakers and executives to come and mentor and teach CXOs on specific topics.

The Network Effect

Anderson Williams: Can you talk a little bit how that CXO group works as a network as well? So you bring people together? Obviously you've got young and hungry executives and future executives. How does that learning happen?

Tom Smithburg: Great question. So this is something that we were pretty intentional about early on, but then actually grew organically later on.

So intentionally early on, the idea was let's make the CXO cohorts kind of like a YPO group or a YPO forum where you come in as a CXO class and you grow together throughout this experience. And that's been really transformational see CXOs supporting one another, something we didn't do. One of the CXOs said, let's start a Slack channel on the side and not include Shore Capital.

Love that. And so now as new CXOs join the program, they're added to this Slack channel, which I've never seen, will never see it. And so CXOs have their own forum to connect and to support one another in different projects. Anecdotally, I've heard of a CXO has an issue on the Slack channel. Someone will put a message out there on Slack and say, has anyone ever dealt with issue X, Y, Z?

And they'll get five to 10 answers within 24 hours. So it's really been a great support network to again, help all the CXOs grow together and work together.

Anderson Williams: I asked Eliza Nagle more about her experience around how CXOs support each other to see if she had any particular examples she might share of what this really looks like. And in her response, she illuminates how the wisdom and impact of the program grow as the collective experiences of the CXOs grow.

Your cohort in particular has evolved almost more like a peer community where you know who's out there working on certain things, cause you've got enough communication that you can call and say, hey, how would you approach this or?

Eliza Nagle: Right, yeah. An example of that is my friend Mark Larson, who's from my class 2020, and there was a lot of change going on at Tandem. He had been in a similar position just the year before, so he was kind of my SOS call when I needed. And so it's great to pass that along to the new class of CXOs who are just now starting similar sorts of journeys at their portfolio company.

So it's kind of a pay it forward mentality.

Anderson Williams: In addition to the informal support, there are also formal gatherings and learning opportunities that are foundational to the CXO program. Erica Mazman describes her experience with these more structured opportunities and their relevance to her daily work.

Erica Mazman: Honestly, our more formal setting engagements that we have for the CXO program have been really beneficial. So we had a session, you know, a few months ago about negotiation and what are the key tactics that you can use and levers you can pull when you're negotiating with someone, whether it's your own salary, job description, or it's, you know, a pricing opportunity with a competitor or a potential partner.

And so really getting professional guidance on key topics that would affect any business leader has been a great opportunity for me to continue to expand my skillset and also provide value to my business the very next day.

Anderson Williams: When you have the chance to interview the likes of Tom and Haley and Eliza and Erica, it doesn't take long to realize that these are exceptional young executives.

Yes, they are young and hungry for growth and opportunity, but they're also already having a real impact on the success of their respective companies. So I wanted to know more about what makes a good CXO. What are the characteristics? I asked Tom Smithburg again for his insight.

The Main Mantra

Tom Smithburg: For me, when I think about a great CXO, I go back to what makes a great CEO.

And that's really three things. One, build a great team and culture. Two, set the right priorities, and three, work with your team to hold accountability and results. So on the first one, build a team. CXOs, when they start with us, their late twenties, early thirties, they've typically had some management experience in their past, but not a ton.

So what we're looking for is the ability to grow from an individual rock star contributor to a leader of rock stars. Someone who can build that team of rock stars, go out and recruit, retain, train, manage additional rock stars to their team. So that's number one. Number two, priorities. You have to be able as a CXO to sort through what are the opportunities and projects that are gonna have a huge, huge impact on the business, and take that out of the noise.

So the ability to prioritize and focus on what matters is absolutely critical. And then three, once you've built your team and you've identified the priorities that really matter, focus your team on the priorities that matter to drive results, meaningful results that either increase price, increase volume, or decrease cost in some way.

So when you grow a company 10 times, opportunities exist two to three years from now that don't exist today. And those are opportunities for CXOs to navigate into and identify where they want to add the biggest value and also maximize their career growth. As an example, a lot of our companies, when we first partner with them, they're 20 to 40 million of revenue.

You could be a CXO of, you know, right hand man or woman to the CEO at a company of that size. You could not do that for a company that would say two to 4 billion of revenue. Same thing. Fast forward five years, CXO does a terrific job and they say, hey, we want to do another lap with Shore, great. You can then come back and be a CEO of a company that's 20 to 40 million of revenue and help 10x that company over five years.

So, you know, why Shore? Why the CXO program? You know, I think this is a great program for young executives who are very ambitious and hungry, where we can then position them in companies that are a little bit smaller. And position them to have tremendous career success at a very early age.

Anderson Williams: Here again is Eliza.

Eliza Nagle: I think if you're looking to be at a growth stage company and to make a huge impact in a short period of time, very early on in your career, this is for you. I think it takes being a versatile athlete that, Shore likes to use that term, like just being able to plug and play anywhere in the company, wherever the biggest, meatiest challenge is.

And being willing to roll up your sleeves, and if you don't know the business that well or know that side of the business, being willing to learn it quickly and, uh, tap into any resources you need to do that. I would say you'd also have to be very collaborative. As I mentioned before, just willing to support other CXOs, and that's the power of the CXO family.

The more collaboration, the more knowledge and best practices that we share, the better it becomes for everybody. So it's only gonna be a growing program.

Tom Smithburg: I always go back to the main mantra for the CXO program, which is this is a program for young and hungry executives who wanna be CEOs one day who need a little bit more mileage first.

Everything about the CXO program always comes back to that mantra and that ethos, and that's from recruiting to growth and training to the CXO experience that every CXO has day in and day out. We think we're just getting started. We're really excited about the future of the CXO program and what I really hope to see within the next call it 18 to 36 months, is a great track record of now the CXO program is approaching its four year anniversary that we start having CXOs graduating from the program and ultimately becoming CEOs or other major C-suite executives for their second tour of duty with Shore.

So really, really excited for the future of the program and excited to see what's in store for the future with all these awesome CXOs.

Anderson Williams: 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 Tom Smithburg, Tom Romanczuk, Hailey Hodgkins, Eliza Nagle and Erica Mazman.

This podcast is the Property of Shore Capital Partners LLC. None of the content herein is investment advice and 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.