Chief Marketing Officer

…we roughly tripled the valuation of the business. The valuation was in the 20s of millions of dollars when I got there, and the business sold for about $70 million

Journalist Peter Clayton interviews Steve Panyko CEO of CML Emergency Services on working with Perry-Martel International Inc.

Peter Clayton:   Steven Panyko is the former CEO of CML Emergency Services based in Ottawa, Ontario, Canada. I wanted to talk with Steve about CML           and     his                experiences           with        Perry-Martel International, an executive search firm based in Ottawa.  Steve, thanks for speaking with us today.

Steven Panyko: My pleasure.

Peter Clayton: David Perry, the head headhunter of Perry-Martel  International  told  me  that  you  two didn’t  get  along  too  well  when  he  first  started  a search for CML for a V.P. of Marketing.

Steven: That’s actually a  very accurate statement. I’ve learned over the years, especially as CEO of a company, that you’ve got to be very careful who you let in your door. If somebody comes through the door and seems exceptionally confident in themselves, and comes across to me as a very polished salesperson, all  my  alarms  go  off.  That’s  how  David  initially struck me.   Couple that with the fact that I’d had some   bad   experience   with   some   of   the   larger executive search firms in the United States. It kind of got me off on a negative foot with him, but we straightened that out pretty quickly.

Peter Clayton: I guess so, or I wouldn’t be speaking with you!

Steven: What came out of that is that we sort of morphed from a  situation of outright conflict to a situation of animated dialog, to a situation of mutual respect, to what I consider today as a friendship; and that’s a nice thing to happen in business. That doesn’t happen all the time.

Peter Clayton: That’s for sure. How does David’s approach differ from the other recruiters you’ve worked with in the past?

Steven: You have to segregate that into two things. If David is doing a broad assignment – that is, if he’s doing placements of several people who constitute a team – his approach is absolutely unique.

The traditional H.R. practice is to take the work that needs to be done, and divide it into jobs and  job  descriptions that  fit  their  very convenient book of standard job descriptions, and fit their usual Hay Plan, or whatever it’s called, for compensation.

David’s view of the world is one which I wholeheartedly agree with. If I have a job to get done and I can do it with six people according to the H.R. model, or I can do it with four highly skilled people who  bring  other  very  relevant  experiences  to  the table, why not do it with four; and why not do it with four even if you have to pay them more than you planned on paying the initial six? In the aggregate, you’re  going to  pay them less  and  you  get  more impact on the organization.

What David will do is try and assess the skills that are required in the organization and the work that needs to be done. Then he will sit with you and help you structure that as a function of the types of candidates he’s seen.

If you put restrictions on him –  like you don’t want to pay relocation and that sort of thing – he’s very familiar with the Ottawa market and can very quickly save you money, save you time, and allow you to focus on the developing the right organizational model.

It’s a unique thing. I’ve not worked with any other search firm that does this. With most search firms, you come in, you hand them half a dozen job descriptions, and they say, “Uh-huh. Uh-huh. Okay. Let’s see. We’ll be charging you this much per one of those. By the way, we’ll give you a discount because there are six of them. What do you think of that?”

Peter Clayton: From my experience in working with David,  it  seems  that  he  really  tries  to   get  to understand your company and what your needs are, and  really  become  strategic  with  you  in  finding people who come to the organization and provide those things that you really, really need.

Steven: What we  had  was an opportunity to take some development work that was going on at CML

and develop a relationship with some partners that had some very high profiles.

As it turned out, I thought that would ultimately lead to an exit, either through a competitor of  the  individual that  we  partnered  with  or  being acquired by the partner themselves.

If you fast forward, we roughly tripled the valuation of the business. The valuation was in the

20s of millions of dollars when I got there, and the business sold for about $70 million.

The hope, when I joined the company, was that we would develop an exit and execute an exit strategy within three to five years. We did this in 14 months.

Peter     Clayton:     What     contributions     did     the individuals that David recruited for CML make to accelerating this exit?

Steven: They were absolutely pivotal, but I want to be very careful not to detract from the contributions of the existing management team. When I got there, what I found was a very, very mature head of R&D, a very mature CFO, and the team of individuals who were playing together very, very effectively.

What I did find was an absolute absence of marketing and an absolute absence of product management. Let me speak to what I mean by those terms, because those are probably the most abused terms that you’ll find.

Marketing, to me, is the creation of brand awareness, the creation and identification of demand, and the creation of image to face the marketplace. So, the degree to which your image is a professional image and the degree to which your company image is…. It’s like Johnson & Johnson, where they are clearly in the business of providing products that mothers use and that sort of thing.

We didn’t have the benefit of any formal branding effort. We didn’t have the benefit of having looked at how we were perceived in the marketplace for a long time, so we needed a marketing organization. We went looking for a V.P. of marketing, and we went looking for a head of product management. Those are two different roles.

Product     management    is     a     role     that formulates requirements, develops launch plans, and then manages in a matrix style the entire organization to execute against the plan to get new product to market. Ultimately, their success is determined and measured by contribution of both revenue and gross margin. From my point of view, they’re two separate practices, both of which tend to live in a marketing organization.

We wound up finding two marvelous candidates, and they just did a superb job; an absolutely superb job of both executing their responsibilities and  teaching the  organization what marketing and what product management were.

Peter Clayton: These were people who Dave had recruited for CML?

Steven: These were people who Dave helped us find. Dave knew my model for what marketing was and how it  was  going to  be  measured, and  knew  my model for what product management was.

Armed with a knowledge of what I was looking for, the knowledge that goes deeper in detail than what you would typically find on a brief job description, he was able to ascertain that these were the right people for the job; and he was absolutely right. To my joy, he found them in the Ottawa area.

Let me expound on this a bit, because others listening might find it useful. There was the emphasis on   strategy,   the   emphasis   on   market,   and   the emphasis  on  understanding what  we  had  that  our competition didn’t and what we had that our customers really wanted when they bought from us. It was in that context of where we are, where we’re going, and what we need to get there that he was able to work with me to refine those specifications.

There’s a funny process that goes on. I always tell people that the first time you sit down to write a job spec, it’s scary because you’ve not written this out before. When you look at it, you think, “Oh my God, does this exist?”

Usually, about ten minutes after you give it to the search firm, you say, “Oh, I forgot about these things!” You find things that are missing.

Then    what    happens    is     that    business conditions and organizations change, so this is a moving target. However, with a strategic context and an understanding of what we were trying to accomplish, that was enough to equip Dave to get the process going, and going on an expedited basis.

Peter Clayton: How long did it take him to do the search?

Steven: My recollection is a couple, two or three months.

Peter Clayton: That’s pretty quick to find the level of individuals that you needed with the skill sets that they had.

Steven: Especially given that everybody I talked to in Ottawa – other CEOs and other investors – said, “Oh, we don’t have any talent like that in Ottawa.”  I said, “Oh good.”   They were very wrong. They do have that talent in Ottawa. What’s happened is that folks they have here haven’t been properly engaged and empowered to get the job done. There hasn’t been an emphasis on marketing and an understanding that marketing leads the parade, not R&D.

Peter Clayton: Were you brought into CML to really build the company to a point where there was a good exit strategy for it?

Steven: Absolutely. In fact, I was told – I still remember this conversation because it was sort of a nose-to-nose conversation – by a lead investor, “You are not here to quick-turn or flip this thing. You’re here to build this thing.” I said, “Yes, sir. I’ll go do that.”                As  it  turns  out,  though,  by  doing  the appropriate thing to build it, we attracted the attention of a suitable buyer, and achieved in 14 months the kind of exit that they wanted in five years.

Peter Clayton: That’s really a terrific story. I guess if you were in a position where you needed to bring in an executive recruiter for an organization that you joined, you’d be calling David Perry.

Steven: Yeah; and if you’ll allow me, I would go

further than that.

Peter Clayton:   Okay.

Steven: He’s certainly someone I would use for executive-level positions.

However,     if     I     were     establishing     or rebuilding a function; if I were going to build a new sales team or I was going to build a new distribution strategy  using  third-party distribution,  or  if  I  was going to build a new marketing organization because I need to really come up with a fresh set of thoughts about strategy and how we looked at a marketplace, I would get him in early rather than late, and I would allow him  to  work with  the  management team to formulate what the jobs were that I required.

There’s  a  natural  distrust  on  the  part  of many people who’ll say, “They’ll try and develop the largest tab you could imagine.”

David doesn’t need that. David’s got a very successful firm. What he gets pleasure out of and what he enjoys doing is building success stories and building the kind of story that we had at CML. That’s often – as in the case of CML – not the most expensive solution, but rather the most carefully thought out solution.

I would advise folks to think about using him more broadly than executive search; but to actually help  formulate the  strategy to  rebuild the parts of the organization that they think need rebuilding or replacement.

This is very uncomfortable to the H.R. professionals  involved.  The  H.R.  professionals  all feel very threatened by this. They say, “Oh, an outsider who gets paid by the body.”        I wouldn’t recommend this for most people, but I do recommend this for Perry-Martel.

Peter Clayton: Great. Steve, thank you very much for your time today, and for the conversation. It’s been really great meeting you.

Candidate Perspective