When digital marketing and sales company Centerfield Media was founded in 2011, its leadership team had some big goals.
“We have always had ambitions to reach a $1 billion dollar valuation,” said Gary Pak, COO at Centerfield. “That was always in the back of our minds.”
Centerfield operated as a bootstrapped company until 2015 when it received its first round of funding from a private equity partner, HIG Capital. The funding gave Centerfield the capability to fast track day-to-day operational growth and brought in capital partners who could help the company prioritize major acquisitions.
In early 2017, Centerfield was able to raise an additional $156 million, which gave the company the ability to make a number of strategic acquisitions, including Qology Direct, a telesales company based in Florida. The acquisitions expanded the service offering of Centerfield as an end-to-end marketing and sales solution provider.
Though Centerfield leadership saw the company skyrocket in just a few years’ time, the hockey-stick growth wasn’t without its challenges, Pak says.
“We spent the better part of 18 months really synergizing and transitioning the company and merging the companies together,” Pak recalled. “But it took a ton of effort for the challenges in between.”
In a recent interview with Built In, Pak recalls some of the lessons the leadership team recalled as they scaled the company and the advice he has for others going through similar growth.
Those lessons seemed to have paid off: In January, Centerfield was acquired by Los Angeles-based Platinum Equity.
‘Maintain company culture’
Centerfield, a digital marketing company in Los Angeles, and Qology, a South Florida-based call center company, would understandably have two very different cultures. Bringing the two together required careful planning and intentional decision-making from Centerfield’s executives, Pak said.
Gary Pak, CTO: Our culture is very data-driven and tech-enabled and Qology, which had great people, wasn’t as accustomed to the data-driven approach and technology-enabled approach that we really valued as an organization. So, that was met with some resistance early on, but eventually, we were able to navigate through those issues and really merge the two companies together in the right way.
We didn’t go into the merger and acquisition with a defined playbook in terms of post-transaction activities, and that was probably a mistake on our end. We’ve acquired several companies since then and that was definitely a lesson for us in regards to ensuring that we planned the transition a lot more thoroughly.
It’s important that you have all your ducks in a row so that once the acquisition is closed and completed, you could really hit the ground running in regards to how you wanted to merge the two companies together.
‘Top-down organizational goal setting’
Key performance indicators (KPIs) are one of the most common metrics used to measure workplace performance.
In the case of Centerfield, Pak says measuring KPIs — and making sure they’re applied from top-to-bottom — was an important part of the company’s growth journey, especially following several acquisitions the company made.
Pak: As you follow Centerfield’s path of growth, we inherited and acquired our way into a large call center operation, and there are certain KPIs that you measure in order to successfully run that type of business. One of the first things that we instilled in those companies is that they need to take a very similar approach in regards to how they access, view and analyze data in order to further support their operations.
We need to take measures in order to ensure goals trickle down to the individual contributor level.”
It starts at the top level where the company has certain KPIs that we analyze to better understand the health of the business. But that needs to be cascaded down to every individual in a quantifiable manner. That permeates throughout the entire organization, whether you’re a media buyer that sits in the LA office or your call center agent that’s answering phone calls.
One thing that I would suggest is top-down organizational goal setting. As an executive team, we fully understand what our target revenue and growth objectives are, but we need to take measures in order to ensure goals trickle down to the individual contributor level within the organization, which would include the call center employees.
Closing a round of funding — especially one for $156 million — is certainly cause for celebration. But as the old saying goes, don’t go spending it all in one place.
Pak recommends being more mindful and sticking to a budget so that the capital is being spent in the most effective ways.
Pak: Be very budget-conscious. It’s really easy to spend capital once you secure a large round of funding. But we’ve run into instances where we’ve overspent and run into budget constraints. Being very budget focused, communicative and pragmatic around where you want to invest that capital is really important.
The number one thing that we’ve seen once there’s a large capital infusion is that people want to hire with open budgets. As you grow with this company, you need more support. But you have to toe the line and be very careful about overhiring.
Be very budget-conscious. It’s really easy to spend capital once you secure a large round of funding.”
People are expensive, especially in today’s market. It’s easy to overspend a couple of million dollars on an annualized basis with a headcount that you actually don’t need to run the business.
According to employee engagement platform TINYpulse, 61 percent of employees say that trust in senior management is an important part of their job satisfaction. “Providing a clear vision and clear focus is instrumental to the success of companies as they continue to grow,” Pak said.
For Centerfield, there were some key moments where it became clear that more could be done to keep everyone informed of the company’s direction.
Pak: Transparency across the organization was key to helping mitigate some of the early issues that we faced in terms of setting the right tone for the organization. We did a pretty good job of that with our corporate employees through all-hands newsletters and regular updates.
Early on, though, we didn’t extend that to the call center, so there was a little bit of disconnect in regards to how they operated and aligned with the overall company vision. Then we put tactics in place specifically to provide greater transparency.