SEARCHFUNDER INTERVIEW OF CHRIS HENDRIKSEN – PART II 

We spoke with Chris Hendriksen, who acquired VRI with his partner Andy Schoonover in October###-###-#### In this Part II, Chris discusses the lessons learned during their transition phase. He also provides cogent advice for searchers acquiring today.


How did the customer transition work? Was it a dog & pony with the seller over time? 

We have a bunch of different customer types. A lot of our customers are healthcare and payer organizations. For most of them, the acquisition wasn’t really news. For them, the messaging was: “We are still VRI. We are still doing all the great things we were doing before.” This was not a high level strategic customer selling relationship. And, it was less about leadership change since the seller was staying around. On the B2B selling side, we reached out to the top 10 or 20 customers. We had conversations with them. We told them what was happening; the seller was staying; we were excited to grow the business; and that we wanted to meet them. Luckily, we didn’t have hardly any customer concentration. So, we were less concerned about losing any single customer. Thus, we probably were atypical in the amount of time we spent on the customer transition. 


A few search-CEOs have mentioned that they regretted not having an advisor familiar with their industry. Besides the seller, did you have a separate advisor who understood your industry?

I think that’s a great point. Yes, it is very helpful to have someone who understands the industry. We had the seller. We had a board member who was in healthcare; he had some overlap with our customer base. So, he thought a lot like our customers, which was very helpful. I think advisors can help, but you also have to learn the industry on your own anyway.

We had a lot of meetings where I was writing down acronyms trying to figure out what people were talking about when they were using industry lingo and abbreviations. You learn it on the fly and depend on people in the company to help you figure it out.   

Once we were in the business, we did join some industry groups, which helped. The groups helped accelerate our learning, simply due to our spending more time with people within our industry.  


Can you talk about making cultural changes, especially in light of your seller staying on for 4 years? 

The seller sticking around for 4 years was very unique. The extended duration was because he was great to work with and he was willing to step in as advisor, partner and coach. He set us up to be successful in that way. He didn’t create a lot of problems. If he disagreed, he disagreed privately versus publicly. He did not need a lot recognition, status or ego fulfillment. Folks ask, “How did you do that?” It wasn’t really us. We were fortunate that it worked out that way.

We had a really good culture when we joined. People often focus on “Do you want to change the culture? Do something different?” We wanted to build on what was already there. The business’ values were around focusing on caring for people. The company already had a reputation for great service and willingness to do whatever it takes to take care of the client. We wanted to build on those two things.  

I’ll share with you two things we did to build on it and one thing that was a surprise, sort of wake-up call for a 29-year-old running a business.  

We did formalize it. Around a year in, we did spend some time doing the mission, vision and values. We had a retreat to codify “Who we are ” and “What we want to do.” In essence, “What can we say over and over again about ourselves in our messaging and recruiting?” In the hiring and recruiting, it ended up being very powerful and valuable. We’re unapologetic about our values, what we care about, and what we do. For some people, that is not a fit. It attracts the folks who wants to be here and creates that culture. As you grow from 40 to 400 people, the culture needs to be systemic and part of how you hire, fire and train. It has changed a little over time, but the core elements we codified are still there.  

The second significant change was a little harder to accomplish, but it was probably typical of a search fund acquisition. As a small business, there was not quite the same level of focus on performance (reaching goals, setting goals, and consequences for not setting and reaching goals). We had to shift the focus toward a meritocracy from a seniority based culture. People get promoted, get raises, and get let go because of their performance, not because they’ve been with the company for a long time, not because they are related to someone, etc. Overall, doing that shift went fine.   

On another note, I realized fairly quickly another surprising difference in being the boss of a small business. I’d come from all these organizations that had a collegial atmosphere where everyone hangs out together. You spend time after work together. I was accustomed to the environments where work was everywhere. Going to this small business was a shift for two reasons. First, people have families and a lot of stuff to do. A lot of employees who do a great job work certain shifts, but have families and other priorities. So, they are not looking to spend time with each other after work. Two, I was the boss now. I couldn’t do the same things and go to the same places that I could as a peer or a member of the team. I remember a Friday night pretty early on, where a couple of the teams invited Andy and I out to hang out. We had dinner and a couple drinks. It came to the point during the night where we realized that this wasn’t where we should be. We don’t want to see what happens next. So, we need to go. It was a nice wake-up call for us that we can’t build culture around social events. We would have to be more intentional and build it within the 4 walls of the company.  


You’ve given so much great information. If you had to give advice to a new CEO today, say, someone who bought their company last week, what would it be?


  1. 1) Be authentic. People see through anything you make up. If you try to act like a CEO, it will feel like you are acting. Tell people what you think and what you are about. You will gain a lot of credibility and people will see you as the leader as you are. “Be authentic” is the first big one.
  2. 2) Go slow. You don’t have to fix the business. You bought it because it’s a good business. There is a learning period. Set yourself a timeline -- whether it is 90 days, 6 months or a year. Really internalize that you’re in learning mode. Your first job is to get better at this business and smarter about running it, not to change, grow or fix this business dramatically. It is hard thing to do as a Type A achiever personality. All the value and the growth comes later. There is so much opportunity once you know what you are doing, especially if you haven’t taken off in all the wrong directions right away. 
  3. 3) Think long term. As you make decisions keep the end in mind. You might want to grow the business forever, sell it or exit it as some point. Thinking about the goal in 5 or 10 years and working backwards got us to a better place than just viewing it from the perspective of where we are now and doing the next best thing. This approach fits well with the “Go Slow” advice. Andy and I set some goals early on about what we wanted to achieve at a high level. When we reviewed them much later, we actually had hit those goals. This outcome sprang less from asking ourselves “Where are we going tomorrow?” and more because we asked ourselves, “Where do we want to be way out in the future?” and then working back to smaller steps.   

If you can be authentic, go slow and think long term, it slows things down and then your hard work, smarts, and good business takes over, resulting in good things happening.  

Thank you.


 Summary of Insights

  • Here are our a few of the key takeaways from our discussion with Chris: 

  • • Consider honing your people skills now because you may need to heavily rely upon them in running your company.
  • • “Be authentic. Go slow. Think long term.” Understanding that you’re in the business for the long haul will allow you to avoid the pitfall of expending your energies too early in the transition in pursuing fruitless directions.
  • • As you consider the transition, build in a financial cushion for unanticipated investments in people or systems to help spur future growth.
  • • During the transition, employees are looking for certainty and specifics. It’s not just what you say to the employees, but what they might hear or presume from your language.
  • • Rely on industry experience when you can.