PE’s Strategic Equilibrium: Navigating Quick Wins and Lasting Value

Nilesh: Welcome to another episode of Decoding Private Equity on the Zinnov Podcast. I’m Nilesh Thakker, President of Zinnov. This series explores Private Equity, their portfolio companies, strategies, challenges, and technology’s role in their growth.

Today, I’m excited to speak with Sunil Rajasekar, CEO of Billtrust, a leader in accounts receivable Automation. I’ve known Sunil for years. His career spans top companies like eBay, Intuit, MindBody, Oracle, and now Billtrust. Sunil has extensive experience in enterprise and consumer software, champions lifelong learning, and excels at building high-performing teams.

We’ll discuss his expertise in business, product, technology, and go-to-market strategy. We’ll also explore his insights on organizational transformation and how he’s scaled operations globally while fostering a dynamic team culture. Sunil, welcome to the show.

Sunil: Thanks, Nilesh, for that generous introduction. The respect is mutual, and we’ve indeed known each other for decades now. Whenever I’ve needed guidance on global strategy or location solutions, you’ve always been my go-to person. I’m thrilled to be here.

Nilesh: Thanks, Sunil. Let’s dive in. What do you see as the main reasons companies are pursuing Globalization strategies and accessing global tech talent? Based on your experience, what are the key drivers, and why should others consider this approach?

Sunil: It’s become expected now, even for start-ups. Companies are seeking the best global talent to execute their vision. A recent statistic shows that 3 out of 4 companies struggle to find talent, regardless of economic conditions. This has always been true for software engineers and now extends to data scientists and other functions.

The pandemic normalized remote work, challenging the belief that in-person collaboration is the only way. While there are benefits to being in-person, companies have realized they can succeed with distributed teams.

I recall Oracle pioneering global Centers of Excellence in the mid-to-late 90s. Now, every large company has multiple global locations. Even start-ups might have 10 people in 10 different countries. It’s fascinating to see this progression over the last 20-25 years.

Nilesh: Having worked with Sunil for years, I’ve seen how people in India who’ve worked with him are eager to do so again. He’s developed a leadership style that scales globally, proving you don’t need to be physically present to be an effective leader. Many still wish they could work for him again. As companies expand geographically, what are the main leadership challenges in unifying distributed teams and ensuring alignment? You’ve excelled at this, Sunil. Can you share your approach?

Sunil: Experience has taught me valuable lessons about managing global teams. Here are some key insights:

1. Treat global development centers as equals to domestic ones. Don’t relegate “grunt work” to overseas teams – that approach is outdated.

2. Provide quality, interesting work to global teams. They have choices too.

3. Aim for team autonomy. If daily communication is necessary, the structure needs improvement.

4. For R&D, ensure product architecture allows for independent work without constant consultation.

5. Define clear ownership and decision-making rights for each team.

6. Create self-sufficient teams with all necessary roles (e.g., both dev and QA in one location).

These lessons stem from past mistakes and evolving situations. There’s always more to learn, but these principles have proven effective in my experience.

Nilesh: You’re spot on. As I mentioned earlier, the leaders you’ve hired were very happy working with you. Are there specific leadership qualities you look for to make Globalization successful? Do you see any differences between local and global leaders, or how do you go about finding the right leaders for your teams?

Sunil: Absolutely, it’s all about the people. The leaders you put in place will determine success or failure. I’m just the coach on the sidelines. Here are some key characteristics I look for:

1. Ability to think end-to-end and prioritize company success over personal team size.

2. Strong functional skills with a global perspective.

3. Operational awareness of global considerations (e.g., scheduling meetings at convenient times for all).

4. A truly global mindset with respect for cultural differences.

5. Coaching mentality and acceptance of diversity.

6. Understanding of both global and local culture, recognizing that one size doesn’t fit all.
7. Ability to not just accept, but celebrate and recognize cultural differences.

These are some of the crucial factors I consider when selecting global leaders.

Nilesh: When leading remotely, how do you view the ability to influence leaders globally and manage upwards to instill the right mindset? Is having a globally influential leader a requirement? Without this global influence, a remote location might struggle to effectively leverage its global teams. What are your thoughts on this?

Sunil: In terms of global sites, execution is crucial because results are the ultimate proof. However, influence skills are just as important. You need to clearly articulate your vision and plans, as initially, some faith will be required. The expectation isn’t that a new global center will operate at peak capacity from day one, like an established site. It’s vital to have strong communication and influence skills to get buy-in for the vision and plans, followed by solid execution. Otherwise, it’s just storytelling, and that won’t lead anywhere.

Nilesh: That leads to my next question. Private Equity companies and investors focus heavily on operating metrics. Given that, how can leaders balance the need to invest in long-term global capabilities while also addressing short-term demands? You’ve worked with several private equity companies; how have you managed this, and how do you apply that mindset globally?

Sunil: One key difference between Private Equity, VC-backed companies, and public companies lies in their time horizons and focus areas. VC-backed companies typically plan with a 10+ year horizon, aiming for transformative, world-changing outcomes. This long-term perspective allows them to make bold, strategic bets. Public companies, in contrast, often prioritize short-term results, focusing on quarterly performance. Some manage to balance both long-term and short-term goals, but the pressure is generally on immediate results.

Private equity firms occupy a middle ground, usually planning over a four to five-year period. The best private equity firms, like EQT, where I currently work, emphasize both short-term gains and long-term future-proofing. They focus sharply on executing three to four key priorities during their investment period. These might include achieving operational excellence, expanding into new markets, or implementing a new product strategy.

A strong emphasis is placed on metrics and execution, ensuring that progress is measurable and adjustments can be made as needed. This clarity in priorities and metrics is crucial, as it helps guide decision-making and maintain focus. Leaders in these firms need to have a strong orientation toward execution and a deep understanding of the importance of clear, measurable goals. Without this focus, strategies remain just stories without actionable outcomes.

Nilesh: You mentioned cultural differences, with global and local cultures sometimes varying significantly. As you expand into new regions, have you implemented any strategies to bridge these cultural gaps? Given that what you say and what is understood can differ, is this something you typically worry about, or is it now so common that it’s not a major concern? How do you handle these challenges to ensure clear communication and smooth operations?

Sunil: It’s definitely a big deal. When we talk about diversity, it includes many aspects like educational background, where you grew up, or hobbies. Working with people from another country adds another layer. We’re not at a point where these differences are fully normalized. At Billtrust, about six months ago, we brought in a coach to work with our leadership team on understanding these differences. The coach led us through exercises on stereotypes and cultural sensitivities, highlighting how normal behaviors in one culture can be abrasive in another. It was eye-opening and emphasized the importance of curiosity and humility when interacting with people from different backgrounds. It reminded us that we need to be open and curious, rather than assuming we know everything.

Nilesh: Thank you, Sunil, for sharing your insights. To summarize, treat your global teams with the same respect as your local teams; they should handle the same type of work, not just grunt tasks. Focus on execution and be aware of cultural differences, accepting and dealing with them rather than taking them for granted. Leaders who are globally savvy, influential, and focused on execution are essential for bridging these gaps. Thanks again, Sunil, for your valuable perspectives.