The Anti-IPO: Tips for Taking a Public Company Private

In 2007, CFO Mark Julien helped Kronos become a private enterprise again. Here’s what he learned.

By J.R. Ball

Those who follow collegiate football with any degree of interest likely know the name Knute Rockne. A Norwegian immigrant who first arrived in the U.S. at age five, he is “without question, American football’s most renowned coach,” according to the College Football Hall of Fame.

But even the grandeur of Rockne’s many accomplishments—four national championships and popularization of the forward pass—could not have been achieved squarely on his Nordic shoulders alone.

“The secret is to work less as individuals and more as a team,” Rockne once surmised. “As a coach, I play not my 11 best, but my best 11.”

Rockne’s philosophy, well demonstrated during the golden era of Notre Dame football, has survived the decades by way of historical osmosis. The belief in the greater good is palpable for those who pay their alumni dues to the renowned private college, including class of 1986 graduate Mark Julien.

“I’ve always been a big believer in the team approach,” Julien said. “I’ve never expected those on my team to have all the answers. It’s more important to believe in yourself, have confidence in your peers, and be excited and engaged about the opportunity at hand.”

As Chief Financial Officer (CFO) at Kronos, a workforce management software company of 3,500 employees based outside Boston, Julien leads the Finance Team through a myriad of operational goals, including but not limited to accounting, financial planning, analysis and administrative operations.

Varsity Moves

Julien, who began his career as a Certified Public Accountant with global consulting and financial advisory firm Ernst & Young, joined Kronos as Assistant Controller in 1996.

“Public accounting had given me great visibility into other businesses, especially high-tech companies, and I felt very comfortable in that space,” Julien noted. “The fact that Kronos was a public company with a great reputation for its corporate culture played a large part in that decision.”

In 2006, Julien’s own contributions to supporting the organization were recognized, as he assumed the CFO role. Coincidentally, a year later one of the pillars that first attracted Julien to Kronos—its visibility as a publicly traded company—would be radically upended.

Back to the Drawing Board

For 15 years—from 1992 until 2007—Kronos had been publicly held and traded on the NASDAQ. In 2007, Kronos’ Executive Board, in an effort to take greater control of the company’s long-term viability, began the seemingly insurmountable task of taking the company private.

It proved to be dramatic transition by all accounts—one that Julien said “turned the finance organization on its ear.” It also presented an opportunity for Julien to step to the line and play a key role in negotiating the sale of Kronos to the private-equity firm Hellman & Friedman for $1.8 billion.

“From a financial perspective, we approached the decision to go private as a collective effort,” Julien said. “I never felt it was all on my shoulders as CFO. Maybe it all goes back to the corporate culture. It’s all about the team—all about helping and supporting each other, from the top down.”

The transition, according to Julien, was needed to shift the company’s focus from, ‘”What’s happening over the next quarter?” to a bigger-picture strategy of, “What’s happening over the next two to three years?” On a granular level, it meant changing the way the company measured its performance metrics—a move squarely in Julien’s wheelhouse.

“I thought we had reporting figured out because from a finance perspective everything was done to satisfy SEC filings,” Julien said. “But that was nothing compared to the operational reporting that we do now. By using our own dashboards, we get an apples-to-apples comparison of what is happening to our business.”

Despite the reduced scrutiny from the SEC, Julien insisted that the shift not result in a loss of operational integrity.

“As a private company, it was important that we maintained the control environment of a public one,” Julien noted. “Even though we went private, our accounting rules had to stay the same.”

Building a Dynasty

With the changeover some six years in the history books, Julien’s focus has not only been on the organization’s continued fiscal performance, but also ensuring that his team is comprised of future leaders who are more than adequately prepared for success.

“We don’t have a dedicated finance group focused on acquisitions,” Julien said. “This creates a great opportunity to develop our people by allowing them to move from one track of diligence to another, thus enabling them to learn all aspects of the business.”

And, as many a qualified C-suite leader—or coach—will echo, the greatest strengths inside an organization often reside under the umbrella of what is often referred to as human capital.

“It’s important to give people the resources to get to where they want to go,” Julian said. “[An environment] where teammates can count on their senior leaders and their peers. That belief permeates our entire organization.”

… A solid game strategy both on the field and in the financial sector. Gold helmet optional.