654: The Path to Being IPO-Ready | Drew Vollero, CFO, Allied Universal

Of course, whatever buzz Vollero’s hiring may have stirred, Snap left little room for IPO skeptics, having earlier in 2015 hired Imran Khan, head of Internet investment banking at Credit Suisse, where he had recently led the IPO for Chinese e-commerce giant Alibaba.

“Whenever we walked into a room together—on the road show or wherever—there were seven or eight people who knew Imran,” explains Vollero, who characterizes his pairing with Khan as “a one, two punch.”

“The founders knew that I had experience in building world-class teams, and they knew that I could hit the ground running,” comments Vollero, who adds that “the match really made sense” in light of the tight time frame involved in Snap’s plans to go public.

During the 18 months in the lead-up to the IPO, Vollero initially committed to a 70-mile commute to Snap’s Venice, Calif., headquarters from his home of 30 years in Orange County—a daily trek that became more daunting as IPO action items began pressing down.     

Says Vollero: “I got an apartment up in Los Angeles, and I was there Sunday through Friday, moving the things that we had to get done.”

These days, Vollero has been working closer to home while occupying the CFO office at Allied Universal of Santa Ana, Calif.  Despite his shorter commute, Vollero says, his days are once again becoming populated with IPO action items, as the $8 billion privately held supplier of security and facilities begins eyeing the public markets.  

Comments the CFO and now IPO veteran: “We’re a founder-led company, just as Snap was founder-led—these companies tend to take on the personalities of the founder, and they drive hard.”  –Jack Sweeney

Again, we haven’t put a time frame around it, but I think that we want to be in a place where we have the right controls profile and we have the right forecasting process—where we have the right ability to close our books confidently, accurately, and in a SOX-consistent way. We’re starting to work on that.

The team has done a really good job on a number of controls. I think that the lift will be a lot easier than it was at Snap, but overall this is something that we think about from a process perspective. I’d also like us to potentially migrate to a total shareholder value approach for managing enterprise value creation. That’s an interesting dynamic. It really makes sense for benchmarking and allows us to sort of equate a stock price to business levers that you manage, like cash flow and EBIT growth. But overall, sort of an enterprise-wide way of thinking about financial management, like total shareholder returns, I think makes sense. Again, this is with managing our business for cash and profitability. I think that these things will dovetail well.

From a people perspective, I think that we do a great job from a business perspective. I think that we need to build capabilities around audit and controls. Today, we don’t have an internal audit function. Again, we’re a private company. We don’t need that. I do think that we’re going to need this over time. Getting the right financial controls, the right financial processes, vendor audits, a number of things that I think that a good internal audit function can do—I think that we would benefit from some of these capabilities here.

From a systems perspective, it’s accounts receivable. Today, this is a lot of hand-to-hand combat and Excel spreadsheets. In the medium term, this probably looks like more of an enterprise system to keep account data—both qualitative in terms of feedback from the operators and also the numbers themselves. In the medium term also is our business scale, particularly globally. We use WinTeam today as an ERP. Will WinTeam be a global solution for us? I think that we’ll have to see. But if our business becomes much bigger globally, I think that we’d have to potentially look at an ERP system. Anyway, this is how I think about the next 12 to 24 months from a process, people, and systems perspective.

Value Quote: We hire 3,000 people a week. We see a million resumes a year here at Allied Universal. There are 150 million or so people employed in this country, so this is a meaningful number of resumes that this company sees. Our ability to hire the right people is really very important, and our challenge is how to do it at scale. jb