Five Questions With: Richard Lenny, Friedman Fleischer & Lowe

1. You recently joined Friedman Fleischer & Lowe, which has $2.5 billion under management, as an operating partner, having previously been a chief executive at Hershey. This is your first role in private equity. What drew you to the industry?

The attraction was the opportunity to get in and work in middle-market companies where you can have an immediate impact and really improve their operating performance. Equally important was the opportunity to work with FFL, which was founded to bring large company operating skills to middle-market companies. FFL was one of the first firms to have operating partners, so that’s a perfect opportunity for me because my role has always been to build and leverage a company’s competitive advantages.

2. You’ve worked at some pretty large companies like Hershey, Pillsbury, Nabisco and Kraft. Aren’t you going to find the middle market a bit anti-climatic?

No, quite the contrary. What I was able to learn at those four companies were things about what it takes to win in the marketplace in terms of delivering superior value to consumers and customers. So, to think of it broadly, it could be brand-building, restructuring the cost basis or developing superior organizational capabilities. All those skills will work very well in the middle market.

3. Where is FFL looking for opportunities?

We see a lot of very good opportunities within the U.S. market. There are some high-growth categories that we feel are potentially very attractive, whether it be health and wellness, confectionary, the snack business—sweet or salty. There are also some center-of-the-store categories, such as packaged dinners, salad products, sauces and perhaps cereals, which are highly profitable to retailers, but that might not fit into the strategic framework of what a large, multinational strategic buyer might pursue. So, there could be potential carve-out opportunities.

4. Are you going to give FFL’s portfolio companies a lot of room to do their thing, or are you going to be forceful in changing the ways they do business?

It’s important to get the right management in place, because it’s the management that’s going to deliver the value. This is less about control and much more about enabling and empowering the operating companies to deliver on their strategic game plan.

5. What’s something we should learn about you that we wouldn’t know to ask?

Well, my first job was scooping ice cream at Baskin Robbins, but I don’t think that’s too interesting. Actually, one thing I’m proud of is running the Kraft sales force in the early 1990s. Most people would say, “Why would you want to do that?” But for me, that gave me a great insight into what it takes to win at retail. Having empathy for the things that a sales person is going through on the ground, I think that’s something that is often missing from the experiences of people with traditional marketing backgrounds.