Trends in Executive Employment Could You Be A Successful Interim Executive?

1. Trends in Executive EmploymentCould You Be A Successful Interim Executive? Peter Rugg Managing Partner Tatum Partners February 26, 2004

2. Small vs Entrepreneurial Growth CompaniesA Key Distinction Who’s Creating Jobs - Cognetics • Gazelles accounted for more than 90% of the growth in US job growth although they represent only about 4% of firms’ population. • Gazelle Size Manufacturing Companies grew 6 times as fast as large Manufacturing Companies. • Companies that began growth spurts with 100 or more employees ( only 2.7% of Gazelles) created well over half of the entire job growth indicated above.

3. Tatum Partners’ Survey Participation DemographicsFebruary 1, 2004 • In the past thirty days • business conditions –- • Improved for 42%of our respondents, • Got worse for 11%, • Stayed about the samefor 47%.

4. Tatum Partner’s Survey of Business Conditions Trends In the next sixty days, business conditions are expected -- • To improve for 65%; • To remain about the same for 29%; • To get worse for 6%.

5. No downturn for CEO/CFO/COO replacement positions Always great jobs for great people Not seeing growth jobs in mature companies 2003 was improved year for national search firms 2003 especially second half strong for Tatum Partners Tatum CFO leads/inquiries up sharply in last 60 days Executive Employment Update – National

6. Philadelphia lags national trends More opportunities in Mid Market - $10m-60m VC/PEG funding activity improving Early stage and technology improving Executive recruiting in these segments improving Weak management teams CEO/COO picking up CIO still slow CFO good in smaller companies and early stage Executive Employment Update - Local

7. Network, Network, Network Must meet all the job requirements or have a nice day! Be brutally honest in self assessment and match to position requirements Integrity is always in vogue Preparation for interviews The art of conversation vs email In transition vs employed being recruited – go extra mile If you won’t relocate, be prepared for sacrifices Chronological vs functional resume/customized approach Hardest thing you will ever do is get this job! Contact frequency for networking Recruiting Tips

8. Career management today is a dual trajectory Employment assignments Project assignments Opportunities in one leads to the other The death of career management - singular You take care of your company and it takes care of you Free agency In sports free agency works for the elite players In business it is largely the same. For truly great people it still works – not for all. The Tribeless Warrior – www.Wareham.org Dual Oscillating Career(s) – The Future of Careers

9. Most C levels today still desire to slide from last employment situation to next of same or greater opportunity For many this is not real Next opportunity via project assignments as interim exec’s or consultants Move from career management to career(s) management Project work and employment is the framework Dual Oscillating Career(s)

10. Fundamental question – career(s) management Career management – do I want to work for a company or be a consultant Career(s) management – will I make enough money in project work Consultants paid more than permanent employees Bureau of Labor Statistics data indicates fastest growing area of interim work is managerial/executive 98-2001 executive temporary positions grew 227% Tatum’s business model is thriving Adecco survey suggests 72% of people in temporary assignments find next full time jobs at same company Dual Oscillating Career(s)

11. Mastering the skills necessary for dual oscillation Affiliation needs Employment – team loyalty, valued member of winning team Project – affiliation is counterproductive. Independence/objectivity Know when you are done Talk about separating – gets you invited back! Mastery of content Employment – move from doing work to managing others Leaving behind technical mastery Project assignments may require technical skills Advice – stay sharp technically Dual Oscillating Career(s)

12. Relationship Management Employment – screened limited outside contact Project – Outside contact is life blood Successful dual oscillation requires lots of outside contact and networking First day on new employment assignment – have a outside lunch! Become a driven networker Keep the network warm Dual Oscillating Career(s)

13. Mastery of dual oscillating careers is the closest thing to job security most execs will know in the 21st Century From work by Laurence J. Stybel & Maryanne Peabody Dual Oscillating Career(s)

14. Understand affiliation needs differences – employment vs. project Keep both leadership/managerial and technical skills sharp Develop and maintain outside relationships – be a dedicated networker Build your network year after year, keep it warm Success in Dual Oscillation

15. First impressions are everything The honeymoon is over and never was Do your homework The industry Goals of company and senior management Organizational norms, culture, history Get a mandate – What is the homerun they are hoping you will hit. Learn your predecessors strategies and priorities What was working, what wasn’t New Assignments – Creating Impact and Fit

16. Develop good working relationships Failed new execs almost always have poor working relationships Usually poor relationships drive fatal poor performance not the reverse Effective relationships Begin with listening Reduce fear Build trust Meet with key stakeholders New Assignments – Con’t

17. Each subordinate one on one Learn what they think is expected Get feel for their skills, desires, and fears What will make us more successful Take notes – act interested In meetings Ask more that tell Share your background and goals Soft pedal your views – too early to be specific Know all are hungry to know where we are headed Being too closed mouthed fosters distrust New Assignments – Con’t

18. Tatum is the largest professional services firm in the US of Financial and Technology leadership executives in the US. We work through two separate firms, Tatum CFO Partners, LLP and Tatum CIO Partners, LLP What is Tatum CFO/CIO?

19. Largest national professional CFO and CIO firms 400+ highly experienced CFOs and CIOs All service providers are limited partners Typical partner profile: 25+ years of experience Practices in 30 U.S. cities Limited brick and mortar Growing rapidly... by 2004: -- Practices in 35 U.S. cities -- 400+ CFO partners -- 70+ CIO partners The Tatum Partnerships

20. Tatum CFO & CIO Growth = Tatum CFO = Tatum CIO CFO DateOfficesPartners 1/96 1 10 1/04 30 340 CIO DateOffices Partners 4/01 4 34 1/04 8 64

21. CFO Tenure is shortening The average CFO Tenure is now 28 Months CEO’s view their “job” as a project, average tenure is 24 months CIO Tenure is 22 months Dual Oscillating Career(s) Business Model Drivers

22. ‘Permanent’ Finance or Technology Executive – W-2 Interim or Part Time CFO or CIO – W-2 or 1099 Provide executive leadership to specific financial and / or technology management projects or service as a director. Three Service Models

23. Proven expertise is available immediately. The risks -- and fixed costs -- normally associated with the traditional hiring model are virtually eliminated. Contractual arrangements are highly flexible (interim or open-ended; full or part time, employed or contracted; etc.) and are typically cancelable with 30-days notice. Partner compensation can reflect unique circumstances. The full Intellectual Capital of the firm is available to any client. The Tatum Value Proposition

24. Over 80% of new business is from referrals Major referral sources: Accounting Firms Law Firms Private Equity Firms VC Firms Banks and other Lenders Investment Bankers Insurance brokers IT Vendors Other Trusted Advisors & Service Providers to CEO’s Marketing / Sales Channels

25. Over 150 recently completed or current private equity portfolio company assignments Koch Ventures Texas Pacific GE Capital Weiss, Peck and Greer Heritage Capital TriVest Capital Chase Capital Westar Capital Private Equity Firms – Demanding Buyers

26. 15 Partners presented by Retained Executive Search firms to their clients in a recent month Phoenix Partner placed by search firm as a Tatum Partner and Regional CFO of a $2.3 Billion revenue region in a $20 Billion public company – relocating to Dallas Retained Executive Search is becoming an important channel for Tatum Partners Retained Executive Search – Traditional Channel

27. Over 100 industries are represented. The size of business ranges from start-ups to major multi-national corporations. The major concentration of activity is in emerging growth and middle market sectors with recent success in Billion+$ companies. 20% of clients are venture capital funded 10% of clients are public companies. 60% of clients employ the partner permanently as CFO/CIO; 40% engage the partner on a project-specific basis. About Our Clients

28. The traditional hire CEO’s misunderstanding that we cost more Not a competitor: Retained Executive Search Tatum Partners are now presented as permanent employment candidates by large national Retained Search Firms Our Competition

29. Intellectual Capital Organization (CFO/CIO Brain Trust) Knowledge Experience Contacts Leveraged with technology (PartnerLink - Virtual Private Network) Current Trends Accumulate and Transfer Knowledge

30. Biotech Venture Capital Sources Bridge Financing – Fast Minimizing costs in M&A transactions Due Diligence on VCs-terms Managing Options within the Capital Structure Accounting Software Selection Sales Tax in E-Commerce Recent Examples of Intellectual Capital Exchange

31. Executive employment outlook is improving The positive change may not be visible in Philadelphia Look at your prospects for long term average compensation associated with career management vs career(s) management – Dual Oscillating Careers Follow recruiting tips Work very hard on your campaign in transition and keep your network warm when you are employed or doing project work Summary