One of the first things Riverside Insights CFO Graham Ballbach did after putting his finance and accounting team in place this year was take a fresh look at metrics at the 40-year-old education assessment company. One finding jumped out at him: the company's outside sales team was spending most of its time renewing product orders and servicing the company's existing 20,000 customers rather than making new deals.

"We looked at our sales model and the number of customers we have around the country," Ballbach said in a CFO Thought Leader podcast released last week. "We looked at the run rate, renewals, retention, and, in partnership with our new head of sales, we did a deeper dive into what kind of time is spent by our sales force. We concluded there's just no possible way they could be serving the 20,000-plus customers we have in an efficient manner."

Ballbach stepped in as CFO a year ago after private equity firm Alpine Investments bought the company as a carve-out from publishing giant Houghton Mifflin Harcourt (HMH). He said his review of the sales metrics made it clear it was the company's legacy structure from its days as a print publishing operation that hindered the ability of the sales team to generate new business.

"So, we're reinventing our go-to-market strategy," he said. "We're investing in tech enablement for our sales folks so they are freed up to ... sell and obtain new logos with more strategic, longer-term sales cycles."

The company will also invest in more new-media marketing efforts like podcasts. "Given the long, disparate array of long-tail customers that do relatively small deals with our company, we suspect we can invest in digital marketing that will return a very high ROI," he said.

People-focused training

Ballbach was offered the CFO job by Alpine after going through the equity firm's CEO-in-training program. When he assumed the role, the company had sales, research and product development teams in place but no finance, accounting, legal or human resources teams. Those were being handled as part of a shared services operation within HMH, but that would phase out over time.

Ballbach said his first goal was to build his own finance and accounting team, starting with a controller to help him stand up a new accounting and reporting infrastructure and staff it with accountants and other finance professionals.

"I was very diligent about the interviewing process for the controller, using the top grading method, which is meant to be an immersive experience into understanding someone's technical abilities but, more importantly, their emotional intelligence," Ballbach said.

With the new controller and other team members in place, the accounting and reporting infrastructure went live a few weeks ago, on Oracle NetSuite. The company is now running its own process.

Ballbach said the main attraction of Riverside to Alpine Investments was its 20,000-strong customer base, composed mainly of school districts that use the company's battery of aptitude tests and tests that identify students for gifted and talented programs.

"Alpine saw a good alignment between their strategy in investing and what was existing in this asset buried within the multibillion-dollar organization of HMH," he said. "They saw a business that was, and still is, highly profitable but that had been overlooked for many years, given that it was a non-core asset."

Transition to SaaS operation

Going forward, the company intends to move from its legacy print-publishing orientation to more of an online SaaS model. "It's about digital transformation, bringing the core research-backed intellectual property into the digital world," he said. "We're in the middle innings of accomplishing that."

Ballbach said he's closely tracking customer acquisition costs, lifetime value of customers, retention and churn to stay on top of the company's performance.

But he also looks at the company's employee net promoter score, which measures how enthusiastic employees are about their company and the products it sells.

"Alpine is a talent-focused private equity firm and, for decades, has been tracking this metric," he said. "And they've enforced their portfolio companies to also track it.

"What they found is that, high employee net promoter score correlates to stronger financial returns," he added. "So, we completely agree on the methodology in making sure our employee base is engaged and rowing in the same direction. We believe what Alpine has seen over the years will play out here as well as we invest in our people."

Alpine's investment in him is a case in point. His background was in business consulting at Deloitte, not accounting, before he joined Alpine. With Alpine's CEO training program under his belt, the company gave him the opportunity to build his own finance team even while wearing the CFO hat for the first time.

"Alpine likes to inject [people] into businesses in the middle market that had a lack of management attention," he said. "In a carve-out like Riverside, where there's no true leadership in its vertical, [you can] place an executive team that can drive the business forward.

"I really do care about people, elevating talent within an organization to achieve large and scary goals, and externally too — caring about customers we serve," he added.