Eight years ago, after a twenty-plus-year career at McKinsey & Co. as Senior Partner, our founder, John Livingston partnered with the team at RKNeal/Verve to help scale this mid-size industrial services firm into a leading industrial cybersecurity services and software company. We enabled the founder to gain liquidity but remain engaged financially and operationally in the company. Combining our founder’s experiences of enterprise sales, marketing, software businesses, and organization development with RKNeal/Verve’s deep understanding of industrial controls technology, the company grew dramatically.
The team increased the size of the company by 6X while shifting revenue from 95% one-time to ~75% recurring, increasing the value to the investors and the founder by ~20X. The business model changed from hourly billing towards what is now called “results-as-a-service”, combining deep industry expertise and software to deliver outcomes rather than inputs. The company built a development team of 50+ people focused on agile software development practices, carved-out a truly differentiated position in the cybersecurity market, created a digital marketing capability that grew from ~100 to ~40,000 unique visitors per month, and instituted a unique enterprise sales and customer success model to drive 100%+ net retention.
Although the financial and operational metrics are important, the ultimate objective was to create a foundation for each of the staff members to grow into leadership roles where they could achieve far more than if the company had remained independent. Instead of hiring a group of MBA’s or external leaders, Verve focused on the development of each of the team members promoting them and mentoring them in key aspects of the business. This leadership development was core to the mission of the company.
As the Verve founder was nearing his 60th birthday, the team agreed the time was right to find a new home for the company. They sold RKNeal/Verve to Rockwell Automation as the foundation of its industrial cybersecurity offering. This ensured that the leadership platform the company had built would have a chance to flourish, creating even more opportunities for the team as well as continual advancement for clients.
For the original founder, this delivered a 20X return on his roll-over capital due the transformation of the business operation. In addition, young leaders who remained with the company during this journey grew into senior leaders, developed new capabilities and skills, and created significant family wealth at exit.
We are proud of this value creation story, not just in capital appreciation and shared ownership, but in the extension of the legacy of the original founder and his original employees.
