How to Hire a CEO Without Losing Your Company

To read a transcript of this episode, click here.

When we discover a vaccine or reliable treatment regime for COVID-19, there will inevitably be an unscrupulous gang of counterfeiters trying to make a quick buck by selling fake remedies.

Systech International could provide a defence against these crooked operators. Systech has developed technology that allows drug makers to create a unique bar code for each of their products, which stops counterfeiters from ripping them off. The technology is used by drug manufacturers and just about any company that needs to ensure its packaged products are safe and authentic.

In March of 2018, Ara Ohanian was brought into Systech as the CEO and tasked with creating some liquidity for its shareholders, which he did in January 2020, when Dover Corporation (NYSE: DOV) acquired them.

Ohanian described two big strategic moves he made, which should be in every value builder’s playbook:

1. Build a moat: upon joining Systech, Ohanian realized their point of differentiation had been melting away as the company focused its sales and marketing on how they helped drug makers serialize their bar codes. A lot of companies offer serialization, but very few have the digital anti-counterfeiting technology that Systech had developed. Ohanian realized customers bought from Systech because they helped ensure their products were Authentic, Safe and Connected. He mobilized the company away from talking about serialization and focused on using the acronym ASC in its marketing, which provided a more compelling competitive advantage.
2. Find new markets: Systech got its start with pharmaceutical companies, but Ohanian realized that any company that dealt with counterfeiters could benefit from their proprietary technology. That insight led him to Markem-Imaje, a product label printer owned by Dover, his ultimate acquirer. By going after new growth markets, distribution channels and partnerships, Ohanian juiced the sales of Systech, but he also found a strategic partner that turned into an acquirer.

There are lots of gems in this interview, including:

• How to hire a CEO for your company.
• Why your CEO’s severance plan should be the opposite of a rank and file employee.
• How to minimize strife between a founder and hired gun CEO.
• A surprisingly simple analogy for a successful exit strategy.
• The most important thing your M&A advisor does in representing you in a transaction.
• How your valuation varies by product and service line.
• Valuation benchmarks for hardware, software, consulting, licensing, maintenance and more.
• The one personality trait which is Ohanian’s superpower.

One of the first things Ohanian did when he took over Systech was to identify new growth markets for his technology, which led him to Dover. If you’re curious to find new markets for your existing products and services, we’ll take you through Your Growth Quad exercise in Module 4 of The Value Builder System™. Get started now by completing module 1 for free. 

Check out our full M&A Glossary

About Our Guest

Ara is a Seasoned B2B enterprise CEO and entrepreneur who has run software businesses from startups to $300M in revenue. His successful exits include selling Certpoint Systems to Infor, a $4B ERP player; and most recently the sale of Systech International to Dover Corp, a $9B public company. Ara ‘s tenure also includes 4 years as SVP and GM of Infor’s statutory compliance business. His expertise spans building global operations, developing multi-industry distribution channels and delivering robust growth and profitability. In addition to running companies, Ara teaches as an Adjunct Professor at City University of NY, and as the entrepreneur-in-residence at NY Institute of Technology’s center for entrepreneurship.