The Rock Star Boss: A Conversation With Lynn Tilton

by Shonali Burke on May 19, 2010

Strong personalities inspire strong feelings, and Patriarch Partners, LLC, CEO and sole principal Lynn Tilton is no exception. Whatever you might think about her boots (which I think are hawt), you’ve got to give props to this rock star businesswoman. Which is why I’m VERY psyched she took time out of her busy schedule to do a Q&A for Women Grow Business.

Patriarch is a distressed private equity firm managing $7 billion in assets and a portfolio of over 70 companies that range from helicopters to cosmetics. An advocate and a voice for small and middle-market enterprises, Lynn is well known for her modern-day industrialist efforts to rebuild America one company at a time, one job at a time. Connect with her on Twitter or Facebook.

What decisions have best enabled your company to endure the current economy and excel?

The current economy has caused devastation in the realm of small and mid-sized businesses.  Our ability to survive, and in some instances, flourish lies in the preparation for economic events I believed would take place, but which I hoped would not.

In order to support middle market companies through the perfect storm of economic destruction we knew we would need our own operational teams and senior industry expertise, an ability to finance without outside banks, rapid movement towards rationalization of expense structures and the strength to recapture lost revenues through acquisitions.

The power to execute on these requisites has allowed us to march forward against the odds of the economic downturn.

[Ed: Listen to NPR's podcast with Lynn, "a private-equity boss in four-inch stilettos"]

What most influenced you to launch your business?

When I founded Patriarch it was with the clear intention of using my talents and experience to provide solutions to problems plaguing America’s financial system and corporate America.  My parents raised us to “give back,” and finally after so many years when survival was the noblest of my causes, I was in a position to try to help others.

Rapidly, I realized that the best way to do this would be to save and rebuild companies in which others had lost hope thereby adding value and saving jobs.

What key strategic and operational tactics helped your business first get started?

I think passion and perseverance are at the foundation of the build or rebuild of any successful venture.  I truly believed in the validity of the journey and the business I would build.  The certainty of ultimate success and the depth of the cause gave me the strength and the courage of conviction to fight forward even when it seemed that I might not succeed.

Patriarch’s first “bad bank” transactions were built upon a financial model which I invented and for which I have a US patent.  This innovation, I believe, provided me an opportunity to build a business in a very competitive space that use of a financial model more common might not have allowed.

What  failure or missed benchmark proved a good business lesson, and why?

We learned early on that we lost very little money on credit or businesses themselves, but that we often lost money in the battle with other lenders or owners with whom we could not find common vision, ground or agreement.

These battles led to premature sales, liquidations and the evolution into a business model where we both lend to and own our portfolio companies.

We rarely use any outside lenders or have partners. The absence of constituency conflict has allowed us to keep companies alive through downturns and mistakes and later witness these companies flourish and build great value.  Under a distinct model, many would not have survived as other lenders or equity holders might have lost faith in their futures or chosen not to fund into downturns leaving us no choice but to follow their directives.

How do you use social media for your business?

It is only in the last 18 months that I have come up from below the radar screen to speak to, write for, and find a voice in, the media.  In the current economic environment and with the malaise of the American worker at the forefront, I have felt the responsibility to speak out for change. With the hope of creating a valid voice, we have used my blog, Twitter and Facebook, and tried to work with other bloggers who have similar views on how to work together to rebuild America.

Where do you envision your business in five years?

With more than 70 companies to rebuild and needing my attention, I expect I will have my hands deep into our industrialist efforts to rebuild and ultimately sell strong viable assets.  In other words, I expect I will still be walking the path of rebuilding America one company at a time, one job at a time.

Why are you so passionate about saving distressed companies?

When companies liquidate, they take with them technology, tribal knowledge and JOBS.  The greatest loss to a family is the loss of life. But the second greatest loss is the employment of a working parent.  When jobs are lost, family structures unravel and children are left behind.  With more than 30 million Americans unemployed today, the destruction to family is immense and irreversible.

The most potent force of nature is people standing shoulder to shoulder, moving in one direction, pure of intent and united in consciousness.  We must all be aligned in the cause of rebuilding America, with shared vision, courage and perseverance.

Thank you, Lynn!

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Photo of Lynn Tilton courtesy Patriarch Partners, LLC, used with permission

Shonali Burke is editor of Women Grow Business and one of the country’s leading business communicators, who was named to PRWeek’s inaugural top “40 Under 40″ list of US-based PR professionals. She specializes in creating and implementing integrated (online and off), results-based, measurable communication programs for clients both large and small at Shonali Burke Consulting. An accredited business communicator, she is also Adjunct Faculty at Johns Hopkins University’s M.A. in Communications program and active in the local communications community as President of IABC/DC Metro. Talk to her via her blog, Waxing UnLyrical or Twitter.

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