THERE’S NO SUBSTITUTE FOR EXPERIENCE: A Discussion On Operational Excellence WITH MORDY RAPAPORT, NCA ADVISORY BOARD
Mordy Rapaport is a brilliant business leader who is also a key Advisory Board Member at NCA. As the Founder and CEO of A-6684 Capital, a private equity fund based in Israel, Mordy’s experience leading companies and people, along with his razor-sharp focus on operational excellence, make him an essential part of the team that ultimately decides which candidates will be invited to join NCA’s Entrepreneurship Through Acquisition program. We interviewed Mordy to find out more about his personal journey and what he believes are some ideal traits of great company leaders.
TAKING A PEOPLE AND PROCESS FORWARD APPROACH TO BUSINESS
Mordy Rapaport knows exactly what it means to successfully run a family-owned business. The Rapaport Group, which was started by his father in 1976 in New York, had organically and sporadically grown until it had over 225 employees in 12 different offices, spanning six countries and four business units. As the company evolved, Mordy recognized that shifting to a more structured environment would be key to the company’s success. Mordy was responsible for restructuring the company’s publishing business unit and then went on to become COO, overseeing all of the company’s centralized management functions. “The accumulation of all that experience gave me great insights into the world of operations and how a focus on bottom-up operations, can really lead to improving the company’s performance and people’s opportunities within the company. That experience guided me to truly understand the importance of operational excellence.”
After 12 years with the family business, Mordy decided to forge a new path and founded A-6684 Capital, where he is currently CEO. Structured as a private equity fund, Mordy explained that A-6684 Capital looks to acquire companies that are profitable in nature, with a focus on businesses that are predominantly people and process-oriented. The company takes a long-term approach to managing businesses by consistently striving for maximum efficiency and operational excellence. “When it comes to operations, we’re detail-oriented because the details are really how one goes about improving a business and building a foundation upon which scale can be achieved. For example, many businesses we review typically have human resource-related costs amounting to 75 to 80%, so it’s important to make sure companies are running very efficiently by hiring the right people and investing in their development and growth.”
ADDING VALUE THROUGH SEARCH FUNDS AND THE NCA CONNECTION
Mordy met NCA Co-Founder and Co-CEO Christian Malek while at IMD Business School in Switzerland in 2017 and became involved with NCA from an early stage in an advisory role. Mordy finds Search Funds interesting and attractive because “they seem to work; the returns substantiate that. My firm also looks at the same types of businesses as a Search Fund: companies that are traditional, profitable, and have room for us to come in and add value through optimization.”
As an NCA Advisory Board member, Mordy plays a crucial role in selecting candidates for the NCA Entrepreneurship Through Acquisition program. He explains that one of the unique features of the NCA program is that NCA entrepreneurs tend to be slightly more mature and have demonstrated experience in their field. “When we interview people for NCA’s program, we’re looking for people that have both hunger and experience, as opposed to just one or the other,” he explains, “which I think increases the odds of success.”
By the time Mordy sits down with potential NCA candidates, he knows they’ve been whittled down from a large pool of talent and have already been thoroughly vetted by the NCA team. So what does Mordy look for when it’s his turn to evaluate potential NCA Entrepreneurs? “I tend to look more attentively at soft skills, like leadership capabilities, and I try to understand whether this candidate is going to stick around when things get tough,” he says. “Embarking on a Search Fund with someone can be a ten-year-long journey, so if I see someone whose CV shows they’ve jumped companies every three or four years, I want to understand why. I need to know they’ll be committed to the very end.”
KEY OPERATIONAL SKILLS IN GOOD LEADERS
Mordy’s many years of top-level operational experience have given him deep insights into the world of operations and enabled him to identify key traits that stand out in successful operators, like humility. “I think humility is a very important skill because it lends itself to leading by example,” he says. “I’m looking for humble people. I’m also detail-oriented, so I look for that in the people who would be working with us.”
When asked what factors set good operators apart from great operators, Mordy explained that “a really amazing operator is somebody who’s able to take their operational experience – which I place a core emphasis on – and marry that to value orientation with regards to the finance component. A great all-around operator is someone who is not only a focused and passionate manager, they are also able to sit down and skillfully allocate capital or structure deals that would blow your mind.”
Mordy’s leadership experience continues to play an important part in shaping NCA’s program, which began its full operational rollout in 2020. “Most Search Funds up until now have been predominantly supported by a very small group of investors,” explains Mordy, “so one of the things that’s interesting about NCA is that they’re opening Search Funds to more searchers and investors. In addition, their program is designed to facilitate the process of actually getting a Search Fund up and running. NCA’s support team enables their Searchers to move into the Search Fund process faster and more efficiently.” And with Mordy’s expertise on the Advisory Board, one can be assured that striving for operational excellence will always be a key component of any NCA Searcher’s journey. “There’s just no substitute for experience,” Mordy emphasizes, “especially when it comes to operations.”
NCA Entrepreneurs are being assessed and selected for the company’s unique ETA program on a rolling basis. To find out more about our Entrepreneurship Through Acquisition program, visit our website, and stay tuned for more updates as the NCA program continues to grow.