Value creation strategy is a key element of private equity. Gartner's Strategy in 2020 report highlights eight major shifts transforming businesses by 2020 including value-drivers, its role, and execution.
With these changes come inevitable challenges. But what are the top six challenges in strategy execution that private equity value creation strategy leaders need to overcome alongside their portfolio companies? In this article, we explore the hurdles firms are overcoming to deliver value-driven strategic plans.
1. Delivering value to the Business
Focus remains on developing a Value-Creation Plan with value-driven actions that offer positive outcomes to the Business and of projects doing the work required to ensure the strategy is achieved.
2. Transforming a strategic vision into reality
Some businesses are still struggling to see how to turn their beautiful strategy slide deck into something tangible that team leaders can deliver. A well-planned value creation strategy will enable any private equity firm to transform strategic vision into a reality.
3. Translating the CEO’s ideas into real projects
Focus on how you translate the CEO’s ideas into a set of clear, understandable value-driven projects that make it real. Often these are agreed upon between the portfolio company's management/executive team and the private equity firm pre-transaction. Best-in-class value creation strategists will use technology to outline these goals so that they become real, tangible, and trackable projects to execute on post-transaction.
4. Turning a strategy slide deck into something that teams can deliver
It is vital to connect the tangible Value-Plan to the rest of the organisation. Most private equity firms - especially their value creation strategy team - suffer from a culture of or lack of transparency within the companies they seek to improve. Value creation technology can really enhance this process by getting all personnel on the same page, focused on the metrics that truly matter.
5. Ensuring the right work is done to achieve the strategy
Your people need to be empowered to deliver the projects. Team members need the ability to focus on the work and projects that add value and contribute to the success of the Value-Plan.
6. Bridge the gap between strategy formulation and execution
One of the problems with an organisations strategy and its execution is the disconnect between the two. Linking strategy formulation and execution is a difficult one, but once it is in place, your teams can fly.
Is your organisation's value-creation & strategy planning process as efficient as it could be?
The reality is that according to Harvard Business Review “Companies realize only 40-to-60 percent of their business strategies’ potential value.” Here at UNTAP by EXM we believe that execution excellence is the basis of value-creation for organisations and individuals.
Are you ready to translate your Company's strategy into an executable ‘Value-Creation Plan'? Why not download our brochure today to learn more.