July Issue

Navigating today's fast-paced business landscape requires precision, clarity, and a strategic mindset. This newsletter edition explores the nuances of value creation within private equity, the significance of identifying critical roles in the value delivery ecosystem and maintaining an evolving and accurate understanding of a company's value agenda. We also touch upon the inspiring story of the Random Act of Kindness Tour and its vast achievements. Lastly, an exciting update on the newsletter's new home awaits you. Join us in this enriching journey.

Article: What's Happening with Value in Your Private Equity Firm

In my years of experience working with private equity, I've consistently emphasized the importance of aligning talent with value. It's at the heart of an effective growth strategy. Bill Allen takes a deep dive into this philosophy in the following article, illustrating the approach that has benefited many of our top private equity clients.

As the business environment becomes increasingly complex with evolving technologies and work patterns, CEOs face a critical challenge: identifying where and by whom value is being delivered within their organizations. Bill introduces the "The List" concept – a targeted list of critical roles driving business value. It's about understanding the value and tapping into the right talent to deliver it.

Bill's insights offer a clear, actionable roadmap for CEOs navigating talent allocation in today's business landscape. I invite you to learn his perspective and arm yourself with practical strategies for enhancing enterprise value.

Here's an excerpt:

How aware are your portfolio company CEOs of value delivery in the most critical parts of their organization?

You've set up each and every company in your portfolio to create during the hold period. You've tasked each CEO with bending their company's value curve upwards as quickly as possible. However, in a world of accelerating change and remote/hybrid work, CEOs are not always clear about exactly who to call to find out where and what value is being delivered, never mind how fast it is arriving.

In these days of increasing complexity and high volatility, we don't have time for our portfolio company CEOs to be doing intuitive guesswork about value. In their haste, they will turn to their direct reports for answers, and those direct reports will turn to their direct reports, and so on. Not only is this hierarchical approach too slow. Its implicit direct report bias doesn't guarantee what should be discovered actually will be.

Instead, we need the CEOs leading our assets to be extremely precise with their data sources and appreciably faster with their assessments. They have to look more broadly and much deeper into their enterprise to identify the?roles critical to value creation?and the people in those roles who should, ideally, be among their Favorites. They need to stay connected with these individuals to keep their sense of what's happening with the company value agenda acceptably accurate and fresh.

Private equity firms find it imperative—and invaluable—to make, use, and regularly refresh what we at CEO Works call "The List" of critical roles for every one of their assets.

The question is, which roles should be on "The List"?

FOCUS ON HOTSPOTS

I mentioned in a previous article how a clear focus on a half dozen or so hotspots, places in the organization where significant value is or will soon be occurring, can make it possible to deliver?extraordinary results in record time . When a CEO focuses their attention on the key people delivering value at these hotspots, they can maintain an accurate, ever-changing mental map of the company's value agenda. And that improves their ability to respond appropriately and tactfully in real-time, with greater situational awareness, to everything that happens.

The dynamic nature of value warrants a dynamic monitoring framework. In private equity especially, these "value hotspots," initially derived from the investment thesis and the value creation plan, are not cast in stone. Some may recede into the background as circumstances change (for example, when international regulations limit commerce or demand falls). Others may emerge, offering a business the opportunity to create?unanticipated value .

Making a list of the critical roles at these hotspots gives the CEO an intense focusing tool to monitor what value is being delivered, by whom, and how fast.

You can read the full article?here .

Random Acts of Kindness Tour: Benefiting the Diamond Sports Foundation

I can hardly believe we're on the brink of September. The Random Act of Kindness Tour is almost here! The charity, founded by Sam Shriver , gathers Coast Guard Academy alums for a round of golf and for a good cause. As I have mentioned, the RAoKT is aiming its sights on The Diamond Sports Foundation this year, and I'm genuinely excited about the difference we can make together.

I'd like to share this message from Sam on how every donation counts:

And here's a fun fact: the RAoKT began as a casual idea, blending golf with football, among friends from the USCGA Classes of '78 & '79. Fast forward, and they've raised over?$60,000! Seeing how a simple gathering has snowballed into such a meaningful mission is heartwarming.

I hope you'll join in this wave of kindness. And if September's date isn't already circled in red on your calendar, please mark it down! September 5-10, 2023. If you're eager to dive in, just follow this LINK to either support a player or make a donation.

The Talent to Value Newsletter's New Home

Virgil was right. Time truly flies. It's been nearly three years since I embarked on the journey to share our firm's insights with you through this newsletter. Today, I'm both humbled and energized by the robust community of over 4,500 subscribers we've built together. Your engagement – your curiosity, questions, and feedback – has been the cornerstone of this dialogue.

As our firm matures and evolves, our communication must mirror the depth and breadth of our practice. Hence, our decision to transition the Talent to Value? Newsletter to our company's LinkedIn page. This move will not only uphold the insights you've come to expect but will enrich them, drawing from the diverse voices that comprise our dynamic team.

While the platform shifts, my commitment remains unwavering. I'll continue to share my perspectives and actively participate in our newsletter's narrative. However, note that with the upcoming issue next month, you'll need to re-subscribe to ensure uninterrupted access. I'll be sure to remind you when we share the next issue.?

Here's to our continued dialogue and many more insights.

I hope you are enjoying my newsletter. Feel free to leave me your feedback in the comments section below.

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