New Private Equity Study Sponsored By Chief Outsiders, LLC Identifies 7 Blind Spots and 13 Emerging Strategies
How good are Private Equity firms at adding value to accelerate the growth engines of their portfolio companies? And, what new or innovative strategies are being deployed vs. business as usual tactics. Chief Outsiders commissioned Tallman Insights to help answer these questions by interviewing twenty private equity partners. They included a mix of equity partners, operating partners, and deal sourcers focused primarily on the middle-market.
One of the key blind spots uncovered in this study is understanding the root cause of growth issues in a portfolio company or investment thesis. Often private equity investors depend, and rightly so, on the right management teams to understand their customers and markets. But is that enough as valuation multiples continue to increase? We at Chief Outsiders have found through our work with clients that "Big M" - the integration of an insight based strategy together with tight alignment of the Marketing and Sales functions, can be a force multiplier. It's like adding another gear to a bicycle to pedal faster - the single gear bike may work fine at slow speeds, but flattens out as speed increases.
What does this "Big M" integration look like? It starts with investment in a marketing "engine". This begins with a root cause understanding of how revenue flows from the clients and consumers to the Company. What are the drivers of this revenue flow, and how can it be accelerated and itemized so that marketing investments have a specific rate of return?
Once this is understood, the next step is to focus the sales force on the revenue drivers, and away from activity that does not directly produce additional profitable revenue. This seems almost absurdly easy, yet it often does not happen. Take a look in your own Company. What is the sales team spending their time on? Are they taken up with customer service issues? Are they trying to sell parity products to the competition at a premium price? Maybe reporting is cumbersome and time consuming. Or maybe your sales person has sold and closed the deal, but their time is taken up shepherding the deal through the various processes in your company, rather than moving on to the next sale. What if your sales force was a growth "engine", powered by insights, and knowing exactly where to focus their efforts to maximize return?
Understanding the Marketing and Sales linkage is only one of many insights in this new study. Tallman has taken the time to talk in depth with Private Equity executives who invest, grow and sell their portfolio companies every day. You can learn more about the 7 Blind Spots and 13 Emerging Strategies by reviewing the full study at https://lnkd.in/eycQ6Pi.
After you review it, consider contacting Chief Outsiders to explore the possibilities for your Company. Perhaps a start would be to take some of the insights in the study, see which ones may apply to your company, and to ignite the growth that you have always thought was there but did not have the time to actually make happen. [email protected].