What you can do today to turn things around in 2020
Stale portfolio companies not only impact fund performance, they also drain valuable time and resources. While it may be clear that a portfolio company’s potential is not being realized, PE execs often have trouble getting to the bottom of “why”. And, management struggles to explain and fix the problems.
So, for each underperforming company in your portfolio, ask yourself:
- Has this company been lagging behind expectations for 3 or more quarters in a row?
- Rather than utilizing internal resources to continue propping up this company, might our time be better spent elsewhere?
If you answered “yes” to both questions for any companies within your portfolio, then it’s time to bring in outside resources. Third-party operations consultants bring focused attention and unbiased expertise to the core problems facing the company. Effective consultants sidestep any ongoing conflicts, identify achievable solutions and provide the evidence and clarity to gain buy-in across all segments of the organization.
In fewer than 4 weeks, you should expect to receive an unbiased assessment including:
- What is affecting performance levels?
- What are the hidden EBITDA opportunities?
- What is working well?
- What operational changes are necessary?
- What personnel adjustments are needed to set the company on a path of sustained growth?
Operations consultants should integrate closely WITH your portfolio company’s management team and build organizational buy-in to any proposed changes. And, following the initial assessment, they should have the capabilities to work alongside your management team to effectively implement identified strategies, and ultimately build the bridge between the company’s performance and your expectations.
As you head into the new year, don’t let operational challenges linger at any of your underperforming portfolio companies. Contact us today to find out how The ProAction Group can help you take the first steps to making 2020 a home run year.