Everyone in private equity talks about value creation. Evidenced once again in the Value Creation for Private Equity Conference last week I attended in London: ‘’Financial Engineering is dead’’
But let’s be honest, most Value Creation Plans (VCPs) never make it past the boardroom slide deck.
After supporting and reviewing dozens of plans across portfolio companies, I’ve noticed a clear pattern: They fail not because the strategy is wrong, but because execution discipline is missing.
Here are the five most common reasons why VCPs fail — and what to do about them:
- No Ownership
VCPs are often consultant-built and management-owned on paper. But if no one truly “owns” each initiative, it fades into the background.
Fix: Assign clear ownership, one name per initiative, not committees. Tie it to incentives.
- No Link to Financial Impact
Many plans list initiatives but lack quantified value (EBITDA, cash, ROIC). Without a clear business case, prioritization becomes guesswork.
Fix: Translate every initiative into impact. Even rough numbers drive better focus.
- No Tracking Discipline
A plan without KPIs, milestones, or traffic-light status is just a wish list.
Fix: Track progress monthly. Use dashboards, not decks. Celebrate green, fix red early.
- Too Much, Too Soon
Some teams try to do 40 things at once and end up doing none.
Fix: Focus on the top 5–7 value drivers. Use a Benefit-vs-Effort matrix to filter what really matters.
- No “Why”
If the management team doesn’t believe in the why behind the plan, execution dies in week three.
Fix: Co-create the plan with the people who must deliver it. Ownership follows belief.
Bottom line: A Value Creation Plan is not a document — it’s a discipline. The magic happens when execution rhythm meets ownership, tracking, and focus.
Or as I like to say: