…. Growth company boards spend lots of time thinking about how to get the best performance from existing executives and which new roles may be needed to cope with expansion. Bandwidth and skill constraints are weighed up against budgets, and the trade-offs between those factors are debated.

…. There have been various research reports in the UK and US suggesting that private equity generates higher returns than public markets, even when adjusted for risk and fees. However, those returns seem to have declined over time due to increased competition, higher entry multiples, changes in debt markets and the greater instability of major economies.

…. Plenty of the mid-market growth companies we work with create group structures. That may be because of expansion into new territories, the separation of, say, services activities from a technology product, or through acquisitions.

…. We all know - by all the main metrics - that deal volumes and value have decreased significantly over the last, say, 18 months. Buyers and sellers both appear more reluctant to transact due to uncertain valuations, costly debt and economic sluggishness.

…. How do we get important things done in growth companies? Take the examples of Sales and Operations which are at the core of most businesses. For starters, we create dedicated functions and populate them with people who have relevant skills and manage them through senior managers with relevant experience.

…. Managers in growth companies expect to work hard and it is desirable that things run reasonably ‘hot’ because that forces teams to ignore trivial issues. But frequently that can tip over into unhelpful over-loading where we see the following phenomena:

…. Pretty much all the companies Catalysis gets to work with are going through a transition - or several transitions at once.

…. Imagine the following scenario. A year ago, the board decided to make a senior appointment to add capacity and capability to the senior team. Head-hunters were appointed, candidates screened, references taken, and an appointment made.

…. Some months ago, I argued that formal value creation methodologies – created to address the problems of a less favourable investing environment – could be self-defeating unless balanced by greater attention to how teams and organisations build value in practice (which Catalysis refers to as value enablement.

…. You’ve heard of shrinkflation in consumer products like chocolate bars, drinks and even toilet paper: smaller portions at the same or higher cost. Have you ever considered that the same might be happening with companies being backed by private equity, albeit for different reasons?

…. I suggested recently that private equity investors are involved in building ‘value machines’ built from four components: partnership; governance; expectations; team & organisation strategy.

…. It is often helpful to give labels to new concepts which otherwise stay fuzzy. The problem with fuzzy concepts is that they are hard to visualise, communicate and work on.

…. To have the highest probability of success in enabling value, the investor or Chair probably need to check whether all five contributions are likely to be provided by the people involved in post-deal planning and strategy setting. If there is a gap, it needs to be filled somehow.

Armed with more empowering assumptions; the insight, focus, and acceleration questions; and a desire to seek out low cost (in money but especially time) but high impact solutions, how might activities across the investment lifecycle become more value-adding?

The previous article concluded that current Value Creation approaches may, through their assumptions and methods, cause various dysfunctions which impede value creation. It proposed, by way of a counterbalance and partial cure, ‘value enablement’.

The way that formalised Value Creation has been deployed means that it is often hindering its own objective of systematically growing economic value. This article explains why.

Data on the characteristics and dynamics of small and mid-sized companies can be a bit thin. So, on International Women’s Day, we thought it might be interesting to share analysis from across two Catalysis databases.…

Most of us are familiar with the Pareto Principle, often referred to as the 80:20 rule. The idea, as captured in the graphic below is that a few activities are disproportionately responsible for a large majority of results. The implication, if we can identify the valuable few and take action to deliver them, is that we can achieve substantially better outcomes…