For many organizations eager to transform either part or all of their business, the road from developing the strategic vision to executing the plan can be a bumpy one often wrought with failures. According to McKinsey, a staggering 70% of business transformations fail to achieve desired outcomes, with the most significant breakdowns happening during the implementation phase. 

In the private equity environment, where portfolio company transformations are often a critical value creation lever and determinant of investment success, the challenges to bridging the gap between strategy and execution are even more pronounced for several reasons. 

First, larger, mature organizations have more ramp and runway to implement plans. PE-backed companies, on the other hand, face tighter deadlines and shorter timeframes. Needles must be moved within the often-limited holding period. 

Second, portfolio management teams are often much leaner. Executives wear multiple hats and hold many responsibilities for running the daily operations of the company. As a result, the resources needed to take a grandiose transformation idea and make it a reality are often not readily available. 

Finally, producing quick wins in the short term is important for executive teams with impatient investors who want to see progress. Unlike higher-level corporations, portfolio teams don’t have the luxury of working towards a grand “a-ha” moment. 

If only 30% of transformation projects succeed in established corporations, it can be assumed that the number is even lower for PE-backed companies, given the challenges outlined. Carrying a plan from strategy to execution with success requires a regimented approach guided by a blueprint that includes the following: 

• Establish Explicit and Realistic Goals: From the outset, identify a handful of achievable goals against which teams can begin executing right away. Objectives should be tangible, inspiring, and motivating such as launching a new product, establishing a presence in a new market, or assuming leadership within a particular industry. Avoid making financial numbers the end goal. If the plans are executed properly, the financial metrics will follow. 

• Be Excruciatingly Tactical and Detailed: Break down high-level objectives and goals into executable actions that are tactical in nature. Spare no level of specificity in defining how each part of the plan is going to be implemented and achieved. Outline each step of the process in detail and make sure all steps are included, no matter how big or small.

• Communicate and Collaborate: Make sure everyone on the team, from the senior leaders to the most junior employees, understands priorities and clearly knows who is doing what and when. Assign ownership and ensure responsibilities are known and understood.

• Governance and Oversight: Establish a committee to monitor the execution progress of individual initiatives as well as the broader transformation plan. Ensure they have visibility into the priorities of each aspect of the plan. Empower them to coordinate with and among vertical teams, make difficult decisions, and course correct, when necessary.

• Operationalized Project Management: Finally, arm your project teams with the tools, technology, and a modernized approach to tracking progress, collaborating, and measuring results. Establish a regular cadence for meetings, reporting, feedback, and new idea sharing. Create templates and automated processes so teams can focus on the work at hand without diversion.  

PE-backed companies do have some advantages. With less bureaucracy and smaller and nimbler teams, execution can move forward with greater speed and pivots can be made with greater ease. But transformation projects, generally, are hard. Committing from the outset to a formalized approach where success is clearly defined and stakeholders effectively engaged can bridge the gap between strategy and execution and ensure that transformation projects ultimately deliver meaningful, value-creating impact.  

To learn how Maestro can help your organization bridge the gap between strategic planning and execution, click here to learn more and schedule a product demo.