Over the last year, much of our work at Scalewell has focused on a question we think receives too little attention: what does it actually take for an organisation to deliver its strategy?
We have been looking at this particularly in private equity, where ambitious value creation plans need to be delivered within a defined investment period. The more we have worked on it, the clearer it has become that there is a gap between testing whether a plan makes financial and commercial sense and testing what it will actually demand from the organisation expected to deliver it.
A strategy can make financial and commercial sense while asking more of the organisation than it can deliver. That matters more as the demands placed on the value creation plan increase.
Bain's 2026 Global Private Equity Report uses the phrase “12 is the new 5”. In its illustrative example, a deal that required around 5% annual EBITDA growth in 2015 would require around 10–12% today to generate a comparable return.
More of the return needs to come from what happens to the business during the hold period. The initiatives in the VCP therefore need to deliver more, often within a relatively short timeframe.
This increases the importance of a question at the centre of our work: can the organisation actually deliver the plan? A VCP can make financial sense while asking more of the organisation than it can deliver.
We’re working with investors and management teams to understand the demands their plans place on the organisation, identify what could get in the way of delivery, and improve execution.
If you’d like to discuss how this applies to your business or portfolio company. Please select a time to meet with us here.
We help investors and leadership teams identify execution problems, understand their causes and make changes that improve delivery.
