Most businesses have plenty of information about performance. Revenue, margin, project milestones and other KPIs tell management whether things are going to plan.
But problems with execution often develop well before they affect the numbers.
Decisions start taking longer. More issues reach the CEO. Key people are pulled between competing priorities. Projects slip because one team is waiting for another.
These may seem like normal management issues. But when several start happening together, they can indicate that the organisation is struggling to deliver what is being asked of it.
Spotting these signs earlier is valuable, but it doesn’t necessarily tell management what to do.
Take slow decision-making. The CEO may be overloaded, but why? Perhaps too many decisions require their approval. Perhaps responsibilities between functions are unclear. Or perhaps the leadership team lacks the confidence or capability to make certain decisions.
Each requires a different response.
Bringing in additional support might help with workload, but won’t necessarily resolve unclear decision rights. Replacing a leader may address a capability problem, but won’t fix an organisation that routinely pushes decisions upwards.
Without properly investigating the cause, management can spend time and money on changes that don’t resolve the problem.
Understanding the cause gives management a better basis for deciding what to change.
That could mean redistributing responsibilities, changing how decisions are made, strengthening a team or adjusting the sequence of initiatives.
It is equally important to check whether the changes have worked. If decisions are still being escalated, or projects are still waiting on the same people, the underlying problem may remain.
For PE investors and portfolio company leaders, the opportunity is to understand these problems before they affect financial performance, investigate what’s driving them and make changes while there is still time to protect the value in the plan.
We help investors and leadership teams identify execution problems, understand their causes and make changes that improve delivery.
