Senior partner John Kelleher and partner Radhika Ray discuss the private equity playbook for enhancing company performance. Topics include revenue analysis, financial planning, CEO time management, and strategic growth opportunities.
Private equity emphasizes operational excellence for efficiency and productivity.
Comprehensive FP&A strategies require time and commitment for long-term financial success.
Deep dives
Private Equity Growth and Value Creation
Private equity has seen exponential growth over the years, with assets under management increasing dramatically. The industry is predicted to triple in size by 2030, showcasing impressive returns compared to public assets. Lessons from private equity can offer valuable insights for navigating complex economic environments.
Importance of Effective Financial Planning and Analysis
World-class financial planning and analysis (FP&A) is crucial for businesses to succeed. Parameters like macro assumptions, probability levels, granular inflation assumptions, momentum and downside case models, and back testing are essential in creating a robust FP&A structure.
Effective Dashboard Implementation
Cascading dashboards that start from underwriting models and align throughout the organization can enhance reporting consistency. Causal flow dashboards ensure safe operations, quality outputs, quick delivery, high customer satisfaction, and cost efficiency, fostering integrated and impactful management decisions.
Challenges and Solutions in Implementing FP&A Approaches
Implementing comprehensive FP&A strategies requires substantial time and commitment. Private equity firms excel in setting up FP&A systems effectively during the initial stages, emphasizing the need for a gradual yet focused approach to achieve long-term financial success.
Private equity firms have a well-earned reputation for elevating the performance of the companies they invest in. A cornerstone of their strategy is a relentless pursuit of operational excellence to drive efficiency and productivity. In this episode, we analyze what public company CEOs can glean from the private equity playbook to enhance their own company's performance. Our guests are John Kelleher and Radhika Ray.
John is a senior partner in our Private Equity Special Operations group and serves as an interim in-house executive helping companies execute large PE-style transformations. John has served in multiple executive roles in the private equity industry—including as CEO—and is co-founder of the PE-CEO Alpha Institute, a partnership between McKinsey and Harvard Business School to train private equity portfolio company CEOs.
Radhika is a partner in our Private Equity group and has over 15 years of experience in the private equity sector. She helps our clients with large-scale transformations and oversees the service line, implementing rapid labor productivity improvements.