Best But Never Final: Private Equity's Pursuit of Excellence When Things Go Wrong: Diagnosing and Fixing Portfolio Problems
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Sep 23, 2025 The hosts dive into the messy world of private equity, discussing how to spot problems before they escalate. They emphasize the limitations of rear-view financials and the importance of forward indicators like churn and backlog. The conversation explores effective diagnosis through hands-on support rather than boardroom analysis. They also tackle the timing of leadership changes versus offering support and the role of a strong CFO in navigating crises. Expect practical insights to enhance your management approach and safeguard value.
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Financials Are Rear-View Mirrors
- Financial statements are accurate historical records but act as rear-view indicators that often lag emerging problems.
- Relying solely on month-end financials can mask unfolding issues that started during periods of good performance.
Design Business-Specific KPIs
- Define KPIs tailored to each business model, such as leads, backlog, churn, yield, or employee turnover.
- Track these forward-looking metrics to detect trends earlier than income statements allow.
Make Reforecasting A Discipline
- Run rolling forecasts and re-forecasts like 13-week cash flows and nine-plus-three projections regularly.
- Track forecast accuracy over time to identify bias and improve call reliability.