The Private Equity Podcast, by Raw Selection

Playbook Series - Jay Goldman on how to create a repeatable playbook for value creation at portfolio companies

Aug 7, 2023

Learn about creating value in private equity, building a value creation team, using templates for effective plans, benefits of repeatable checklists, importance of internal communication, building checklists and workflows, and tracking KPIs for value creation

37:50

Episode guests

Jay Goldman

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Quick takeaways

Creating operational value is essential in private equity, moving beyond traditional cost-cutting methods.

Utilizing playbooks and checklists streamlines tasks, ensuring effective tracking of KPIs for sustainable value creation.

Deep dives

The Evolution of Private Equity Value Creation in Changing Economic Times

In a changing economic landscape with rising interest rates, private equity firms are shifting their value creation strategies. Previously, the focus was on financial engineering and cost cutting, but now, there is a greater emphasis on building sustainable, high-growth businesses. The need for value creation teams with diverse skill sets and a focus on operational excellence has become crucial to achieve long-term success. This shift necessitates a reevaluation of traditional approaches and the adoption of new strategies to adapt to the evolving demands of the private equity industry.

Efficient Status Reporting for Post-Merger Integration - Conductor Platform

00:43

Orchestration Platform for Value Creation

00:58

Adapting Private Equity Strategies to Rising Interest Rates

01:59

Introduction

4min

Enhancing Value Creation in Private Equity Firms

19min

Emphasizing the Necessity of a Structured Playbook for Internal Communications and Processes

4min

Creating a Repeatable Playbook for Value Creation at Portfolio Companies

5min

Creating Playbooks and Tracking KPIs for Portfolio Companies

6min

Welcome to the Private Equity Podcast Playbook Series. In this series, we'll dive deep into crucial private equity subjects and provide playbooks that you can use to grow your firm or portfolio company.

Introducing Jay Goldman

Jay Goldman is the Co-Founder and CEO of Sensei Labs, a Conductor used by the world's top organizations to orchestrate their most critical transformations. Jay and his team enable project management, collaboration, data tracking, and knowledge management that modern organizations need to be successful.

What You Will Learn

Sources of Value Creation in Private Equity

What it Means to Create Value in a Portfolio Company

How to Create Structure in Your Processes

Breakdown

[00:00] Introduction

[01:40] Value Creation in Private Equity

[03:51] What it Means to Create Value in Private Equity

[07:02] The First Step to Creating Value in an Asset

[09:15] How to Build a Value Creation Team

[12:15] Templates for an Effective Value Creation Plan

[15:00] How to Orchestrate a Value Creation Process

[20:35] Playbooks and the Benefits of Having a Repeatable Checklist

[23:43] Why Internal Communication is Crucial For Team Success

[26:54] Who Should Be In Charge of Value Creation?

[32:20] How to Build Out Checklists and Workflows

[35:19] Pros and Cons of Status Reporting

[36:55] Parting Thoughts

Value Creation in Private Equity

What does it mean to create value? If you're looking at it from an enterprise value perspective, you have an asset as part of our portfolio, and paid $10 million for it. Then your goal should be to exit it at a multiple, say 30, 40, or 50 million dollars. This means you'll have to create some enterprise value before exiting that asset. Jay adds that value creation is no longer associated with firing people. Much has changed, and now more PE firms are determined to create value. Today, PE firms are focused on building better businesses by growing their ability to produce revenue, built on acquisitions, geographic expansion, repricing, or new product lines. However, this is not to say that cost reduction is not essential because it will always be a factor in almost every value-creation plan. But it is now less emphasized than it was in the past.

How to Contact Jay

Jay on LinkedIn

Senseilabs.com

The Checklist Manifesto: How to Get Things Right by Atul Gawande

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