Private equity firms pay us to review value creation plans. About half of them are unrealistic.
Not because the opportunities aren't real—they usually are. But because the plan assumes execution will be straightforward when it never is.
Here's what we see most often:
The plan assumes perfect sequencing. It says you'll consolidate facilities in Q1, standardize processes in Q2, and capture synergies in Q3. Reality: consolidation takes longer than expected, which delays standardization, which pushes synergies into next year. The plan has no buffer for things going wrong.
The plan ignores dependencies. It says you'll reduce headcount by 20% and improve customer satisfaction by 15%. Those two things are usually in tension. You can do both, but not simultaneously and not without rethinking how work gets done. The plan treats them as independent initiatives.
The plan underestimates organizational resistance. It says you'll implement a new ERP system in six months. It doesn't account for the fact that the team has been using the old system for a decade, doesn't trust the new one, and will resist adoption until someone forces the issue. Technology changes are easy. Behavior changes are hard.
The plan has no owner. It lists initiatives but doesn't assign clear accountability. Who's responsible for delivering the $2M in procurement savings? Who's making sure the integration stays on track? Without ownership, nothing happens.
The value creation plans that work have three characteristics:
They're sequenced based on dependencies, not optimism. You can't capture revenue synergies until you've integrated the sales teams. You can't integrate the sales teams until you've aligned on the go-to-market strategy. The plan reflects that.
They account for organizational capacity. You can't run five major initiatives simultaneously while also running the business. The plan prioritizes based on impact and feasibility, not on fitting everything into a twelve-month window.
They have clear owners and consequences. Every initiative has a name next to it. That person is accountable for delivery. If they don't deliver, there are consequences.
If you're building a value creation plan or reviewing one, ask yourself: does this assume everything will go smoothly, or does it account for reality?
