Private Equity Forum 2018 Highlights Part I: PE can drive organic growth for portfolio companies
Posted by: AmberRoberts in: Financial Services -
I recently had the privilege of spending two days with LPs, funds and advisers at one of the leading private equity industry events, MarketsGroup’s 7th Annual Private Equity US Forum. This year, I participated in a roundtable conversation, “Adding Value to Portfolio Companies,” a challenge I have been tackling for more than 10 years through marketing and PR counsel for PE client portfolio companies.
My fellow panelists represented various areas of expertise – sales and marketing, data, financials, operations, risk and insurance — and the group identified several best practices for taking portfolio companies to the next level. While all conceded that add-on acquisitions can bring immediate revenue, this source of growth inherently comes with a host of issues, such as integration, that require careful management.
The net of our discussion: organic growth is indeed the “holy grail” for portfolio companies. For those embarking on an organic growth strategy, the panel raised several key aspects to consider:
- Understand your customer: As mentioned by Tim Foster of Sales Benchmark Index, digitization is changing how buyers are buying, and businesses need to evolve. Companies must carefully consider how and when a customer wants interaction. Whether it’s evaluating the sales funnel, refreshing customer personas or testing a marketing strategy, the more a company knows about its customer, the better equipped it is to drive sales.
- Talent: Hands down, all panelists felt that talent plays a key role in a portfolio company’s growth trajectory. This is not limited to talent at the executive or management level; it includes mid-level managers and their team members as well. As Dan Upperco of Mubadala Investment Company shared, “There’s a great correlation between good hires and deal success.”
- Good data: Companies need it! Data is driving decision making across organizations, and it needs to be fast and reliable. From Slade Kobran of Chief Outsiders, “[It’s] not just about data for reporting… for dashboards, but for decision making. We need to use data to make better decisions and better choices.”
- Preparedness: Every company has some risk to manage, and no one is completely protected from a crisis. Preparedness is critical, and it includes taking steps before a situation even occurs to ensure a crisis won’t dilute your brand, reputation or sales. Simply put, have a crisis team and plan in place and be ready to tackle any issue – be it a product recall, employee issue or data breach – as soon as it arises.