5 ways to jump-start your post-COVID value creation planning. By Joseph Baker, Principal Consultant EXM
COVID-19 has brought economies around the world to a standstill, which has caused great hardship and difficulty to many businesses. However, it is often said that private equity thrives in times of disruption like these, indeed some of the best private equity vintages followed the global financial crisis in 2008.
But finding success amongst the chaos is certainly not a foredrawn conclusion for the industry. Here are five ways you can jump-start your value creation planning to bounceback strongly from positions of adversity or maximise the potential of any new opportunities.
1. Maintain strategic agility
Strategic agility was one of the buzzwords from a recent webinar 'COVID-19 and the future of value creation' that EXM hosted with the BVCA. We heard from expert panellists such as Maria Carradice of Mayfair Equity Partners, who stated that "every single business now, whether you've been very adversely affected by it all or very positively affected, should be looking at what changes they can make going forward to make them a lot more agile".
The ability of a business to change direction quickly is crucial to value creation in periods of uncertainty. Embedding flexibility into your strategy and utilising technology that allows you to implement and communicate changes in direction quickly, will instill confidence in decision making and allow you to react to changes in the market with conviction.
If you would like to catch up on the webinar you can listen to it here.
2. Keep your Investors and Board aligned
In these challenging times, it is easy for priorities and the objectives of different stakeholders of the business to become mis-aligned. Accountability for failures and the required reaction is sometimes complex and difficult to manage. In private equity, the relationship between the investor and the business also requires careful handling.
During any market shock, such as the COVID-19 outbreak, there is a natural heightened sensitivity or nervousness from the Board around every decision, so maintaining transparency and visibility in order to keep both viewpoints aligned is paramount - the ability to share complete information on business performance in a clear and timely manner is crucial so that roadblocks and unforeseen risks can be flagged immediately and the problems they cause can be shared and handled collectively.
3. Monitor key value drivers and track your strategy execution
To enable you to maintain both your strategic agility and keep your investors updated and aligned with the Board, you need systems in place to visualise, track and report on your key value drivers. Effective and robust monitoring means not only maintaining oversight of financial and operational performance, but also that you are hitting targets in the execution of business KPI’s and the list of tasks that need to be completed in order to achieve them. If the execution of your strategy is on course but you are way off your objectives, or conversely, if you have nearly hit your target but only at the start of your project, intelligent monitoring will enable you to make the necessary strategy changes and realign resources.
4. Manage the risks early to minimise impact on your deliverables
We are all aware of the wider risks that COVID-19 poses to people, businesses and the economy as a whole. But it is vitally important that businesses assess and manage the impact of risks to every aspect of a business and the value creation plan deliverables. The better that you can proactively identify risk and incorporate mitigating strategies into your value plan, the more effectively you can adjust and change direction to respond to possible disruptions and challenges.
Robust risk management solutions such as EXM are designed to support proactive risk management at every stage of your value creation plan, to allow companies and investment managers to flag risks during value creation planning and highlight issues as soon as they emerge. Once identified, initiatives can be created and incorporated into the value plan to mitigate the impact directly.
5. Take advantage of the latest digital and mobile solutions
There is no doubt that the pandemic has accelerated the digital transformation trend that was already gaining momentum. During the crisis, some companies had to shut down or employees forced to work from home. The adoption of collaborative tools like Zoom and Teams has meant that it has been possible to keep communicating remotely.
It is equally vital that all those involved in the performance of a business continue to have easy access to the value creation plan and receive timely updates as and when changes in strategy are agreed or performance in delivery is updated. Technology has meant that in most cases the planning and monitoring of business activity can be done from anywhere.
How can EXM help?
Resilience in businesses and communities is built by working smarter and leveraging the many tools that technology is putting at our disposal. EXM is an important addition to the portfolio of solutions that can support a PE fund in the process of remotely controlling the performance of its assets and gather key information about the progress of strategic initiatives and key risks.
The Coronavirus crisis is a challenge that has forced companies to confront the way they work and will certainly lead to discoveries of a more effective way of collaborating. EXM is ready to help.
Quick recap: how to jump-start your post-COVID value creation planning
1. Keep your plan agile so that you can change direction quickly;
2. Maintain visibility and keep your investors and Board aligned;
3. Monitor your strategy and keep track of your key value drivers and KPI’s;
4. Manage the risks early to minimise impact on your deliverables;
5. Take advantage of the latest digital and mobile solutions.
To learn more about how EXM can help keep your Value Creation Planning alive during Coronavirus download our brochure or get in touch
About Joseph Baker
Joseph joined EXM in 2019. Previously, he was a freelance Management Consultant with a focus on working with owner-managed businesses (OMB's) that are looking to use technology and digital innovation to gain competitive advantage. He has a passion for data driven, purpose-led business transformation and innovation and a proven history aiding and significantly improving the efficiency and success of numerous organisations across a variety of sectors. Joseph holds an Msc from UCL in Economic Development.