Portfolio Companies Need Help -- Sometimes from 3rd Party Consultants

Private equity groups are currently more interested in improving the performance of portfolio companies than they have been, well, forever.  With fewer new deals getting done, private equity professionals have more time to dedicate to the portfolio.  And with the economy in full-on recession mode, it is prudent of private equity investors to be more hands-on with management. 

 

In some cases, the private equity professionals are deciding that a third-party consultant should be engaged to work with management.  The best candidates for outside consulting support are those that are facing periods of significant uncertainty and change in their niche market sector.  The change may be internal to the company, or brought on by outside forces (competitors, market dynamics, customers, or even suppliers). 

 

The role of the consulting firm is provide management (and the owners) with the facts they need to make strategic positioning decisions.  The most value comes not from mere diagnostics or research, however.  The work should be inherently actionable; the fact-finding should serve as the foundation for the development of options and recommendations.  Examples of common consulting project types are as follows:

 

1.     Operational efficiency.  Help companies assess and make changes to improve their abilities to control costs.

2.    Sales force efficiency.  Help the sales departments of portfolio companies identify Quick Wins – more sales to existing customers, new customer opportunities, new market opportunities, new distribution channel strategies, and selling more with fewer people.

3.    Market changes.  Analyze the market, customers, competitors and suppliers to identify opportunities for growth.

4.    Management changes.  Provide organizational development assistance, and offer recommendations for change in areas such as compensation, culture, and communications.

5.    Strategic planning.  Help create an actionable, tactical roadmap to achieve the core objective of the organization – with milestones and metrics, champions, costs, and expected returns. 

Every company faces periods of uncertainty, change, or transition.  During these times, when difficult choices need to be made about which direction to follow, objective facts are essential. 

To learn more, visit, Our Website.  Acclaro Growth Partners.