After the deal closes, what next? Go create value! Depending on the context, you may suddenly find yourself behind the wheel of a large, urgently needed change program (e.g., digital transformation) or a small, targeted intervention that no one saw coming (e.g., salesforce incentives). In many small and emerging markets, the value creation agenda (be it wide or narrow in scope) must be delivered hands-on, while staying within a shoestring budget. Two things can help you deliver on budget while sparing a few precious hours in your packed days:
1. Invest in the capabilities of your portfolio company management team and empower them.
2. Build your tech arsenal to handle the most frequent requests yourself and at a fraction of the cost of an external vendor.
People: Invest in the capabilities of your portfolio company management team and empower them.
Upskill: Building the skills and confidence of your N-1 and N-2 management teams at your portfolio companies is key to unlocking their true firepower. But it takes time. Is it worth the effort? 100 percent yes. For change to be sustainable, these are the people who must own and drive it. Upskilling can take many forms. It can be as simple as drafting talking points and facilitation tips for a junior team member the first time they facilitate a meeting with the CEO and top team. Once you have built their confidence, you can begin to delegate more responsibility to them.
Delegate: Being able to put people to work and motivate them to do a good job is more art than science. The first step is determining where they fall on a skill-will matrix, which prescribes different approaches for each combination of skill and will. Keep in mind that individuals are motivated by different things, no matter their combination of skill and will. Referred to as the “five sources of meaning” by McKinsey & Company, these include:
1. Institutions: the reputation or performance of the organization
2. Society: building a better society, community or nation
3. Customers: providing superior products and services
4. Teams: sharing a sense of belonging, working effectively as a group
5. Self: experiencing personal development, career growth Tools: Build your tech arsenal to handle the most frequent requests yourself
Project management (PMO): Most people know (and despise) the classic approach of using Excel to track implementation of projects or strategic initiatives. This is, in large part, due to challenges with version control and simultaneous editing.
Fortunately for many, cloud software has made these issues a thing of the past, but others still find themselves emailing spreadsheets back and forth, which become less and less reliable over time. Instead, investigate the myriad offerings for project and portfolio management and select one that is sustainable for your context. Sustainable means a program that is fit for purpose, affordable and one that a critical mass of people in your organization already know how to use or are willing to learn. In the end, this may be Excel, provided that it ticks the boxes above.
Forecasting: One of the most common needs in smaller portfolio companies is an accurate way to predict sales, production needs, etc. that allows them to look ahead and ensure business continuity. Historically, days (or even weeks) have been spent to build complex models with dubious predictive power. If you have limited time and resources, such an exercise is out of the question.
Instead, spend a weekend getting to know one of the powerful, open-source tools for statistical analysis such as R and R Studio. In addition to being completely free, R and R Studio provide a level of machine learning precision in a fraction of the time of a traditional Excel model.
Media production: Often seen as a luxury, the development of creative media is, in fact, a must have in this digital age. The production of high-quality video content is imperative for the relevance of any modern business, whether sharing at-home cleaning tips with followers on social media or CEO remarks for an internal change management initiative. Media production is expensive and is typically outsourced. So if you can help your portfolio company by doing some basic editing for small internal or external projects, it will go a long way. Apple’s iMovie has long been the leader in video editing software for “dummies” but check out these Windows-friendly alternatives to iMovie if you are a PC user.
When the budget for outside products (e.g., software, hardware) and resources (e.g., consulting) is tight, do not despair. Learn enough to be dangerous, know what can and cannot be done by you and delegate the rest.
*Eli Gentle is an Associate Principal at Eos Capital, where he co-leads the value-add agenda for Eos Capital’s portfolio companies. American by birth but raised in Namibia, Eli spent six years as a consultant with McKinsey & Company in Dubai and Paris before joining Eos in 2021.