I have read a lot of value creation plans. I wrote some of them. The good ones are impressive documents: five workstreams, a clean EBITDA bridge, every assumption sourced, every dependency mapped. They look their best on page 14 of the deal memo.
Then the deal closes, and the plan meets the business.
Here is what nobody puts in the memo. The plan rarely fails because it was wrong. It fails because there is nobody in the room who has done the job before.
I spent more than ten years as COO of ANS Group. We took it from a regional reseller doing £2.5m of EBITDA to one of the UK's leading cloud and managed services businesses, around 750 people, and a sale to Inflexion for more than £200m. I have sat on both sides of the diligence table. I have written the 100-day plan, and I have been the one holding it together when it didn't survive contact with reality. So when I say private equity firms keep hiring the wrong people to help with value creation, it comes from having been the person they should have hired.
The returns moved. The advisory bench didn't.
Most of the return in a private equity deal used to come from leverage and multiple expansion. Buy well, hold, sell into a kinder market. That game is largely over. The returns now come from operational improvement, from making the business measurably better while you own it. The research puts it close to half of all value creation. In UK IT services, where roughly 78% of deals are now private equity-backed, it is most of the game.
The plan rarely fails because it was wrong. It fails because there is nobody in the room who has done the job before.
And yet the advisory bench around these deals is still dominated by people who have never run one of these businesses. They are clever and well trained. They can build a model and benchmark a margin against a peer set. What they cannot do is tell you which 20% of the CRM is load-bearing, spot the CFO who is three months from resigning and hasn't said so yet, or know that the platform migration the outgoing team sold you as nearly done is nowhere near it.
Operators know where the bodies are buried
We know, because we buried a few ourselves.
Take gross margin on the recurring book. A consultant benchmarks it and tells you it sits two points below the peer set. True, and close to useless. An operator knows those two points are hiding in renewals that drifted, contracts that rolled over at last decade's rates because nobody owned the conversation, and a service line everyone calls strategic precisely because it loses money and no one wants to be the person who kills it. Same data point. Completely different next move.
Or take a management team. A consultant scores them against a competency framework. An operator asks one question: can these people execute at the pace a new owner is about to demand? You can only answer that if you have stood in front of a board and tried to do it yourself, on a quarter when the number wasn't there.
This is the difference between describing a business and reading one. The data room tells you what happened. It does not tell you what is about to.
This is not a knock on consultants
There is real work consultants do well. Market sizing, competitive mapping, the broad commercial sweep across a sector the deal team doesn't know. Breadth is their craft, and on the right question they are very good.
But value creation in the hold period is not a breadth problem. It is a depth problem. It is being on site when the plan meets the business, not presenting to a steering committee once a month. The two are not interchangeable, and most firms find that out the expensive way, somewhere around month nine.
What good looks like
The best value creation work I have seen, and the best I have done, did not come from a better plan. The plan on page 14 was usually fine. It came from someone being in the room when the plan met the business. Spotting the CFO problem before it became a resignation. Challenging the migration claim in week one instead of month four. Sitting with the operating team long enough to find the truth behind the management account, then being willing to be unpopular on the days it mattered.
None of that is clever. It does not need a framework. It needs someone who has carried the number, will sit with the team long enough to find the real story, and is not afraid to tell the CEO something they would rather not hear.
The operator's read
Private equity has spent fifteen years getting very good at buying IT services businesses. It has spent far less time getting good at owning them. The firms that close that gap will not do it with a thicker deck or another framework. They will do it by putting people in the room who have built one of these things before.
That is the whole idea behind Advisio. Operators who advise, not consultants who operate. I started it because I kept watching good businesses underperform good plans, for want of one person in the room who had been there before.
Don't confuse the plan with the business. Or the blueprint with the building.
If you are backing, running, or preparing to exit a business in this sector, that is the conversation worth having now.