Maximizing Value Creation From Your Investment in Times of Uncertainty 5
IMPROVING
RESILIENCE
THROUGH
ROBUST
PERFORMANCE
MANAGEMENT
Developing a holistic portfolio of leading and lagging performance indicators, and
taking a systemic approach to enterprise performance management can serve as an
early warning system for market disruption and margin risk. As the adage goes, "You
cannot manage what you cannot measure."
Examples of leading operational indicators can include customer satisfaction metrics like
net promoter score, and customer satisfaction score. Employee satisfaction indicators
like employee attrition and engagement can also powerfully signal failure points across
the enterprise.
As Simon Freakley and Lisa Donahue wrote in a recent Harvard Business Review
article, robust financial indicators can identify potential risks and opportunities early
on and enable leaders to take proactive measures that will mitigate risks and capture
opportunities. And even though portco leaders are likely to be the first to spot operational
issues such as slowing orders, growing inventory, or delayed collections, it is also
important that they and their investors pay attention to other indicators, such as the
cost of capital and changes in industry dynamics, which may reveal broader sets of
opportunities and risks.
Uncertainty and disruption in the current market
environment will require PE teams and portco leaders
to take multifaceted approaches to value creation going
forward. Their operating model changes must address
immediate threats, while capturing efficiencies that will
fuel future growth.
Maximizing Value Creation From Your Investment in Times of Uncertainty 5
4.