The Truman Show of Value Creation
Value Creation Plan Newsletter #105
There are only two times in the life of a value creation initiative when everything will go according to plan:
1) when the initiative lives on a PowerPoint or Excel before execution
2) when the initiative has been completed and everyone talks about it retrospectively, inevitably embellishing the story as if giving a TED talk.
In between these two points of start and finish, lies the messy reality of life, which can derail even the most well-intentioned teams.
The Truman Show
While any initiative might look like it is going well on the surface, like a Truman Show on TV, the reality of what is actually going on is often much more real and human.
Over the years, I've encountered multiple variations of this scenario when assessing value creation initiatives with working teams and stakeholders.
Several factors often come into play:
Theory vs. Reality: While the business case creation process is necessary, it often paints an unrealistic picture of deadlines, resources, challenges, and lessons that will be learned along the way. Most companies operate their finance departments with waterfall sign-offs, while delivery teams function in some flavor of agile. This disconnect can lead to misaligned expectations.
Who is in charge?: Often the people executing are not the ones who came up with the plan in the first place, or there might be team members joining half-way. While fresh perspectives can be valuable, it disrupts momentum and takes initiatives in unexpected directions.
Shiny object syndrome: Competing priorities will take precedence, drawing resources and attention away from ongoing initiatives. This will lead to delays, reduced effectiveness, or leaving half-baked initiatives as done.
Given some of these real life challenges, it's truly a small miracle when initiatives are completed on time, on budget, and aligned with the same ROI assumptions under which they were launched.
Breaking through the dome
Just as Truman Burbank in "The Truman Show" eventually realises his entire world is a fabricated set, it is important for any value creation team leads to always see (and share!) the real picture beyond their carefully constructed plans.
This moment of clarity can be both unsettling and liberating. Once everyone moves away from the ideal picture of what was in the original business case excel and talks about what is actually going on, the truly valuable conversations can happen to:
Realign efforts with the most critical value drivers
Identify and eliminate non-essential elements that may have crept into the scope
Leverage lessons learned from challenges encountered to improve future planning
Adapt strategies and tactics to get the project back on track
Celebrate incremental wins and progress despite challenges, maintaining team morale and momentum
Remember, the goal of value creation in private equity isn't to maintain a perfect, controlled environment like Christof's elaborate set. Instead, it's about navigating the real, messy world outside the dome to achieve meaningful improvements that enhance the portfolio company's value.
By remaining adaptable, teams can overcome the inevitable challenges and still deliver substantial value.
When faced with the chaotic realities of value creation execution, channel your inner Truman. Don't be afraid to question your surroundings, challenge the status quo, and forge ahead into uncharted waters.
Let's embrace the mess and create value,
Juan Lopez-Valcarcel