Why investment, ownership change and ambition don't automatically create value - and what does.
Most ownership changes – whether they’re EO, MBO, PE or family succession – are sold to the people inside the business with a story about value creation. New ownership, new investment, new horizon, new ambition. The thinking goes that the structural change unlocks the potential. Money flows, people are engaged, and growth follows.
It can. But in the businesses, I see, it often doesn’t – or not at the pace the story implied. There’s a gap between what the deal promised and what the business actually delivers in the 12-36 months that follow. That gap is the bit I want to talk about, because it’s avoidable – and avoiding it is mostly about execution discipline rather than anything fancy.
Why the gap shows up
Three things tend to be true after an ownership change that weren’t true before. There’s more ambition – a clearer growth narrative, often a new ambitions led set of targets. There’s more capital, or at least more clarity about where it can come from. And there’s a wider set of stakeholders watching – trustees, investors, family shareholders, the team itself.
What’s often missing – and this is where the gap opens up – is the execution framework to translate the ambition into outcomes. The leadership team that was excellent at running the business as it was, isn’t always set up to deliver the business it now needs to become. The operating rhythm that worked for steady growth isn’t built for the pace the new owners are expecting. The accountability structures that were informal under the founders don’t carry the weight of the new ambition.
Ambition without execution discipline produces frustration. Lots of activity. Steering committees. Workshops. Strategy refreshes. And, twelve months in, very little movement against the targets that anchored the deal.
Ambition creates energy, but execution discipline is what closes the gap between intent and outcome.
Where execution most often breaks down
The plan is too ambitious for the resources the business actually has. The growth ambition needs more capability than the team currently carries, more capital than the cash flow comfortably supports, or both. Nobody wants to be the person who says “this isn’t deliverable as we planned it”, so the plan stands. The execution then under-performs, and nobody is surprised – because nobody really believed it in the first place.
The projects that are meant to drive the growth never get properly defined. There’s an aspiration to “improve customer retention” or “open the new market” or “reduce cost-to-serve”. There isn’t a clearly scoped programme of work with named owners, measurable outcomes, and a date when somebody is going to be held to account. Without that, projects tend to drift – they become standing items on the management agenda that everybody hopes will move forward.
Accountability isn’t real – the leadership team has agreed who owns what in theory. In practice, when a programme underperforms, nobody is required to explain why – or what they’re going to do differently. The conversation shifts to the next thing on the agenda. This is the killer, in my experience. It’s not malice; it’s discomfort. But the cost compounds quickly.
The team doesn’t measure what would tell them whether they’re winning. Lagging financial outcomes get reviewed monthly. The leading indicators – the operational and behavioural signals that show whether the strategy is actually landing – rarely get the same scrutiny. By the time the financials reveal the problem, the problem has been there for months.
What closes the gap
Some of this is mindset. A leadership team that’s genuinely committed to closing the gap acts differently from one that’s hoping the gap closes itself. The accountable team has to want to be held to outcomes – not just to plans, not just to activity, but to outcomes. That’s the leadership behaviour change that tends to drive everything else.
Even a really solid value creation plan will fail to deliver the intended benefits if people aren’t able to recognise when execution is going off track.
Some of it is structure. The growth ambition needs to be broken down into a manageable number of business improvement projects, each properly scoped, each with a named owner, each with success measures that are quantitative and time-bound. Not too many though – often leadership teams try to run too many simultaneously, alongside the ever demanding ‘day-jobs’ – which is the commonly observed approach to limit the positive impact opportunity each can have if given the needed resource and prioritisation discipline.
Some of it is rhythm. A monthly cadence that genuinely reviews progress against the value creation plan – not the operational dashboard, not the financial results, but the specific outcomes that the plan said would land. Honest conversation about what’s on track, what’s slipping, and what’s been quietly abandoned. That meeting matters and should not be delayed or skipped due to the operational challenges shouting loudest on the day.
And some of it is culture – in the specific sense of how the team handles bad news. A team that can name a problem early, agree what’s going to change, and hold itself to that change, will close the value creation gap. A team that brushes problems under the carpet and reports green status on amber projects will not. This is the bit where leadership behaviour, and the delivery accountability culture it nurtures, either creates the conditions for execution or quietly undermines them.
Measuring and learning
Underneath all of this is a simple discipline that many SME’s must work really hard to embed if its not currently a recognisable part of their culture. Each business improvement project should have its own measurement. Each measurement should produce learning – what’s working, what isn’t, what assumption is being proved wrong. Each piece of learning should change something – the plan, the resource, the timeline, the approach.
When I work with leadership teams on this, the breakthrough often comes not from teaching them anything new – they know what to do – but from creating the structural permission to admit when something isn’t working. That’s the cultural shift that unlocks the rest.
Where to start
If you’re in the post-transaction window and the value creation plan feels like it’s slipping, the work is to stop, look honestly at where the gap is, and rebuild the execution rhythm around a smaller number of properly scoped, properly accountable projects. If you’re in the pre-transaction window, the work is to start building the execution muscle now – before the new ambition lands on top of it.
The deal creates the opportunity. The execution decides whether you take it.
Start with a conversation about where your business really stands.