Most value creation plans don’t fail because they’re wrong.

They fail because the organization can’t execute them while running the business.

Apollo recently made the macro case: the era of cheap debt and multiple expansion is over. Operational value creation is the job again. The data supports it – over the last decade, a disproportionate share of returns came from financial engineering, not fundamental improvement.

That argument is correct.

It’s also incomplete.

It tells you what needs to happen. It doesn’t tell you why most portfolio companies struggle to deliver it – or what it costs when you discover that gap too late.

Here’s the harder question:

When you look at your portfolio company’s value creation plan – the adjacent market expansion, the product roadmap, the pricing lift, the bolt-ons – can that organization actually execute it without something breaking?

Most can’t.

And most sponsors don’t discover that until 12 – 18 months into the hold – when growth is behind plan, management is stretched thin, and the exit window is no longer forgiving.

The Plan Isn’t Usually the Problem

 

On paper, most value creation plans are rational.

  • Expand the product line.
  • Enter adjacent markets.
  • Improve pricing discipline.
  • Run accretive acquisitions.

Management believes in it. They’ve built a good business. They know their customers.

Then the business fights back.

  • Pricing improvement requires a compensation redesign – and suddenly you’re staring at sales leadership turnover.
  • Market expansion demands capabilities the company doesn’t actually have – and can’t build fast enough without overwhelming the team.
  • The M&A pipeline looks robust – but no one has bandwidth to integrate properly.
  • A new product launch stalls because operations are fully consumed supporting today’s SKUs.

The strategy doesn’t collapse because it lacked logic.

It collapses because no one pressure-tested whether the organization had the focus, capacity, and alignment to execute while still delivering quarterly performance.

That’s where value creation plans quietly break – not in the model, but inside the org.

In a tighter exit market, discovering that gap in year two doesn’t just cost time.

It costs leverage.

What Actually Worked

 

A PE-backed specialty chemicals manufacturer we worked with was three years into its hold.

  • Operations had improved.
  • Two bolt-ons were completed.
  • Margins were stable.

But organic growth wasn’t where it needed to be. Without a credible next leg of expansion, the exit would have been a margin story, not a growth story – and the board knew it.

The company didn’t lack ideas. There was a long list of innovation initiatives underway.

The issue wasn’t creativity.

It was focus, velocity, and conviction.

Leadership wasn’t confident they were investing behind the right opportunities. Projects moved slowly. And the growth narrative lacked the kind of external validation a buyer could actually underwrite.

We began with a disciplined application discovery effort – customer interviews, primary research, and industry mapping to identify where the company’s existing capabilities could solve urgent, monetizable problems in adjacent markets.

Not theoretical TAM.

Opportunities tied to real customers with defined needs, budgets, and timelines.

That effort surfaced more than 100 potential applications.

We validated commercial attractiveness and technical feasibility, then narrowed the portfolio to five focused growth platforms — each meaningful in scale, each grounded in a differentiated right-to-win.

Then the work shifted from analysis to execution.

We translated those platforms into structured development workplans with clear owners, milestones, and resourcing.

We connected the company with external testing partners to eliminate bottlenecks.

We engaged target customers early – refining value propositions, qualifying requirements, and securing pilot activity.

The objective was simple: move from internal R&D optimism to external market pull.

As traction developed, we worked with the CEO and leadership team to stress-test what was realistically executable while maintaining performance in the base business. Resources were reallocated. Priorities clarified. Several initiatives were cut to preserve focus.

By the time the sponsor prepared for sale, the growth narrative wasn’t aspirational.

It was grounded in five defined platforms, validated economics, and visible customer traction.

Multiple new products were launched.

Commercial commitments were in place.

A strategic buyer acquired the business at an 11x EBITDA multiple.

What Buyers Actually Underwrite

 

In tighter exit markets, buyers don’t underwrite initiative volume.

They underwrite proof.

Customer commitments matter more than TAM slides.

A focused pipeline with owners, milestones, and resourcing is worth more than a broad roadmap without accountability.

A growth story survives diligence when it reflects demonstrated execution – not intention.

Apollo is right: the next decade belongs to the builders.

What that paper doesn’t address is that building inside a portfolio company is organizationally hard. Teams are stretched. Incentives skew short-term. Capacity is finite. The base business never pauses.

That’s where value creation plans fail – not in the strategy, but in the gap between what the plan assumes and what the org can actually do.

At Newry, we don’t validate plans after they’re written.

We pressure-test what’s executable with this team, in this timeframe – and then do the hands-on work required to turn strategy into diligence-proof commercial traction before the exit process begins.

Would a buyer underwrite your growth story today?

If the answer isn’t an easy yes, it’s already time to close the gap.