100-day plan critical to faster value
Successful GPs understand that the creating a 100-day plan is more than a suggestion — it’s a necessity. The plan establishes the cadence between the financial sponsor and the newly incentivized management team, and it’s critical to generating faster value.
Sponsored by Grant Thornton LLP and produced by Privcap, this three-part roundtable discussion features these professionals:
• Ed Kleinguetl, managing director, Transaction Advisory Services, Grant Thornton LLP
• Rob Ospalik, partner, Baird Capital
• Jack Purcell, principal, Ridgemont Equity Partners
The conversation is facilitated by David Snow, president of Privcap and former editor-in-chief of PEI.
Part 1: The Importance of the 100-Day Plan
See how executing an effective 100-day plan for operations improvement sets the precedent for getting the most value out of a transaction.
Typically, says Grant Thornton’s Ed Kleinguetl, if change doesn’t happen in the first 100 days of a company transformation, it’s back to business as usual, without the expected improvements and results. The greatest opportunity for change is on closing day. It’s the time to say this is how things are, going forward. For value creation and growth strategies to gain value for the company, it’s necessary to get an immediate start on the 100-day plan.
Grant Thornton sponsored this Privcap presentation. Watch The Importance of the 100-Day Plan.
Part 2: Planning and Tracking the First 100 Days
See how a PE firm uses the 100-Day Plan as a map for value creation.
How and when to create a 100-day plan are dependent on the time available between beginning the due diligence process and when closing must happen — the more time upfront the better. With the completion of due diligence, you’ll know about risks and if value drivers are achievable. Whatever the timing, the 100-day plan must be at least preliminary before the money goes in and prior to closing, according to Grant Thornton’s Ed Kleinguetl.
Grant Thornton sponsored this Privcap presentation. Watch Planning and Tracking the First 100 Days.
Part 3: When Value-Add Means Leadership Change
Professionals discuss how to execute change in management without hindering value creation.
In the transformation of a company, changes can include a change in leaders. There’s no more critical time to be sensitive as well as candid; direct communications about what to expect must be part of the 100-day plan. Business stability depends on taking into account a key leader’s relationships with clients, staff and suppliers, and planning an orderly transition.
Grant Thornton sponsored this Privcap presentation. Watch When Value-Add Means Leadership Change.
Part 4: When 100-Day Plans Don’t Go as Planned
Professionals from Baird Capital and Ridgemont Equity Partners share their stories about when deals do not pan out.
In earlier days, owners would be told nothing would change. But that was a false illusion. Now expectations are laid out, and engaging in dialogue is considered essential to avoid the unexpected. Especially for a formerly entrepreneurial business, significant changes are indeed coming — meaning regular management meetings, budgeting, capital expenditure processes. For more assurance of success, more realistic tactical planning must be done.
Grant Thornton sponsored this Privcap presentation. Watch When 100-Day Plans Don’t Go as Planned.
Q&A with Ed Kleinguetl
There’s a certain amount of magic to the 100-day plan, since energy toward change tends to disappear after closing. The work of building the 100-day plan actually starts days and weeks beforehand. That way you have maximum velocity on day one. The specialized services and subject matter advisers at Grant Thornton provide guidance in planning and implementation of your 100-day plan.
Grant Thornton sponsored this Privcap presentation. Watch Expert Q&A with Ed Kleinguetl.
For further insights
Inside the 100-Day Plan is an executive summary of the thought-leadership video series The Art & Science of Investing, created by Grant Thornton and Privcap. Key findings are that operational improvements must happen early, management buy-in is essential, plans should start to take shape during due diligence, managing to benchmarks keeps companies on track, and leadership changes may put plans on hold. Insights are provided by three industry professionals. and leadership changes may put plans on hold. Insights are provided by three industry professionals.
As shown in “The First 100 Days,” published in the August 2013 issue of M&A Advisor, PE firms and strategic buyers should plan for the ownership start before the deal closes. Ed Kleinguetl describes how a 100-day plan can make or break a deal.