Jay Goldman, cofounder and CEO of Sensei Labs , co-author of New York Times bestseller The Decoded Company, HBR Advisory Council member. Copyright by Tom Werner If 2022 was the year companies began embracing enterprise orchestration for sustained transformation, 2023 will be the year their investors and private equity owners become fast followers. Rising interest rates, extended inflation and a potential recession have made it difficult for PEs to meet expectations (see PEI LP survey ). Hugh MacArthur, a partner at consultancy Bain & Company, sums it up : “There’s no arguing that private equity faces a dual threat from rising rates and costs.” Value Creation Is Transformation By A Different Name The last decade has been the age of transformations, which I refer to as the era of enterprise orchestration . Transformation is now a critical skill and success factor for enterprises, including many owned by PE. Successful portfolio transformations are a prerequisite to fundraising and the fund’s ongoing existence. Value creation plans (VCPs) have the same characteristics as transformations, with the added clarity of well-defined financial KPIs and a fixed duration. Accelerating VCPs and reducing risk is a massive competitive advantage for scarcer LP investments and against […]