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So far Simon has created 11 blog entries.
7 05, 2019

IoT: How Much Steak, How Much Sizzle?

By |2019-05-07T11:07:47+00:00May 7th, 2019|Internet of things, Private Equity Value Creation|

When it comes to the Internet of Things (IoT) and its applicability to creating value in the products and services of lower middle (LMM) and middle market (MM) industrial companies, is it all sizzle and no steak? It’s a critical question, because these markets can’t survive on sound and scent alone – they neat to add real meat to their bottom lines.

The question has come up more than a few times during my travels in Europe and the U.S., and it’s been flavored still more (clearly, food is on my mind) by the rapid IoT-supported evolutions in the electric vehicle, electric utility (smart metering), vehicle / asset tracking, and marine industries. Today, for example, there are more than 200 million smart electric meters installed worldwide and that number is growing – rapidly.

Which is why I believe we’re moving beyond the sizzle and are going to start seeing IoT built into future LMM and MM revenue projections, as they incorporate IoT into their product and service line strategies. I think that we are […]

3 03, 2019

Using the 4W Framework to Rationalize IoT Investments

By |2019-05-03T08:52:05+00:00March 3rd, 2019|Internet of things, IoT, Private Equity Value Creation|

Developing IoT solutions for existing product lines is increasingly important to industrial companies of all sizes and scopes, primarily because they’re seen as important value-adds without the need to reinvent the wheel itself.

One example: manufacturers are adding sensors to their devices in order to provide customers with a preventative maintenance service – the product is monitored and, when necessary, serviced, without inconveniencing the customer. The result: no disruptive field failures, the product’s service life is extended, and by extension the brand enjoys a stronger affinity from the customer.

That’s the theory, anyway.

IoT Potential vs. Reality

Because we live in an era with virtually unlimited potential for imagining digital tools and the connective networks that bind them, industry is faced with a difficult decision: while IoT devices sound good in theory, how do you know if an IoT investment actually makes sense?

To answer that question, we recommend answering four key questions about the users (and uses) of the IoT product prior to actual development and deployment. We’ve bundled these into what we call the 4W […]

5 09, 2018

A New Formula for Creating PE Deal Value, Stability

By |2018-12-19T10:03:43+00:00September 5th, 2018|Operating Partners, Private Equity Value Creation|

The private equity formula is simple. PE investors expect their portfolio CEOs to drive positive, measurable changes that led to healthy exit options. In a majority of cases, however, that formula is being turned on its head, with the exits coming from the CEOs themselves (73% of them, to be exact) along with corresponding hits on costs, valuations, and plan goals.

Clearly, the formula needs to change, particularly in an era when mounting deal pressures and lengthening hold periods are creating a kind of perfect storm that could result in even more CEOs heading toward the exits.

How best to change the formula? By creating a targeted, tailored support structure that fully empowers and supports CEOs to lead their enterprises through their transformation plans – a structure that acts like a three-legged stool.

A Three-Legged Stool

Based on our years of experience in the PE arena, we believe today’s portfolio CEO needs targeted, tailored modes of support that, collectively, enable them to drive the kinds of enterprise transformation investors want.

You can think of this new […]

19 06, 2018

Building a Board that Works for Middle Market PE Firms

By |2018-06-05T10:03:09+00:00June 19th, 2018|Operating Partners, Private Equity Value Creation|

High asset prices have placed enormous pressures on middle market private equity management teams to execute ‘the plan.’ While we previously focused on how an Operating Partner can help prevent the epidemic in CEO turnover plaguing many such operations, in this post we want to talk about an equally important component of the equation: identifying and building an effective Board of Directors.

It goes without saying that the BoD is critical in ensuring investor returns. And while the nature of the BoD roles and where they should invest their time and energies are somewhat dependent on the circumstances of the deal and the nature of the value creation plan, there are four areas the BoD upon must focus on irrespective of the deal nature:

  • Governance
  • Plan Execution
  • Strategy Formulation
  • Human Capital Development

Each of these areas requires some time and attention to assure the prosperity of the firm.

However, at its most extreme (or worst), the BoD expends a disproportionate amount of effort on plan execution and governance. And while plan execution is clearly […]

5 06, 2018

Making the Case for – or Against – IoT for Mid-Market Manufacturing

By |2018-06-05T10:10:10+00:00June 5th, 2018|Private Equity Value Creation|

The rapidly falling costs of sensors and cloud-based storage have more than a few B2B industrial companies wondering if it’s time to add sensors to their products, thereby opening new data (and revenue) streams.

IoT is, of course, big business. Discrete Manufacturing, Transportation and Logistics, and Utilities will lead all industries in IoT spending by 2020, averaging $40B each and Bain predicts B2B IoT segments will generate more than $300B annually by 2020, including about $85B in the industrial sector.

Which may be why I’m sensing a growing level of uneasiness over IoT strategies within the ranks of privately owned middle market companies (assuming those strategies exist at all).

Bain estimates

And who can blame them for eyeballing a piece of that considerable pie, particularly when faced with the incessant pressure to generate investor returns? Add some sensors, capture the data and, lo and behold, a new revenue stream is born, right?


The potential of IoT

Given the industry’s mounting interest in IoT and having personally worked with major public […]

15 06, 2017

Using Customer Focus to Simplify Operations

By |2018-06-05T10:15:19+00:00June 15th, 2017|Operating Partners|

Spend a few hours picking the brain of virtually any senior executive today and I can almost guarantee two of the topics that will come up: simplification and customer focus. What you are far less likely to hear, however, is the inherent synchronicity linking these two concepts.

To most executives, simplification is specific to an internal activity practiced by a project team. Conversely, customer focus is deemed an externally focused activity and usually the domain of marketing or sales. Why the missing link between these two all-important practices? From my experience, it’s usually a reflection of the little time senior executives spend with their customers and, by extension, the value they put on such efforts.

The point being, this is a significant area of value creation that most companies are ignoring.

Ask most customers or suppliers for their perception of your company, for their insights into how easy you are to engage or to do business with, and the insights you receive will invariably be more useful and actionable than any internal assessment or outside consulting […]

12 06, 2017

The Additive Manufacturing Revolution: Ready or Not

By |2018-06-05T10:14:12+00:00June 12th, 2017|Operating Partners|

My professional life began in earnest in the 1980s at the very same time that the Just-in-Time (JIT) revolution emanating out of Japan was really beginning to hit its stride. Borne out of the vaunted Toyota Production System, JIT rocked manufacturing industries large and small and gave rise to new modes of competition that remain as potent today as they were 30 years ago.

A cornerstone of JIT was ‘batch of one’ production, an innovation that resulted in low inventories, faster factory throughput, and for obvious reasons, stronger business results. Alliteratively speaking, JIT was a hit.

I offer this by way of explaining why I think we may be on the cusp of another major paradigm shift in the world of production, this time through a process known as Additive Manufacturing (AM).

Over the previous 5 years or so I watched as ‘the maker revolution’ sprang to life in garages and sheds and workshops around the world. I saw, too, how phenomena like ‘rapid prototyping’ were radically changing the design […]

6 01, 2017

The 7 Lessons to a Successful Product Launch

By |2018-06-05T10:13:57+00:00January 6th, 2017|Operating Partners|

Given just how important new product launches are to the value creation process, I thought it worth sharing seven of the most important lessons learned during my years in the trenches, as a CEO, and as a consultant.

To make things easier, I’ll use a recent success story to help illustrate these lessons – each of which played a significant role in the launch of a new platform.

Some background: the company in question already enjoyed broad-based adoption of its sophisticated electronics. But the rapid evolution of technology being what it is, a market disruption prompted the need for the wholesale reengineering and national field replacement of a complete product range on an extremely ambitious time table – the existing suite of products would be obsolete (non-functional) in 42 months.

Encompassing six products covering multiple end applications, closer inspection revealed a number of issues that had to be addressed, including:

  • The existing products were poorly designed and expensive to produce
  • The engineering team was overwhelmed with multiple projects and shifting priorities
  • The commercial team was increasingly […]
16 11, 2016

Listening to the ‘Leaners’: A Critical Lesson in Business Transformation Analysis

By |2018-06-05T10:13:40+00:00November 16th, 2016|Operating Partners|

Millions from both sides of the political aisle – including the pollsters and pundits who predicted a Clinton victory – are understandably flummoxed by the outcome of the recent presidential election. How did so many get it so wrong? And for our purposes, can any of these lessons extend to those of us in the business of private equity investing?

As it turns out, the answer to both of these questions lies less in the polling data political experts used to (incorrectly) predict the election’s results, and more in the habits of conventional thinking and biases through which they collected and viewed that data.

For starters, remember that not everyone was surprised. A small minority of voices were arguing that Clinton and the Democrats were trusting in long-held beliefs which led to a kind of blind optimism. In other words, the biases baked into their beliefs were sufficient to dispel any doubt – even from those critical voices who warned of problems.

Consider, for a moment, the words of a Philadelphia bartender, who warned that even […]

19 10, 2016

Operating Partners: Friend or Foe?

By |2018-06-05T10:14:59+00:00October 19th, 2016|Operating Partners|

In the very earliest days of a newly acquired portfolio company, “I’m from corporate and I’m here to help” is probably one of the worst things that a leadership team can hear, particularly coming from operating partners. While that “help” can be of immense value, the initial reaction is usually one of defensiveness.

The role of Operating Partner within the PE world is very much a live issue, but if you have chosen to pursue that route it’s worth considering how to maximise the effectiveness of the role and, frankly, give your Operating Partners a fighting chance of adding value.

It’s a truism to say that the relationship between a portfolio CEO and the Operating Partner needs to be built on trust but it’s worth exploring how to get there. This powerful graphic is useful in explaining how we see this issue.

ff-imageAssume that the starting point is ‘distrust’ (we’ll discuss how to make the starting point a different place in a later article), which means the CEO thinks […]

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