For years, rising equity markets and low borrowing costs allowed organisations to create value mostly through financial engineering and portfolio reshaping. Today, these levers are no longer enough. With higher interest rates, pressured valuations, and geopolitical shocks adding volatility, the most controllable source of new value—and increasing returns—is a company’s own operations.
This shift is particularly pronounced for corporates under stress and private equity operators. Hold periods are lengthening, exit multiples are less predictable, and investors are no longer satisfied with promises: they demand results. Measurable EBITDA uplift, improved cash conversion, and resilience in the face of disruption are now minimum expectations. The central question has shifted from “What is the strategy?” to “How fast can we deliver, measure, and sustain results?”
In today’s volatile environment, value creation is no longer about the plan - it’s about disciplined execution and measurable impact. Leaders who operationalise value-creation plans from the outset build investor confidence and reinforce their organisation’s financial resilience by capturing early wins, unlocking revenue opportunities, and strengthening cash and cost positions.
While moving fast to deliver visible impact is key, it’s equally important to sustain momentum by actively managing the portfolio and embedding operating discipline. McKinsey research shows funds prioritising operational value creation have achieved up to 2-3 percentage points higher IRR on average, compared to peers and companies that consistently refresh their business mix outperform competitors by ~3.5% in long term TSR.
When it is time to prepare for an exit, the most successful operators often launch midcycle value-creation plans and conduct structured scans 12-18 months in advance. This allows issues to surface early, protecting value and ensuring exit readiness.
Why operational value creation matters now
The shift toward operational value creation is being driven by multiple factors. Financial engineering alone no longer delivers the returns it once did, sponsors and corporates can no longer rely on low interest rates or valuation tailwinds to generate value. As the focus sharpens on bridging private equity’s value-creation gap, disciplined execution and operational improvement have become the true differentiators.
At the same time, transparency expectations are rising. Modern portfolio-monitoring tools now provide real-time visibility into performance, enabling boards and investors to track progress, risks, and impact weekly rather than quarterly.
Yet even with clearer insight, execution gaps continue to stall results. Many management teams lack the bandwidth, tools, or expertise to translate plans into measurable outcomes, prompting a growing role for Operating Partners, Chief Transformation Officers, and embedded change teams to accelerate delivery.
In this environment, our experience shows success comes about from a relentless focus on execution. Plans alone will not reassure investors, however demonstrable impact can.
From strategy to impact: making value creation plans operational
Both PE funds and corporates invest significant time crafting value creation plans (VCPs). But the real differentiator can be the ability to operationalise them from day one. McKinsey research shows that the share of PE firms applying a consistent value-creation model across their portfolio has increased roughly 50% to 75% over the past decade, underscoring that disciplined execution of VCPs from day one is a key differentiator.
Consider the case of a mid-sized financial services provider, acquired by a leading private equity firm. The firm’s value creation plan identified more than £150 million in potential EBITDA improvements, but the management team was uncertain how to translate these opportunities into action. Within weeks, an embedded transformation team was deployed to break down the plan into actionable initiatives, assign clear ownership, and establish a rigorous cadence of weekly reviews. By the end of the first 100 days, the company had already unlocked £30 million in working capital and secured early wins in procurement renegotiations - building investor confidence and momentum for the next phase.
Translating strategy into results requires discipline across three important dimensions. Every initiative must begin with a quantified, data-backed hypothesis of its potential EBITDA or cash impact. Each must have an accountable owner and a tight operating rhythm (weekly value reviews rather than quarterly updates) to sustain pace and accountability. And all progress should be underpinned by a live data pipeline that provides real-time visibility, enabling early intervention to avoid common frustrations when delivery risks emerge.
The first 100 days should not be for drafting new hypotheses; rather, private equity operators should focus on proving early wins and building investor confidence.
Three levers most effectively drive value
Our analysis shows that value creation levers can enable 25%-45% margin growth. To achieve this level of EBITDA uplift, many different operational levers can be deployed depending on a company’s context, maturity, and transformation ambition. However, in our experience, three levers consistently prove to be the most effective drivers of value:
- Working capital and cash discipline. Liquidity remains paramount. Tighter receivables management, smarter payables terms, and dynamic inventory optimisation can release cash to stabilise operations or fund growth. Disciplined execution can unlock 5–10% of sales in free cash, often within months.
- Commercial and pricing excellence. Revenue uplift is becoming a primary driver of value creation. Tactical moves can deliver meaningful margin expansion quickly. Advanced analytics and AI are making these interventions faster, more precise, and more effective.
- Procurement and cost reset. Category-specific procurement renegotiations and zero-based budgeting are helping organisations establish a defensible cost baseline. McKinsey analysis of more than 340,000 transformation initiatives, representing over $200 billion in value, shows that procurement typically deliver over 20% of total financial impact, and companies that hit their procurement targets are nearly twice as likely to achieve enterprise-wide savings goals.
In turnarounds and distressed situations, these actions are often the fastest route to restoring margin and rebuilding confidence. Each lever can be directly linked to the VCP, rigorously tracked, and stress-tested against potential disruptions.
Sustaining impact and strengthening exit readiness
Short-term wins can create breathing room, but lasting value requires building institutional muscle, a skill that even successful transformations often fall short on. Companies that achieve enduring change are more likely to embed transformation disciplines, such as target setting, business planning, and rigorous forecasting, into their operating model.
Take the example of a leading infrastructure company that embarked on a multi-year transformation. While the initial focus was on cost reduction, the company quickly realised that sustaining impact required a broader cultural shift. By upskilling employees, embedding a culture of continuous improvement, and establishing governance mechanisms to align capital expenditure with the value agenda, the company not only achieved its EBITDA targets but also positioned itself for long-term growth.
Sustaining impact requires discipline across capital, capability, and culture. It begins with capital expenditure discipline: ensuring that every pound invested delivers measurable value. Leading organisations establish formal prioritisation frameworks that link all capital projects directly to strategic objectives and expected financial outcomes. By rigorously reviewing proposals for ROI and tracking actual versus projected benefits, they eliminate waste, free up resources for high-impact initiatives, and reinforce financial accountability at every level.
Equally important is building a transformation-ready workforce. Beyond traditional training, this means embedding operational rigour through targeted playbooks, KPI-driven performance management, and cross-functional rotations that accelerate capability building. When teams are equipped to deliver operational improvements quickly, they not only sustain impact throughout the hold period but also strengthen performance well beyond exit.
Finally, lasting results depend on a culture of continuous improvement: treating operational excellence as a repeatable habit rather than a one-off push. Organisations that recognise and celebrate incremental EBITDA gains, institutionalise lessons learned, and scale successful interventions across the enterprise are best positioned to sustain improvements, protect the investment thesis, and maximise exit value.
McKinsey’s global transformation research, drawing on data from more than 1,600 transformations across industries and geographies, shows that organisations that successfully deliver impact are over twice as likely to embed transformation disciplines such as target setting, business planning, and performance forecasting into their business-as-usual operations. These companies treat transformation not as a one-off event, but as a repeatable operating capability
While achieving short-term wins is critical, the true value of transformation and change lies in its sustainability, ensuring that improvements endure well beyond the initial effort and create a foundation for long-term growth.
In today’s high-stakes environment, operational value creation is making a difference more than ever to corporate and investment strategy. The organisations that win will be those that prove value fast (linking initiatives directly to EBITDA), harness technology, including GenAI, as a delivery accelerator (not as an end in itself), and adopt execution models that ensure accountability, speed, and transparent impact tracking. McKinsey analysis shows that companies adopting accelerated performance transformation can improve EBITDA by more than 500 basis points within the first year, and capture up to 70-80% of total impact in under two years, proving measurable value at pace.
Our experience shows that true value creation comes from turning plans into measurable impact. Operating partners who embed disciplined execution, track impact rigorously, and build lasting organisational muscle unlock EBITDA and Enterprise Value, while positioning their companies for sustained growth and stronger exits.
Find out more at orphoz.com