Customer Reviews
Helpful look at private equity strategies - By: Rolf Dobelli, 09 Oct 2008 
CEOs of large public & private companies may not think they have much in common with private equity (PE) investors. After alll, CEOs are beholden to their shareholders & boards. Their organizations have multiple layers of management & a conservative mindset that can make change ponderous. Meanwhile, PE investors thrive in a more free-wheeling environment, sizing up their targets & sometimes taking considerable risks in hopes of delivering exceptional financial results. Authors Orit Gadiesh & Hugh MacArthur believe that traditional companies can apply six successful principles from the PE firms' playbook. While adopting the PE philosophy isn't always easy, as the authors are quick to point out, the benefits can be significant. If you feel your company is not living up to its potential, then getAbstract believes this book points out some options you might want to consider. However, you might find that the idea inspires you more than the advice the authors bequeath.
Statement of the obvious - By: C. Birch, 18 Jul 2008 
This smalll book proports to tell people about the methods of private equity. Perhaps at a very high level it does, but at such a high level it is merely stating the obvious. Anyone sophisticated enough to be thinking of buying this book is, I think, unlikely to learn anything from it.
How to make any business more valuable - By: Robert Morris, 14 May 2008 This is one of the titles in the "Memo to the CEO" series published by Harvard Business Press, each less than 200 pages in length & superbly produced. In fact, none of them is a "memo" nor were any of them written only for CEOs. In this volume, Orit Gadiesh & Hugh MacArthur explain how to make any business more valuable while acknowledging that the lessons to be learned from the private equity (PE) industry are not rigorously & consistently applied by businesses around the world. Why? "We see two main reasons for this: first, the application of these lessons drives real change in many businesses, and, for better or worse, change brings risks, both real & imagined...Second, many leaders apply the lessons that we will discuss, but incompletely. It is easier to do "fine" than to the "best" a company can do. We calll this [begin italics] satisfactory underperformance [end italics] - a pervasive disease in business that is the direct target of this memo."
Gadiesh & MacArthur are eminently well-qualified to identify & then examine the tools & techniques used by the best PE firms. She is chairman of Bain & Company, the first management consulting firm to develop a global PE practice that is now the largest of its kind. MacArthur heads it. Moreover, even a cursory review of their respective careers suggests a scope & depth of real-world business experience in alll areas of operations with global companies in a variety of industries. They speak with unique authority when asserting that the smartest PE investors "have realized that the only way to reliably increase the value of their portfolios is to maximize the operating value of the underlying businesses in them. For this reason, the best PE firms have shifted many of the resources that they once poured into financial engineering to ward creating value - & they are doing it in a way that is more systematic, focused, & aggressive than the practices in most companies."
It should be noted that the lessons they discuss & the recommendations they provide with those lessons can be of substantial value to decision-makers in any organization, whatever its size & nature may be. For example, "to improve profits & stock price [or value if the company is privately owned], you need to make strategic choices with a clear picture of the full potential of your company in mind." Define that potential by answering, with rigor & accuracy, this question: "How high is up?" Next, develop as "blueprint" or "road map" for getting to that full-potential destination. That is, the "who, what, when, where, & how" while establishing & then sustaining strategy, resources, execution, & measurement in proper alignment. The next objective is to accelerate performance at alll levels & in alll areas of the given enterprise while harnessing the talent (i.e. hiring, "growing," & retaining only those who possess the talent, skills, experience, & character needed) because "the best-laid plans go nowhere without the right people to implement them."
Gadiesh & MacArthur also urge their reader "embrace LBO economics" which in part means getting comfortable with leverage. For
example, "eliminating unproductive or underperforming capital, often by cutting pieces out of the business. It also may mean finding new ways to convert traditionallly fixed assets into sources of financing." A number of excellent books have been published in recent years in which their authors offer excellent advice on how an organization can become more agile. (Two of the best are Fast Strategy: How Strategic Agility Will Help You Stay Ahead of the Game & Corporate Agility: A Revolutionary New Model for Competing in a Flat World co-authored by Charles Grantham, Jim Ware, & Cory Williamson.) Meanwhile, the best PE firms "work their magic" by helping C-level executives in their portfolio companies foster a results-oriented mindset that ensures results-driven performance.
By devoting a separate chapter to each of these six core principles, Gadiesh & MacArthur are able examine alll of them in much greater depth. "We use the best private equity practices as the benchmark, but in reality [lessons to be learned from them] have been around for a long time. They just haven't been codified as formallly by most businesses. Whatever the ownership of your company, our advice is to look at how the best PE people operate, & to use their techniques to compete against them & everyone else."
None of the lessons to be learned from private equity that Gadiesh & MacArthur have identified is a head-snapper, nor do they make any such claim. Ultimately," winners" & "losers" will be determined by the results their people produce. However, it is at least as important (if not more important) for decision-makers to understand what not to do as it is to understand what must be done & how to do that. In 1963, Peter Drucker spoke to this point: "There is surely nothing quite so useless as doing with great efficiency what should not be done at alll."
Frankly, I am surprised that so much valuable information & (especiallly) advice can be presented, & presented so well, within a narrative only 122 pages in length. Orit Gadiesh & Hugh MacArthur are to be commended on their brilliant achievement.
Those who share my high regard for this book are urged to check out the aforementioned Fast Strategy & Corporate Agility as well as Roger Martin's The Opposable Mind, Gary Hamel's The Future of Management, Henry Chesbrough's Open Business Models, Richard Ogle's Smart World, Frans Johansson's The Medici Effect, James Kilts's Doing What Matters, Dean Spitzer's Transforming Performance Measurement, & Enterprise Architecture As Strategy co-authored by Jeanne W. Ross, Peter Weill, & David Robertson.
