A value creation plan sets out how a company will become more valuable over a defined period, usually a private-equity hold of three to five years. It names the initiatives, sizes each one in EBITDA and cash, puts them in sequence and assigns them. Sponsors typically write one at the deal; the good ones revisit it every year.
What a sound plan contains
A starting point everyone accepts. A small number of initiatives, typically two to four that matter, each with an owner, an investment and a return. The capabilities the company must build, buy or partner for. A handful of numbers that show early whether the plan is working. And the assumptions it rests on, with the signal that would tell you one has broken.
Why plans go stale
The plan is usually written at close, by the deal team and its advisers, from due-diligence material. It may well be right on that day. Then the market moves, a competitor acts, an assumption breaks, and nobody re-tests the document. Two years in, the sponsor is holding management to a plan management did not write and no longer believes.
Authorship decides it
The plans that get delivered are the ones the portfolio company's executive team built, with the sponsor testing and approving rather than drafting. People defend what they wrote when the first quarter goes sideways. They explain away what they were handed.
How we build it
We facilitate the executive team through a fixed sequence: assumptions, direction, where profit comes from by product and market, the market's view from outside, capabilities, Strategic Numbers, then the funded project portfolio. That last step is the value creation plan. Because the earlier steps sit underneath it in the MOVE® system, a change in one assumption shows what else must change, and the plan can be re-tested in days.
Monday
Ask the CEO of your portfolio company which initiative in the plan they personally argued for. If the answer takes a while, you know who wrote it.