Following an acquisition, there is typically a compelling value creation plan on the table. Revenue should be increased, profitability improved, procurement optimized, the organization restructured, and systems unified. Often, acquisitions, internationalization, and AI adoption are added to the mix. There is usually no shortage of plans. The real challenge begins when deciding who will execute all of this alongside day-to-day operations.
Operational Development Drives an Increasing Share of Returns
Value creation in private equity previously relied more heavily than today on financial leverage, favorable financing markets, and rising valuation multiples. Now the focus has clearly shifted to operational development of companies.
Nordic Capital estimates that approximately ten years ago, operational improvements generated roughly half of the value created in its portfolio companies. Today, the share is already close to 80 percent. At the same time, the firm emphasizes that the best results come from people with industry knowledge, practical management experience, and their own P&L responsibility. (Nordic Capital, July 15, 2026).
Alvarez & Marsal’s European study reveals the same shift from another perspective. According to the study, profitability improvement accounted for 51 percent of EBITDA growth in European private equity exits in 2025. In exits before 2023, the corresponding share was only 21.5 percent. The study is based on responses from over 200 private equity professionals and portfolio company executives, as well as analysis of completed exits. (Alvarez & Marsal, European Private Equity Value Creation Report 2026).
The conclusion is clear: growing a company’s value depends more than ever on what is actually achieved in the business.
Why Do Good Plans Fail to Materialize?
The same Alvarez & Marsal study highlights a concerning figure: 65 percent of respondents reported that value creation programs developed over the previous two years had achieved less than half of the targeted benefits. This is not necessarily due to poor strategy or incompetent management. Often the problem is management capacity.
The portfolio company’s CEO and executive team must simultaneously take care of customers, personnel, cash flow, quality, and daily operations. Following an acquisition, they are also expected to execute the integration, redesign reporting, identify synergies, build a new organization, and achieve the owner’s performance targets. When ten important projects are on the table at once, none of them may receive sufficient attention.
According to Nordic Capital, the greatest constraint on change is often not a lack of ambition or expertise, but the limited attention of management. Therefore, one of an active owner’s most important decisions is to define what will be done now and what will not yet be done. A simple test is useful: if a project is not significant enough for the board’s agenda, is it worth burdening the organization with it right now?
Execution Should Begin Before the Acquisition
Assessment of operational execution capability is becoming part of M due diligence.
Alvarez Marsal’s study published in August 2026 is based on insights from over 80 European private equity professionals. Ninety-three percent of respondents reported examining value creation opportunities during the due diligence phase. Approximately 60 percent emphasized more strongly than before the assessment of risks and potential negative developments. (Alvarez Marsal, European Due Diligence Report 2026).
Yet only 18 percent felt they received a fully integrated due diligence package from advisors, where commercial, financial, and operational findings combine into an actionable plan.
This is a significant gap. A financial model can show how much procurement, pricing, or production should improve. It does not yet reveal whether the current organization can execute the change, who is responsible for it, or what must be done in practice during the first hundred days.
According to the study, 58 percent of private equity firms already deploy the resources needed for value creation during the first hundred days. A year earlier, the share was only 29 percent. The window between planning and execution has therefore shortened rapidly.
The Execution Capability Problem Does Not Only Concern Private Equity Portfolio Companies
In Heidrick Struggles’ study, 90 percent of European CEOs and board members estimated that their company’s strategy or operating model would change in the coming years. At the same time, 38 percent saw a gap between the capabilities the company will need in the future and the current CEO’s strengths. In the Nordics and Benelux, approximately half of respondents assessed this to be the case. The study included 1,033 CEOs and board members, of whom 299 were from Europe. (Heidrick Struggles, Route to the Top Europe 2026).
This does not mean that current management has failed. The company may simply be moving into a situation where different experience is needed than before.
A growth-phase leader is not always the right person to execute a turnaround. An organization that has succeeded in domestic markets may not know how to lead an international integration. A good operational leader may in turn need someone alongside who has previously executed a carve-out, a major profitability program, or centralization of functions. The management structure should follow strategy – not the past.
An Interim Manager Brings Ownership to Change
In Finland, an interim manager is still often thought of as a replacement for an absence or sudden leadership change. That is only one use case.
An experienced interim manager can be brought into a company to take full responsibility for a defined, business-critical change. The assignment may be, for example: post-acquisition integration, carve-out and building an independent organization, profitability improvement program, procurement or supply chain transformation, finance function and reporting development, production optimization, building a new commercial operating model, transformation program PMO leadership.
An interim manager does not replace a functioning executive team. He or she temporarily adds management capacity, experience, and clear accountability to the organization precisely when they are needed most.
He or she carries no baggage related to defending old structures and no need to optimize the next internal role. Success is measured by what is accomplished within the agreed timeframe.
The critical question is not what should be done. In most companies, people know quite well where the greatest development opportunities lie. The challenge is to select the most important actions, assign a responsible leader to them, and ensure sufficient execution power.
Therefore, the board, owner, and CEO should ask three questions in connection with the value creation plan:
- Which two or three projects will have the greatest impact on the company’s value?
- Who has personal overall responsibility for them?
- Does he or she genuinely have sufficient time, experience, and authority to execute them?
If the last question cannot be answered convincingly, the problem is no longer in the plan. It is in management resources.
Execution Always Requires a Person
A value creation plan does not execute itself. Ultimately, a person is always needed who takes responsibility for it and sees it through to completion.
Cherry Group helps companies and owners quickly find experienced interim managers for transformation programs, post-acquisition integrations, carve-out situations, profitability improvement, and leadership of finance, procurement, production, and commercial functions, among others.
