Value Creation Plan (Lever Categories and Execution Rate)
When you need this method
The diagnosis is done, the bottleneck named, the list of measures written. Six months later nobody can say which item was actually carried out. What gets reported is the outcome, revenue and margin, which arrives late and is confounded by everything else. That makes it impossible to tell whether the chosen lever failed or was never pulled. The meeting then turns into an argument about strategy when the real question is one of execution.
Approach
- 1Before the start, put every intended measure in writing as a named action item rather than an intention. An action item is worded so that an outsider can later check whether it is done.
- 2Assign each action item to exactly one category: operational improvement, top-line growth, governance, cash. The source's fifth category, financial structure, sits outside an operating mandate and is explicitly marked as beyond your reach.
- 3Cap the number of action items per category. The source shows that action items within the same category crowd each other out: the more items a category holds, the less often any single one gets done.
- 4Give every action item a named owner, a measurable target and a date. Two owners mean none.
- 5Report quarterly on execution status per action item, not on the outcome: done, partly done, not started.
- 6Track the execution rate as a metric in its own right, split by category, and place it next to the outcome figure it is supposed to move.
- 7When the rate is low, first check capacity, ownership and the length of the list, and only then question the strategy.
Typical application
A typical B2B SaaS in the HR space, around 12 million euros of recurring revenue, receives a list of 31 measures after a majority investor comes in. Two quarters later revenue is flat and the board argues about strategy. Instead, the management team sorts the list into the four categories and counts: 19 of the 31 items sit in operational improvement, three of them are done and eleven have not been started. The list is cut to twelve items, each gets an owner and a date, and the quarterly format switches to execution status. In the following quarter the rate reaches two thirds. Only then can the team say which levers genuinely failed and which were simply never touched.
Limits and counter-indications
The evidence comes from 1,580 investments across twenty emerging markets, mostly growth deals averaging 13.4 million US dollars. Carried over to a Western European software portfolio, that is an analogy and not proof. The link between execution and returns is a cross-sectional finding, not a causal one, and the execution data comes from what the funds themselves reported to their investors. The rate can be flattered by loading the list with easy items: according to the source, management changes, buying or selling assets and cost reductions are almost always achieved, while market share gains, add-on acquisitions and international expansion are much harder. The method also does not tell you which lever is the right one; the source explicitly finds no single strategy that predicts higher returns on its own. Without a diagnosis upstream it merely tidies an arbitrary list. And without an owner who can actually enforce it, the rate becomes a reporting duty with no consequences.
How to measure impact
Track a quarterly execution rate, the share of action items completed, split by category, alongside the number of action items per category. Place that rate next to the outcome figure the plan is meant to move.
Related methods
Tools for this
Sources
- 1.Biesinger, Bircan, Ljungqvist: Value Creation in Private Equity, EBRD Working Paper No. 242 (opens in a new tab) · European Bank for Reconstruction and Development, Office of the Chief Economist · 2020-04 · academic and scholarly literature · describes the methodCarries the procedure itself: the plan is written before the investment, consists of named action items (23 distinct items, 4.5 per plan on average) and is sorted into five categories, namely operational improvements (84 percent of the plans analysed), top-line growth (74), governance engineering (48), financial engineering (35) and cash management (14); an average plan spans 2.5 categories. Execution is tracked item by item through confidential quarterly reports to investors. It also establishes crowding out within a category: an action item is less likely to be achieved the more other items of the same category the plan contains, which the authors read as a capacity constraint, and they find diminishing returns to ever more detailed plans. Limit: 1,580 investments by 171 funds across 20 emerging markets from 1992 to 2017, mostly growth deals averaging 13.4 million US dollars; plan content coded for 1,136 investments; execution data comes from the funds' own reporting.
- 2.Biesinger, Bircan, Ljungqvist: Value Creation in Private Equity (Kurzfassung der Autoren) (opens in a new tab) · Harvard Law School Forum on Corporate Governance · 2020-06-05 · academic and scholarly literature · evidence of effectivenessCarries the effectiveness finding in the authors' own summary: returns are explained not by the ex ante selection of strategies but by the successful implementation of the chosen ones; the categories actually achieved predict realized returns better than the ones planned, and no single strategy is associated with higher returns on its own. Limit: this is a cross-sectional association from the same emerging-markets sample, not causal evidence, and it says nothing specific about German-speaking software companies.
- 3.Growth Shuttle: The 100-Day Value Creation Plan, An Operator's Playbook (opens in a new tab) · Growth Shuttle · 2026 · practitioner source · describes the methodCarries the operating layer the study does not describe: three to five initiatives per window, each with exactly one named owner holding a measurable target, a deadline and the time, budget and authority to deliver, plus a fixed rhythm of weekly, monthly and quarterly reviews with defined decision rights. Limit: consulting practice with no data of its own; the range of three to five initiatives is experience, not measurement.
- 4.Gompers, Kaplan, Mukharlyamov: What Do Private Equity Firms Say They Do?, Harvard Business School Working Paper 15-081 (später Journal of Financial Economics 121(3), 2016) (opens in a new tab) · Harvard Business School · 2015-04 · academic and scholarly literature · provides the contextProvides context on what investors themselves say about value creation: a survey of 79 firms with more than 750 billion US dollars under management. Before closing, increasing revenue is named as a source in over 70 percent of deals and cost reduction in only 36 percent; after the investment, cost reduction rises to 47 percent. This supports the category logic but not the execution rate. Limit: self-reported survey data, no analysis of actual plans and no record of what was implemented.
Origin: Biesinger/Bircan/Ljungqvist (EBRD)