Optimizing Sales Effectiveness for Portfolio Companies

A lot of you are probably familiar with the concept of “flipping” houses.  If you aren’t this is where someone buys an undervalued property, makes improvements through sweat equity and capital, and sells it for profit. This concept is what many Private Equity Firms around the world are doing, but they are doing it with companies.   There are some good companies out there that have quality products and services, but aren’t run as efficiently and effectively as they can be.   In the last 10 years, I have seen PE Firms change their focus to become more hands on with their portfolio companies.  Installing operational processes across a PE Firm’s portfolio can make it easier to manage the companies under their wing.

The most critical factor following venture and private equity investments is whether the portfolio company will consistently meet its EBITA targets.  In many cases, companies that have attractive product and service offerings may be immature with respect to sales process, methodology, and operations.  In my experience working with numerous portfolio companies, in many cases they:

• Have not defined rigorous recruiting and talent assessment models
• Have not invested in scalable sales process and methodology approaches
• Have not educated sales people and managers on effective selling techniques
• Have not developed reliable pipeline management and forecasting disciplines
• Have not integrated sales process and methods into technology enablers

The result can be unpredictable quarter-to-quarter revenues and sub-optimal revenue and profitability growth. 

That’s why more PE Firms are actively getting involved with how their portfolio companies engaging differently with their customers and differentiating from their competition.  Having a process in place that is aligned with the changing buyer landscape is going to be crucial for 2012 and beyond.

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Comments

[360training.com]

Certain outsourcing professional services actually has been doing their part in optimizing an effective sales portfolio on their end.