Many who know me or have worked for me are aware of my penchant for strategic planning. I consider it a critical component of the success of any organization, and believe in the value of planning for a company’s needs over multiple time horizons, as well as reviews against that plan at regular intervals. So it may come as no surprise that I would write about this subject. I recently worked with several colleagues at McKinsey on an article detailing what successful private equity strategy planners can teach public companies.
As one example, quarterly earnings are obviously an important reflection on how a company is doing. But perhaps too often, they also reflect a focus on short- and medium-term growth horizons. It is my belief that long-term shareholder value also depends heavily on the third horizon, which is long-term growth.
I was pleased to work with Matt Fitzpatrick and Karl Kellner on this piece. We hope you’ll find value in our discussion on how public companies may benefit from aspects of private equity, including a governance approach that is deeply attuned to business unit strategy, a rigorous review of operations with an eye toward improvements and restructuring, and active ownership of results.