Is Your Investment Thesis Wobbling? A Private Equity Portfolio Tactical Growth Framework

 

Private equity investors don’t lose sleep over bad quarters—they lose sleep when the investment thesis starts to wobble. You underwrote a clear path to value creation: revenue acceleration, margin expansion, and multiple arbitrages. But now? Growth is stalling. Forecasts are slipping. Management teams are explaining rather than executing. As I shared in my post Introducing the Modern Private Equity Portfolio Performance Framework. The Private Equity firms and portfolio company leaders who built their strategies around the old model are still waiting for it to come back. No-Smoke-and-Mirrors Insight: It is not coming back. Now that we have the overall framework, we need a Private Equity Portfolio Tactical Growth Framework.

The firms and leaders who are winning today have already moved. They have replaced financial engineering with operational discipline. They have replaced multiple expansion hopes with margin expansion plans. They have replaced leverage with leadership.

The Modern Private Equity Portfolio Performance Framework shares the key pillars of our strategic growth plan. After sharing the model, we have been perfecting for years I received some feedback: “ Mark I understand your framework from a strategy perspective, but you need to put some meat on the bones, what are the tactics you use when a portfolio company is not meeting the value creation plan?”

 

This article covers the tactical motions that support the performance framework pillars we shared previously.

 

If one or more portfolio companies are missing value creation targets, the issue is rarely “market conditions.” It’s almost always a breakdown in alignment, execution, or visibility.

What is a practical, tactical, operator-focused PE Investor and portfolio company alignment activities to support the framework to stabilize performance, restore confidence, and position for a strong exit.

What are the steps of the  Private Equity Portfolio Tactical Growth Framework?  

Step 1: Revalidate (or Rewrite) the Investment Thesis

Before pulling operational levers, answer a harder question: Is the original thesis still valid? It may be. Or due to the rapid change and market uncertainty, we have new information. We may have new players in the portfolio company. Do these leaders understand, agree with, and have the skills to execute our value growth plan?

Start with three diagnostic lenses:

• Market Reality Check

  Has demand shifted? Are customers buying differently? Has competitive intensity increased? Are there new market trends to consider?

• Value Creation Logic

  Were your assumptions about pricing power, cross-sell, leadership, and team skills, or expansion overly optimistic?

• Timing vs. Truth

  Are you early—or wrong? Did you write an excellent strategic growth plan to scale that no longer fits this portfolio team, its customers, or market trends?

Action: Rebuild the thesis from the outside in.

Talk to customers, lost deals, and frontline salespeople—not just the executive team. Conduct market research, voice of customer interviews, and win-loss analysis.  If needed, rewrite the thesis with updated assumptions and a sharper focus. ( it’s ok! Better you update it now than have uncomfortable conversations two years from now with your LPs.)

 

Step 2: Diagnose the Growth System (Not Just the Numbers)

Most PE firms look at lagging indicators: revenue, EBITDA, pipeline. That’s not enough today-sorry.

You need to evaluate the strategic growth system—the set of capabilities that produce results consistently.

Break Growth System into six components:

1. Market Focus – Are we targeting the right segments with a compelling value proposition?

2. Go-to-Market Strategy – Is there a clear, differentiated path to win deals?

3. Sales Skills and Execution – Do reps have the skills, process, and discipline to convert?

4. Marketing Effectiveness – Is demand generation producing qualified opportunities?

5. Customer Expansion – Are we maximizing lifetime value post-sale?

6. Motivation – is the team motivated? How are they motivated?

Action: Run a rapid “growth audit” across these five areas.

Identify where the system is broken—not just where the numbers are down. Depending on the size of your team, we can have this data in 4 weeks.

 

Step 3: Fix the Biggest Constraint First

Trying to fix everything at once guarantees failure. As adding an ERP system or a CRM can create disruption and even further sales declines, we do not want to make several changes all at once.

I am a huge fan of the theory of constraints. I often revisit the book Goldratt’s Theory of Constraints: A Systems Approach to Continuous Improvement.  (I believe my coach gave me in the last 1990’s.and still applies today)

Instead, apply constraint-based thinking:

• If the pipeline is weak, → Fix demand generation, marketing strategy, and execution, sales prospecting skills, and ICP clarity

• If win rates are low, → Fix sales messaging, discovery qualification, and closing skills

• If deals stall → Fix sales process, sales urgency skills, update your value proposition, and decision navigation

• If growth is unprofitable, → Fix pricing, value selling capabilities, and deal discipline

Action: Pick the single biggest constraint to growth and attack it aggressively for 60–90 days.

 

Step 4: Align Leadership Around a Simple Growth Plan

Many portfolio companies suffer from complexity masquerading as strategy.

 

It feels like a lot of data gathering at the beginning, and in some cases, it is more than teams have ever done before. However, gathering the right actionable insights is the key to strategic growth plans that deliver value growth. Once the plan is in place, we actually move very quickly.

The no-smoke-and-mirrors sales enablement process is not complex. 

You don’t need a 40-page plan—you need alignment.

A strong PE-backed growth plan should answer:

• Where will growth come from? (segments, products, geographies)

• How will we win? (clear competitive differentiation)

• What must change in execution? (specific behaviors, not slogans)

• What are the 3–5 priorities for the next 90 days?

Action: Force clarity.

If the leadership team can’t explain the growth plan in 10 minutes, it’s too complicated.

No smoke.

No Mirrors

Just Strategic Customer Focused Execution.

 

Step 5: Upgrade Sales Management (The Hidden Lever)

In underperforming portfolio companies, the issue is often not the sales team—it’s sales management. In B2B sales, we find that less than 50% of salespeople have received sales skills training. Even fewer sales managers have received sales management training. Often, the sales manager was once a top sales performer and was asked to lead the team.

Common B2B sales manager gaps:

• No consistent deal inspection

• Weak or no coaching

• Forecasting based on hope, not evidence

• Activity without accountability

• Never trained to lead or motivate salespeople

Action: Install a disciplined sales management cadence:

• Weekly pipeline and deal reviews (fact-based)

• Defined sales stages with exit criteria

• Coaching tied to real deals

• Clear performance metrics

• Train the sales manager on how to lead and motivate

This is where growth becomes predictable.

 

Step 6: Build a Conversion Framework (Not Scripts)

Many teams respond to missed targets by adding scripts or pushing harder. In our no-smoke-and-mirrors sales training, we teach salespeople conversation intelligence and how to create conversations that drive revenue. In our application exercises ( role plays), we create sales conversations, each salesperson must build their own conversation elements following the course instructions.

Sales scripts rarely work.

Top-performing portfolio companies’ sales teams use conversion frameworks:

• Clear problem definition tied to business impact

• Structured discovery

• Quantified value articulation

• Decision mapping across stakeholders

• Identify the desired outcome and the financial impact

Action: Standardize how deals are won.

Train, reinforce, and inspect against the framework.

 

Step 7: Create Visibility with Leading Indicators

You cannot manage what you only measure after the fact.

Shift from lagging to leading indicators:

• Pipeline creation (by segment and quality)

• Conversion rates by stage

• Sales cycle length

• Average deal value vs. target

• Customer acquisition cost vs. lifetime value

Action: Build a simple dashboard that shows whether future revenue is improving—not just past performance.

 

Step 8: Drive Accountability Through Operating Rhythm

Turn strategy into sales execution through cadence:

• Daily huddles

• Weekly: pipeline, deals, activity

• Monthly: performance vs. plan, constraint review

• Quarterly: strategy refinement

Action: Make performance transparent.

What gets inspected gets improved.

 

Step 9: Evaluate Talent Honestly

Sometimes the hardest truth: The sales team that got you here may not get you there.

In one example, we assessed a large sales team and found 20% of the salespeople lacked the will to sell, were not motivated to sell, and were not coachable or trainable. I am not sure how they found their way to the sales team, but there was a direct correlation between wanting to be in a sales role and sales growth performance.

In other sales team scenarios, we find salespeople who have some fundamental sales skills but lack advanced selling skills such as sense-making, designing and building a business case, strategic negotiation, and so on. When we identify skills gaps in key sales competencies we desire, we prescribe training and coaching.

In non-sales and other leadership and management roles, we see the Peter Principle at work. Once top sales performers are in a sales management role, there is no training and no delivery of the value we expected. We have also found that senior leaders lack the skills and motivation to execute the value growth plan. On several occasions, they are in senior roles based on time served rather than ability. In one case, I remember vividly, I was told one of the senior leaders was made CRO to justify their compensation.

We also want to ensure that senior leaders and mid-level managers are aligned and share a high degree of trust and respect.

Assess Sales Effectiveness:

• Can the CEO lead through scale and change?

• Does the CRO understand modern B2B growth systems?

• Are sales managers capable of coaching, not just reporting?

• Do salespeople have the sales skills, mindset, and beliefs to execute our value growth plan?

Action: Train and upgrade talent where needed—decisively but thoughtfully.

 

Step 10: Rebuild Momentum (Fast Wins Matter)

Turnarounds require belief.

Identify 2–3 initiatives that can produce visible results within 60–90 days:

• Repricing key offerings

• Refocusing on the highest-converting segments

• Re-engaging stalled opportunities

• Launching targeted outbound campaigns

• Relaunching a product or service focused on the financial outcomes it delivers, not features and benefits

Action: Create early wins to rebuild confidence across the organization—and with your investment committee.

 

The Private Equity Portfolio Tactical Growth Framework (Summary)

When a portfolio company is underperforming, follow this sequence:

1. Revalidate the thesis

2. Diagnose the growth system

3. Fix the biggest constraint

4. Align leadership on a simple plan

5. Upgrade sales management

6. Implement a conversion framework

7. Track leading indicators

8. Establish execution cadence

9. Evaluate talent

10. Drive quick wins

 

Final Thought on Private Equity Portfolio Tactical Growth Framework

A wobbling investment thesis is not a failure—it’s a signal.

The best PE firms don’t react emotionally or superficially. They go deeper into the system, find root causes, fix what’s broken, and emerge with a stronger, more scalable growth engine.

Because in the end, value creation isn’t about forecasts.

It’s about building a business that predictably delivers them.

Let’s schedule a call and dicuss how our Private Equity Portfolio Tactical Growth Framework can help your team.