The Holy grail for private equity is to find a business you can grow rapidly and viably. One area of growth that private equity (and everyone else) cannot ignore is the power of Digital Transformation. OK, that sounds a little like the start of a super-hero film but give this a moment.
Actually, a superhero doomsday setting isn’t that far off the mark. It’s a fact that a huge number of businesses are not prepared for the digital age. They don’t have a digital strategy and azure devops they are going to will fail more frequently, more quickly as all tasks of digital marketing and digital buying continue to be felt.
So what does that mean for private equity firms? First and foremost, there are going to be some pretty good deals out there soon, but only for firms that understand the facility of Digital Transformation. Rather than growing value through acquisition and better management, prudent firms can target companies that can’t figure out how to transform their feature or processes to lower your costs, gain more market share, and profit through digitization. Turning around these companies might be as simple as instituting a CRM system, or putting up a very strategic transactional website to attract and convert more visitors. These are going to be the Private Equity Rockstars in the coming years. But that is the future — it’s now that counts.
The private equity firm that starts Digitally Adjusting now is going to be way killing the curve. Look at the possibilities, the CRM, the strategic website, but look up, way up — two words: mission and vision. Think of the most effective companies on earth and guess what happens their vision is. Apple’s vision is to provide their customers with endless tech toys that all link together faultlessly. Netflix is all about bringing you endless entertainment for a monthly fee — and supper the cable companies along the way. U. S. Steel is — steel. Nothing fires up a company more than knowing who it is and where it’s going.
This is an area that Digital Transformation does a great job at — adjusting a company through vision. And in this case the vision is not a core principle — but the idea that the core principle needs to be transformed. Digital Transformation is about taking a company and growing earning while you move the company into the 21st century. And that is exciting! Not only does it mean employees enjoy their work more as you eliminate duplication and admin work, but it conveys to everyone a new sense of purpose. Digital Transformation is really about changing How a company operates and not necessarily WHAT it does. Steel is steel — but that doesn’t mean U. S. Steel can’t digitally transform.