You Can’t Cut Your Way to Alpha Without Going Back to Basics

Why Operational Excellence Deserves a Seat at the Deal Table

Cost-cutting is not value creation. Yet too often, operational performance is treated as a post-close clean-up job — rather than a core lever to build real alpha from day one.

In today’s private equity environment, where pressure on margins is intensifying, hold periods are stretching, and talent is increasingly scarce, many firms are beginning to realise a hard truth: you can’t afford to overlook how the business actually runs. Operational complexity, bloated SKUs, inefficient layouts, and unclear roles quietly erode value while remaining invisible in traditional deal models. This article makes a bold yet grounded case: Operational Excellence deserves a seat at the deal table.

Written by André Smaal and Robert Vrugtman, two senior leaders at TBM Consulting Group Europe, this piece walks through the practical, often-missed basics that drive real portfolio performance, from aligning commercial and operations before day one, to simplifying product portfolios, to tackling complexity where it hides: in flow, routines, and decision-making.

Key Insights for PE Professionals:

• Operational excellence must start pre-close. Walk the floor, observe flow, and sit in on planning meetings — the most revealing due diligence isn’t always in the boardroom.
• Cost-cutting ≠ value creation. True alpha comes not from trimming headcount, but from optimising flow, standardising work, and rethinking execution at its core.
• Complexity is the real enemy. What slows down EBITDA isn’t always on a P&L. It’s the invisible weight of overdesigned processes, mismatched sales promises, and firefighting operations.
• Going back to basics is a competitive advantage. Clarity, consistency, and execution discipline are the building blocks of scale — and they rarely show up in spreadsheets.

From day-to-day routines to investment strategy, operational clarity is no longer optional. The firms that consistently outperform are those that engage with it early, embed it deep, and use it as a multiplier throughout the hold period.

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For private equity dealmakers and operating partners looking to unlock deeper value in their portfolios, this article offers clear, field-tested guidance, not just theory. Download the full article now.