Transformation Management Office starring Naresh Kumar

Welcome to another episode of 100 Days and Beyond with Naresh Kumar, Co-founder and managing partner at Operating Bridge Partners.

He is a result-oriented leader with almost two decades of operating, M&A and advisory experience with global investors, blue-chip brands and tier-1 consulting firms. He provides leadership to corporates as an 'accountable' Executive and concurrently leads the design/execution of 'Value Creation' plans as interim operator/advisor.

Background

Naresh Kumar's first role was designing aerospace structures. As an engineer, he loved managing complex projects, supply chain issues, managing people and working with people. So, he got involved in the supply chain management and moved to Dubai to set up first captive offshore centre for Atkins.

After that, he moved to the US for MBA from Purdue University. And post graduation, he started his management consulting journey in 2009 and has first-hand seen rise of operational value creation, growth equity and ESG within Private Equity. He worked with Accenture and Deloitte until 2016 providing hands-on M&A, Transformation and Performance Improvement support to clients. Thanks to consulting career, He is experienced in various industries with deep spikes in Private Equity, Business & Financial Services, Healthcare and Products.

Since 2016, Naresh has been an executive interim working directly with investors and their portfolio companies in senior advisor and operator roles.

Operational value creation

There are 6000+ private equity & debt investors each with a unique investment thesis such as control equity, sectoral focus, special situations, Buy-Build and Carve-Out etc. Since 2008 financial crisis, capital has been cheap and PE firms are prioritising operational value creation to realise alpha returns. Operational focus also enables PE firms to differentiate themselves from competition both in-terms of both winning pre-deal auction and realising post-deal value creation plan on sustainable basis.

Post-signing, Exit value is primary success metric in the PE industry. In-terms of portfolio support and monitoring, there are two related but distinct worlds within a typical PE firm:

1. Investment professionals with corporate finance background responsible for investment thesis, sourcing right deals and later monitoring the performance of fund portfolio

2. The other is in-house operating partners who primarily work with portfolio companies to realise the operational value creation thesis.

Naresh says that businesses are all about people, as they are the core assets. If you lose people, then you lose revenue and profit especially in knowledge industry sectors such as business services. The secret to successful re-pivoting towards target state is injecting A teams to win hearts & minds and driving collaboration across different businesses units, markets and functions.

Due to lack of above, c84% of transformation programmes fails jeopardising future-proofing of business model. As a result, a lot of mature private equity firms have been using Transformation Management Office(TMO) lever to turn 'bold' vision into reality and realise 'full' potential of PE value creation plan.