PE-owned portfolio businesses - Make your annual planning session count
For a private equity (PE)-owned business, a well-designed planning session for the year ahead can deliver more than just a "plan"
The last quarter of the year is the high season for finalising budgets and business plans. Having had the opportunity to deliver a number of leadership events around this time, I have seen first hand how valuable the session is for getting the team ready to inspire, mobilise and implement.
A planning session for a PE-owned business has the same intent as one in a corporate organisation: to get ready for next year. It does, however, come with a number of different considerations. Having worked with many PE-owned portfolio businesses, I have shared below some observations, which might help to shape a productive and impactful planning session.
A defined horizon. I have often explained to management teams working with PE investors for the first time that when an investor plans to hold a business for five to seven years, every quarter matters and every month counts. In PE terms, one year is a long time. This does not mean rushing; it means accelerating with a sharp focus. The annual conversation is therefore one key chapter of a longer story.
A team to be aligned. Ownership changes often bring new leaders, and with them new expertise, new expectations and new ways of working. There will be different assumptions, different decision-making habits and different interpretations of what "fast" and "good" mean. There is also varied experience of how PE investors work. The new team needs to work with colleagues who have been in the business much longer. That makes intentional and honest alignment at the planning session necessary.
Prepare for change. Most PE-owned businesses have ambitious growth plans, which often involve step changes. These changes may depend on capabilities the team does not yet have, or on some redesign of the operating model, for better profitability and for more sustainable value drivers at exit. Very likely, it will be more than doing the same things better. It can also mean the team will need a new mindset and commitment to the (new) ambition. With so much competing for attention and effort, the team needs to be ready for the changes, be clear on where to focus and what major risks to mitigate collectively.
A busy Q4. This is the commonly overlooked factor. Budgeting is under way and year-end reporting is close, or follows in Q1. All of this takes capacity, while the team is also running the business and making the growth plan happen. (And that is even before factoring in that the team might also be busy planning for the holidays!) That makes a well-thought-through planning session a must, because it can help to lay the foundation for a stronger start in the new year and fewer last-minute siloed changes to the plan.
Basically, a PE-owned business has a team making many changes, large and small, easy and difficult, on a fast-ticking clock, with an understandably involved owner. A good planning session can help to create a team that is aligned and a credible plan that holds together, setting out clear directions and priorities for the organisation, providing a strong foundation for a healthy rhythm of updates, problem solving and celebration.
Making this session happen
The session can take anywhere from half a day to two and a half days, depending on the scope and ambition of the team. It is also common for the planning session to involve some leadership development and team-building elements.
Before the session
Much of a session's value can be created beforehand. Three things could help:
Agree the scope. Pre-session short survey can gauge the expectations of the stakeholders and participants, providing a basis to agree the key topics to address, and how decisions will be made.
Relevant and manageable preparation. All participants, especially the “chiefs” and session presenters, can be briefed separately so that they come prepared. This could include reflecting on the big questions, their concerns and ambitions, and the help they need but feel uneasy asking for. When people arrive having thought about the same questions, they arrive as contributors and not as an audience.
The team must own the agenda. When people have helped shape what is covered, and have prepared to lead some of the sessions, they naturally treat the session and its outcomes as theirs. Ownership matters, not only for implementation but for mobilisation.
All this preparation also builds anticipation and helps everyone take the session seriously.
2. During the session
I like to use an easy-to-follow structure for the session: look back, reflect and learn, then look forward and plan together. The look-back half is not about going through the performance reports. When a management team has just come through a transaction and had a change of ownership, it usually has plenty to share and learn. It can be shaped as a productive reflection, not an assessment, where people share personal learnings and surprises. It is also a chance for team members to better understand each other's experience of the process and align on how to work better with the PE investor.
Three things also need extra care.
Interactive, not passive. A planning session works best when it is active, not a series of presentations to sit through. Yet interactivity does not mean constant discussion in one big group. Time for individual reflection, and conversations in smaller groups, often surfaces what a room of twenty will not. The best sessions move between these: energising, whole-group moments and quieter, more focused ones. It is also important to make time for getting to know the individuals, not as a colleague but as a person. People often discover shared hobbies and interests through that.
"Business-only". It is very common to spend the whole session on initiatives and numbers, and very little on the people, both inside and outside the room. As a plan has to be delivered by people working together, it is definitely worth making time to explore and agree how the team will work together to deliver the ambition: what they need, what to expect, and roughly when things will happen, after all, 12 months, taking away holidays, is not a very long time.
The elephant(s) in the room. Every business has some difficult topics it knows it should address but lacks the bandwidth to tackle right now. Trying to solve "the big elephant" in an afternoon is not realistic, but avoiding it is not ideal either. A guided discussion can help the team examine and decide how urgent and important the topic is, and agree "not now, but here is who will pick it up, and when they will come back". That is a real decision, with a clear owner and a timeline to start addressing it, if addressing it will help to create value for the business.
3. After and beyond the session
Not sustaining the momentum after the session is another common pitfall, and where much of the session's value is won or lost. A good day together that is then deprioritised and forgotten is work and money wasted. A few simple steps can help:
Give each chosen priority a named owner, a 30-day milestone and a deliverable.
Giving the team a chance to think hard about what they need to implement the initiatives will create a more realistic plan. Discovering crucial enablers later would cause delay.
Keep the follow-up light, but make sure it happens. Defining the to-do is important, and so is defining what to expect and, where possible, what the outcome and output might be, so that expectations are set from the start.
Agree a shared milestone a few weeks out, when people will come back together and report on their first steps.
Agree the cadence for updates, ideally part of the regular management meetings. In a fast-moving business, silos form quietly, as different parts of the team drift at different speeds. Regular check-in is the simplest way to notice this early.
Agree what to share with the wider team after the session. Cascading the approved plan soon can give the wider team time to get familiar with the plan and make the necessary preparation at their end, enabling a strong start when everyone comes back from the holiday.
How to know it worked
Throughout the session, I find it helpful to keep asking the four questions:
Clarity: are the goals, the plan and the commitments of the team clear, so that everyone can say what the team is trying to achieve for the business, and how?
Consistency: are the decisions and plans of different teams pulling the organisation in the same direction?
Confidence: do people feel confident in leading the organisation to deliver the plan? What would make them feel more sure?
A cascade-ready narrative: could each leader explain the plan to their own team, in their own words to inspire the teams?
The ultimate aim of the planning session is for the team to return after the break and start sharp and clear from the first day.
If your team came back tomorrow, could each leader explain the plan for the new year to their own team with enthusiasm and confidence?
Wait, should the investor be in the room?
Who should take part in the planning session is another important design question. Whether the PE investor should be there is a common and understandable question.
My usual advice is “yes, but not the whole thing”. Looking back over the period, celebrating progress, and sharing observations and expectations can even happen before the session, in conversation, or in a short recorded message to the management team. I would generally advise against the investor staying through the working parts of the day.
It is good for the investor to open the session to show their interest, setting the context and what they hope to see, and to return at the close, to hear the plan, ask high-level questions, and reiterate their support. In between, the team needs the room to itself.
The Operating Partner is a different question, and it depends on how the management team already interacts with the Operating Partner day to day. Where they work closely with the team as a matter of course, the Operating Partner’s presence in the room is unlikely to change how people behave. Where they are seen mainly as the investor's representative, the same caution applies as for the investor.
The key point behind all of this is simple: the plan needs to be shaped and owned by the management team. How the session is run shapes those dynamics as much as who is in the room.
At the same time, the investor is one of the plan's key stakeholders and needs to buy into both the plan and the way of working behind it, which is the case for partial rather than full participation.
(Here, I would add that good use of anonymised digital contribution would help create a safe space for people to speak more honestly, even with someone senior in the room.)
Closing remarks
The planning session can be a good moment to close out the year well, and to create some positive, shared moments along the way. If you are thinking about how to structure your own planning session for 2027, or how to make it worthwhile for the team to travel to be there, I would be glad to talk it through.