The four customers you're ignoring are killing your exit multiple

Hi there, 

Your private equity sponsor just allocated $2 million for digital transformation.

Sounds generous. But what they actually did was cap your potential.

When executives receive budget allocations, that ceiling becomes their vision. They focus on executing assigned tasks rather than identifying opportunities that could multiply enterprise value by 20x.

We know why this pattern repeats, and what successful transformations do differently.

The Practical Toolkit

A Scandinavian logistics company had four profitable business units that couldn't function as one entity. Marine shipping worked brilliantly for marine-only contracts. Rail freight excelled at rail-only routes.

But clients needing integrated multi-modal transportation for specialty cargo like refrigerated pharmaceuticals? Impossible.

The executive team faced a choice: optimize one business unit at the expense of others, or find a way to serve all stakeholder groups simultaneously.

They chose the latter, investing €8 million in data transformation that generated €150-175 million in value over five years.

The breakthrough came from recognizing that businesses serve four distinct customer constituencies:

Clients invest cash for product or service value.
Employees invest time and talent for career growth and financial returns.
Partners invest in unique capabilities for revenue share or strategic positioning.
Investors commit capital for multiplied returns.

Most digital transformations optimize for just one group. Cost-reduction initiatives satisfy investors short-term but alienate employees who see job elimination rather than enablement. Feature-rich products delight some clients but overwhelm sales teams and create support problems that repel partners.

Jeff Spence, private equity investor and business transformation advisor with 25+ years of experience, puts it directly: "If you solve for those four simultaneously, your solution is going to kick ass. You solve for one in a vacuum, it's gonna be myopic, temporary, and it's gonna ruin one of those connections."

The framework demands specific benefits for each constituency:

→ How does this help clients solve bigger problems?
→ How does it enable employees to contribute their full expertise?
→ How does it create partnership opportunities that expand market reach?
→ How does it position the business for a higher exit multiple?

The Scandinavian company's transformation unified data layers without replacing existing systems. Marine, rail, truck, and last-mile operations maintained their tools but gained ability to coordinate handoffs and present clients with single contracts covering complex routes.

This solved previously unsolvable problems while enabling employees to collaborate across departments, opening API opportunities for partners, and shifting the company from commodity transportation to specialized logistics commanding premium pricing.

Business education created a generation of executives trained to optimize spending within defined parameters. That approach works for Fortune 500 companies needing thousands of people executing consistent processes.

Mid-market companies copying the same playbook miss the fatal flaw: budget-first thinking prevents transformational opportunities that could expand what the business sells and to whom.

Read the complete framework in our latest strategic playbook.

Industry Radar

• Private equity firms are rethinking how they evaluate digital transformation ROI. (Harvard Business Review)

• Mid-market companies are finding competitive advantage in multi-constituency alignment strategies. (McKinsey)

Digital transformation fails when organizations focus on only one stakeholder group. By aligning clients, employees, partners, and investors simultaneously, businesses improve adoption, collaboration, and market impact. This four-customer approach ensures strategic initiatives deliver maximum value—unlocking growth, increasing enterprise potential, and avoiding the limitations of budget-first thinking.

Thank you for joining us for another edition of The Foundation.

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