What I’ve Learned About Building Value: Why Digital Is the Lever an Owner Still Controls

In my years inside companies owned by private equity I have watched the work change. There was a time when a sponsor could buy a sound company, tidy the accounts, adjust the operations and sell well. In the last cycle, market multiples and leverage carried about two-thirds of the total return on buyout deals (McKinsey, 2024), and an owner controls neither. What an owner does control is the engine room of the business, and in most companies that is the technology and the way the work runs on it.

Most of the companies I have seen bought carry a hidden tax: old ways of working on older software. I read the way out in four stages, from the money already on the table to a new way of earning.

Stage one · the first hundred days: money on the table

The first stage is diligence of the engine, before any transformation. I look for the profit hidden behind manual processes and disconnected data, price each gap in euros and months, and load the fixes as the plan on the day of close. The aim is a stable business and a plan that pays for what follows.

Stage two · efficiency: staying in the game

Once the leaks are found, the routine work is automated: reconciliations, documents, the monthly pack. None of this makes a company sophisticated. It keeps the company in the game, and the margin it recovers is the cash that funds the next two stages.

Stage three · revenue: the value chain, automated

With a clean engine, technology starts to grow the top line inside the same business model: a better customer experience, faster service, a sales process that knows which customers carry the margin. The model stays as it is; the company earns more from it.

Stage four · self-disruption: a new business model

The last stage is the hardest and the one that re-rates the company: a new way of earning, built before a competitor builds it. A service becomes a product, a project becomes a contract that renews, data the company already holds becomes a line a buyer prices on a different basis. One example from my own career: a 200-year-old industrial group’s water-technology division built its first software products, an IoT platform that cut its customers’ operating costs by 10 to 15 per cent, and added more than $100M of revenue in under three years (as reported by the company; case 02 on the value page).

Today and tomorrow

The roadmap ends in a company with two engines: one runs today’s business for profit, under the chief executive; the other builds tomorrow’s business for value, and it needs an owner of equal standing whose whole job is the new model, the role Osterwalder and his co-authors call a chief entrepreneur. The first pays for the second, and the two are kept apart so the new business does not starve the old.

People

Technology provides the scale; people provide the judgment and the relationships. People do business with people. A company designed this way owns only what is critical and works with a trusted ecosystem for the rest.

The bottom line

For me digital transformation is a leadership decision before it is a technology project: to make a business so efficient, and so clearly built to keep earning, that its value is plain to the next owner. In my experience the firms that take this path sell better, and they leave behind companies that keep earning.

Sources: McKinsey, Bridging private equity’s value creation gap, April 2024; the case at makersofnew.com/value.html; Osterwalder, Pigneur, Etiemble and Smith, The C-suite needs a chief entrepreneur, Harvard Business Review, 2019.

Revised 18 October 2026 in the house’s frame. The first version credited four named firms with results its sources did not support; those examples were removed.