Lee McCabe Critiques ‘Operating Model Influencers’ in Private Equity

In a recent LinkedIn post, Lee McCabe offers a sharp critique of what he terms “Operating Model Influencers” within the private equity sphere, questioning the efficacy of their approach to driving value creation.

McCabe identifies a new breed of professional in private equity who, he suggests, often rely on superficial tools and methodologies rather than genuine operational capability. He states:

“A lot of firms sell an operating model. They bought a Trello board.”

McCabe elaborates on this by describing three common archetypes he observes:

The Archetypes of the ‘Operating Model Influencer’

The Playbook Peddler

This individual, according to McCabe, arrives with extensive documentation but fails to ensure its practical application under pressure. “Arrives with a 74 page PDF called ‘The Playbook’. Leaves before anyone tries to use it under pressure,” he writes.

The KPI Librarian

This archetype is characterized by an excessive focus on metrics and dashboard creation, often at the expense of actionable insights. McCabe points out that they are “Obsessed with cataloguing metrics. Lightly allergic to decisions. Builds dashboards that track everything except the things that move EBITDA.”

The VCP Tourist

This type of influencer, as described by McCabe, makes brief appearances, focusing on performative actions rather than substantive change. They are noted for using jargon like “cadence” frequently before departing, only to reappear for subsequent board meetings.

The Illusion of the 100-Day Plan

McCabe also takes aim at the common practice of the 100-day plan, which he argues often extends indefinitely. He illustrates the typical trajectory:

“Week 1: big workshop, lots of stickies, a ‘single source of truth’. Week 4: the CEO is asking who actually owns pricing, CRM, the call centre, and whether anyone is allowed to kill a pet project. Week 12: the plan is now a backlog. Week 40: it’s still a backlog, but with prettier labels.”

This progression, in McCabe’s view, highlights a failure to embed real operational change.

Defining a True Operating Model

Lee McCabe argues that a genuine operating model transcends mere meeting schedules or software tools. He defines it as:

“A repeatable capability. It’s what the business can do on command, in every market, with normal humans, without heroics.”

To demonstrate the existence of a true operating model, McCabe suggests that firms should publish two key elements:

• The operating cadence: Detailing the weekly, monthly, and quarterly rhythms and the preparation required from attendees.
• The non-negotiables: Outlining the standards that will not be compromised, even during challenging periods.

Anything less, in McCabe’s assessment, amounts to mere “project management cosplay.” His post serves as a call for more substantive and effective approaches to operational improvement in private equity.