In a recent LinkedIn post, Lee McCabe critically examines common business practices, particularly within private equity, arguing that many companies mistake superficial activity for genuine progress. McCabe highlights a prevalent issue where an increase in top-of-funnel metrics, such as leads and engagement, is celebrated without a corresponding focus on crucial bottom-of-funnel performance like conversion and retention.
“We’d been celebrating the sound of water entering a bucket full of holes. That is half of private equity value creation, growth strategy, and board reporting in one line.”
McCabe contends that this focus on vanity metrics, while making the top of the funnel appear busy, masks underlying systemic problems. He paints a stark picture of businesses “pouring harder into a broken system and mistaking noise for progress.” This approach, according to McCabe, leads to wasted resources and a failure to achieve sustainable growth.
The Illusion of Growth
McCabe elaborates on how this flawed strategy manifests in day-to-day operations. He points out that while metrics like leads, traffic, and pipeline might be increasing, the critical conversion rates and customer retention often suffer. This creates a misleading sense of momentum.
“Meanwhile conversion is awful, retention is weak, margins are leaking, the sales team is chasing rubbish, and the call centre is setting fire to money with both hands. But yes, excellent news about the lead volume.”
According to McCabe, this tunnel vision prevents businesses from addressing the fundamental issues that hinder true growth. He suggests that the “holes” in the bucket represent critical areas often overlooked because they are less glamorous than top-line figures.
Identifying the “Holes” in Business Systems
McCabe identifies several specific areas that commonly represent these critical “holes” in business operations:
- Slow speed to lead
- Bad follow-up processes
- Poor close rates
- Inconsistent pricing discipline
- Ineffective channel mix strategies
- Reporting that prioritizes flattery over actionable insights
He argues that these operational inefficiencies are often masked by an overemphasis on superficial growth indicators. “It is amazing what passes for momentum when nobody wants to look at the holes,” McCabe writes, emphasizing the psychological tendency to avoid confronting unpleasant truths.
Growth Plans vs. Spending Plans
A significant part of McCabe’s critique is directed at how many “growth plans” are, in reality, merely disguised spending plans. He asserts that simply increasing investment or activity without fixing the underlying structural issues is ineffective.
“More water does not fix the bucket. It just gives you a louder sound while the floor gets wet.”
McCabe’s analysis suggests that true value creation and sustainable growth require a rigorous, honest assessment of core business processes, rather than a celebration of easily manipulated top-line metrics. He encourages leaders to confront the “boring” but essential operational details to build robust, high-performing businesses.
📝 About This Content
This article is based on insights shared by Lee McCabe on LinkedIn.
📅 Originally posted on April 2, 2026 | View original post on LinkedIn →