Lee McCabe: AI Strategy Requires ‘Boring Adult Work’ Before Implementation, Says PE Expert

In a recent LinkedIn post, Lee McCabe, a figure associated with Claymore Partners, discusses the growing expectation for private equity (PE) portfolio companies to adopt AI strategies, cautioning against a premature focus on advanced technologies without foundational business hygiene.

McCabe highlights a common disconnect he observes in the PE landscape, where portfolio companies are pressured to implement AI without having basic operational clarity.

“Every PE portfolio company is now expected to have an AI strategy. Lovely. Most of them still cannot answer three quite basic questions without a minor archaeological dig through spreadsheets, CRM exports, call logs, and somebody from finance doing a heroic amount of guesswork.”

He elaborates on these critical, yet often overlooked, foundational questions that need answering before AI can be effectively leveraged:

The Foundational Questions Unanswered

According to McCabe, these essential queries include:

• What happened to revenue last week.
• Which channels actually drove it.
• Where margin leaked on the way through.

McCabe argues that without clear answers to these fundamental business metrics, the pursuit of advanced AI capabilities can be counterproductive.

AI as a Multiplier, Not a Strategy

A central theme in McCabe’s post is the distinction between AI as a strategy and AI as a tool. He asserts that AI’s true value lies in its ability to amplify existing business processes, not to create them.

“AI is not a strategy. It is a multiplier. If the underlying business is messy, AI just helps you scale the mess faster, with better branding and a more expensive software bill.”

As Lee McCabe points out, the companies that will derive tangible value from AI are not those with the most impressive presentation decks, but rather those that have prioritized essential operational groundwork.

The Importance of ‘Boring Adult Work’

McCabe emphasizes that the firms that will truly benefit from AI are those that have completed the less glamorous, but crucial, preparatory steps. He lists these as:

1. Clean data
2. Instrumented funnel
3. Working CRM
4. Pricing discipline
5. Basic operational visibility

“Not glamorous. Just useful. Which is why it gets ignored until someone misses the number and suddenly everyone becomes very interested in “digital transformation,”” McCabe writes, underscoring how these vital elements are often neglected until a crisis emerges.

Challenging the ‘Value Creation Workshop’ Mentality

In his analysis, McCabe critiques a prevailing trend in private equity where value creation is often treated as a series of superficial workshops rather than a deep commitment to operational infrastructure and discipline.

“Private equity has spent years pretending value creation is a workshop. It isn’t. It is infrastructure, discipline, and operators who can tell the difference between a real capability and a nice bit of theatre.”

Lee McCabe concludes that effective value creation in PE relies on robust infrastructure, unwavering discipline, and experienced operators capable of discerning genuine capabilities from mere performance. This perspective suggests that a focus on AI without addressing these core business fundamentals is a costly distraction.