The Few Things That Actually Give GP Firms a Performance Edge

General partners, in a quest for growth and expansion, can fall victim to various traps along the way. One of the biggest?

Shiny objects vs. core needs.

“Shiny objects” aren’t always apparent for what they truly are. In fact, most GP firms that fall into distractions are making good-faith efforts to gain a performance edge – only to uncover later that the flashy thing didn’t make strategic progress. In fact, when it comes to making strategic progress, we think just a few core things can really move the needle.

How NOT to Gain a Performance Edge

There are a few common “shiny” objects that tend to get in the way of GPs achieving their true goals. They may seem innocuous, but when taken together, can have a cumulative detrimental impact on efficiency and results.

It may not be obvious at first, but ultimately, a performance edge does not come from …

Departmental point solutions. Deploying solutions that address specific needs seem helpful at first, but can create a cascade of inefficiency by fragmenting workflows and increasing friction between departments.

Implementing a well-known CRM … that’s not tailored to the alternatives industry. A CRM is a very valuable tool, but not any one will do. An off-the-shelf solution can’t cater to the nuances of alternatives investing, which require deep relationship management, the ability to manage complex deal pipelines, and industry-specific workflow automation.

“Throwing more bodies” at problems. This may provide temporary relief from a problem, but it’s not sustainable ­­– and can ultimately make matters worse. Without proper understanding of what truly needs to be addressed, rapidly increasing staff can increase inefficiency, costs, and resource burdens without ever solving the root issue.

More spreadsheets. Though spreadsheets have been a go-to, beloved organizational tool, they rarely solve problems. Worse, when used in isolation, they can create even more by increasing the number of information silos and making it impossible to get holistic view.

It’s not that any one of the items on this list can’t work in the right context. But, if your firm is stuck in Growth Complexity Chaos, none of these can provide the pathway out. But, before you throw your hands up in despair and say “nothing works,” it’s time to go back to the fundamentals and address the few core issues that enable GP firms to outperform and grow.

What Actually Gives a Performance Edge?

Sustainable success relies on the fundamentals. They may not always seem exciting, but it’s the bedrock upon which innovation and growth can flourish. Here’s what we recommend.

Reduce fragmentation. Eliminate information silos so the entire firm can operate from a single source of truth. Think of it as a unified map. Different departments may need to navigate through different parts, but everyone is moving in the same direction, and no one gets lost in the wilderness.

Make automations and integrations repeatable. Most things in investing happen in cycles. Outside of emergencies, most activity occurs at regular cadences. Avoid spending energy and resources on “one-off” automations or integrations – make them simple and repeatable.

Replicate what’s working. There’s a saying: “Build the sidewalks where the paths are worn.” Configure your software to align with communication paths, allowing technology to amplify what’s working by handling the work of seamlessly connecting deal and CRM data across teams and departments. This increases transparency across the firm, fosters a unified view, and enables better decision-making.

Hone in on your firm’s unique value-adds. True growth hinges on building your unique identity and value proposition. This means understanding your strengths, target market, and differentiated approach, says Paul Das of ProFundCom.

Das builds robust go-to-market strategies that center on a long-term approach to building brand value and awareness that ultimately bring the right investors into the sales funnel. Once the brand value proposition is established, he advocates a simple, two-part, ongoing process: create content and study the analytics. “See what messages resonate with target audiences, what channels they prefer, study the analytics and build and effective funnel that takes prospects from awareness to investment,” he explained in a Dynamo webinar.

Gain a Performance Edge in 2024

Learn how industry experts from Dynamo, Dakota, ProFundCom, and Equinox Partners use technology to strengthen and streamline the key fundamentals for success.

Watch the Webinar

 

Donna Parent is the Chief Marketing Officer (CMO) at Dynamo Software. Donna is responsible for the corporate brand, demand generation strategies, and go-to-market initiatives for promoting Dynamo’s end-to-end cloud-based platform to the alternatives ecosystem. She is focused on fueling lifelong relationships with consumers, businesses, and strategic partners. Connect with Donna on LinkedIn.