Why are you here? Or, to put it another way, what do you do? Both are simple questions, but they are much easier to understand than they are to answer. As a somewhat grey-haired specialist in communications for private equity funds, I am no longer surprised by the lacklustre way fund managers describe their proposition. And whilst the pain that the mediocrity in the marketplace causes me may be of little interest to you, dear fund manager, what about the management teams running your next target company? What about your potential investors? You are in an arms race, even if you fail to see it.
In this short article, I can’t promise to solve your problems in this area (you’ll have to hire me for that!) but I will lay out a process that we have found useful.
It consists of the three “R”s:
- Review, revision, refinement
Ok, that’s five Rs.
Before you start, you need to understand what is important to your major stakeholder groups and what they really think about you. In most fund managers, the key stakeholders will be:
- Investors (current, lapsed and prospective)
- Management teams
- Intermediaries and lenders
- Rank and file team members in your own firm
- Firm leadership
It’s best to use a third party for this work (you can hire my team; if you are interested, just let me know). You’d be surprised what people will divulge under the cover of anonymity… With regards to this process, there are too many elements to cover here, but you can find some previous thoughts on perception studies in another Loud and Clear article: How are we perceived? 5 reasons to ask this question.
Once you have done your research, you can begin the next phase: writing.
In writing a proposition, there are four important questions to answer, for each of your stakeholder groups. Using the outputs from your research, you should attempt to answer each, in turn:
- What does the stakeholder group need?
- How do we address these needs?
- What is distinctive about the way we do this?
- How do we do it to a high standard, consistently?
And once you have answers to these questions that are supported by your research, you can move on to the third stage of developing the perfect proposition.
Review, revision, refinement
Typically, what you have now, will not be ready to use. The tone may be inconsistent; several of your answers may be based more on hope than reality. In fact, there are any number of issues that may remain.
Your job now, is to gather together a small group of your best communicators (ideally, facilitated by an external consultant) and spend a decent amount of time, reviewing, revising and refining your work. It’s not just wordsmithing, though. It’s important to think through each proposition conceptually, both individually, and as part of a coherent “set”. Is it definitely saying the right things?
Once you are happy, you should start to summarise each set of four answers into a single statement, shaving off superfluous words until you have a single sentence (or two)… about 10-12 words.
Finally, see if there is a way to integrate these short propositions into a single one, that explains what you, as a firm, do for all of your stakeholders.
This is an interesting exercise as it can identify areas of misalignment between your firm and different groups of stakeholders. And it’s challenging, because finding a way to describe what you do for a diverse set of stakeholders, without becoming bland and generic, is a difficult task. But I promise you: it’s not impossible and it’s worth it! If you can clearly and succinctly explain what you do, you will be streets ahead of the vast majority of your competitors and you can eat their lunch, instead.