By Philip Curran, Principal, Rinnovare, and Graeme Crawford, CEO, Crawford McMillan
INTRODUCTION
The failures that quietly destroy value in portfolio companies rarely appear in the dashboards. They sit underneath them.
Private equity operators are trained to see the obvious signals. They can spot a soft revenue bridge, a margin story held together by optimism, or a bloated cost structure masquerading as scale.
Two integrity gaps, data integrity and leadership integrity, erode enterprise value long before diligence, long before the 100-day plan, and long before the operator realizes the company they bought is not the company they're running.
EY reports that 72% of PE-backed companies lack reliable data and KPIs at exit, and one buyer recently knocked $8M off the purchase price of a mid-market business because they couldn't trust the numbers. But the deeper truth is this: unreliable data is almost always accompanied by unreliable leadership. When leaders aren't aligned, the data reflects the confusion. When the data can't be trusted, leaders can't align on reality.
We come at this problem from different disciplines, one from data lineage and operational truth, the other from leadership alignment and organizational truth, but we see the same pattern:
You cannot scale a company whose data is lying to you, and you cannot scale a company whose leaders are lying to themselves.
These two blind spots always travel together. And both can be diagnosed and materially improved within 90 days.
LEADERSHIP INTEGRITY: THE PEOPLE SIDE OF VALUE EROSION
By Philip Curran, Rinnovare (www.rinnovarehr.com)
Leadership integrity isn’t about ethics. It’s about whether the leadership team is aligned, coherent, and telling the truth — to each other and to the organization. When that breaks down, execution breaks with it. Strategy becomes theater. Meetings become performance. And the business loses the ability to convert intention into results.
In PE‑backed companies, leadership integrity failures show up in five predictable patterns — and each one has a data shadow.
1. Leaders operating from different maps
Most leadership teams aren’t misaligned because they disagree. They’re misaligned because they’re working from different definitions of reality — different interpretations of strategy, different definitions of “done,” different assumptions about priorities, and different expectations of decision rights.
This is the leadership equivalent of broken data lineage. If the team can’t agree on the truth, they can’t execute on it — and the data will show it. In one recent portco engagement, five executives gave five different definitions of “active customer,” which produced three different revenue numbers in diligence.
Symptom: Endless rework, circular debates, decisions that evaporate after the meeting.
Impact: Slower execution, higher friction, and a culture that learns to wait instead of act.
2. Accountability that exists on paper but not in practice
Accountability failures are rarely structural. They are leadership integrity failures.
When leaders avoid hard conversations, tolerate underperformance, or allow hero cultures to flourish, accountability becomes optional. The org chart may say one thing, but the lived experience says another.
And the data reflects it. In companies with weak accountability, we consistently see forecast accuracy below 60% and project slippage above 40% — not because the systems are broken, but because the leadership norms are.
Symptom: Fire drills, heroics, and a handful of people carrying the business.
Impact: Burnout, turnover in critical roles, and a widening gap between plan and actuals.
3. Decision‑making that is slow, political, or inconsistent
Nothing destroys value faster than a leadership team that cannot make — and keep — decisions.
When decision rights are unclear or leaders lack the courage to commit, the organization compensates with meetings, escalations, and workarounds. This is the people‑side version of spreadsheet culture: everyone builds their own version of the truth.
In one portco, a pricing decision took nine weeks because three executives believed they owned it. During that time, competitors adjusted twice.
Symptom: Decisions that take weeks instead of days.
Impact: Lost opportunities, stalled initiatives, and organizational fatigue.
4. A culture that rewards activity instead of outcomes
When leadership integrity is weak, teams learn to perform for optics instead of impact. Dashboards get prettier. Presentations get longer. Meetings get more theatrical. But the business doesn’t move.
This is where leadership and data failures intersect:
When leaders don’t demand clarity, the data becomes decorative.
In one case, a portco produced a 40‑page KPI deck every month — none of which tied to the value‑creation plan.
Symptom: Beautiful dashboards masking operational drift.
Impact: Operators get surprised. Boards get frustrated. Teams get cynical.
5. Leaders who cannot tell the same story
The most reliable indicator of leadership integrity is narrative coherence. If you ask five executives, “What business are we building?” and get five different answers, you don’t have a strategy problem — you have a leadership integrity problem.
And no amount of data will fix it. In fact, the data will fracture along the same lines.
Symptom: Conflicting messages cascading through the organization.
Impact: Confusion, misalignment, and a culture that loses trust in leadership.
90‑DAY FIX
Days 1–30: Establish the Leadership Truth
Most portcos discover within two weeks that the leadership team is operating from three or more competing definitions of reality.
Conduct structured interviews using a BARS‑based leadership diagnostic (RQ Diagnostic™).
Identify alignment gaps, decision bottlenecks, and accountability failures.
Map the “leadership truth” versus the “leadership story.”
Days 31–60: Rebuild the Operating Cadence
By week five, the biggest surprise is how many decisions have no clear owner.
Clarify decision rights and role ownership.
Reset the leadership meeting architecture.
Establish a single source of truth for priorities and commitments.
Days 61–90: Lock in Behavioral Integrity
By week ten, the team begins to see execution speed increase simply because ambiguity has been removed.
Implement leadership commitments tied to execution outcomes.
Build a renewal rhythm: retrospectives, accountability loops, cross‑functional alignment.
Reinforce narrative coherence — leaders must tell the same story.
DATA INTEGRITY: THE NUMBERS SIDE OF VALUE EROSION
By Graeme Crawford, Crawford McMillan (www.crawfordmcmillan.com)
Data integrity isn’t about dashboards, either. It’s about whether the numbers your business runs on can be trusted, traced, and defended under scrutiny. When that breaks down, every decision becomes a guess, no matter how confident the leadership team feels.
In PE-backed companies, data integrity failures show up in five predictable patterns.
1. Nobody agrees on the numbers
Most leadership teams aren’t arguing about strategy. They’re arguing about which version of the numbers is real.
Revenue means one thing in finance and another in sales. Customer count depends on who’s pulling the report. Monthly financials take weeks because three systems must be reconciled manually before anyone trusts the output.
This is the data equivalent of leaders operating from different maps—except here, the map itself is wrong.
In one engagement, we found nine different definitions of "active customer" across finance, sales, and operations. Nobody was wrong. Everybody was measuring something real. But no one could answer the basic question: how many active customers do we have?
Symptom: Monthly reporting takes 3–4 weeks because teams spend more time reconciling than analyzing.
Impact: Decisions get made on stale data—or whichever version the loudest voice prefers.
2. Manual workarounds masquerading as process
Every portco has them: the spreadsheet only one person understands, the pricing logic that lives in someone’s head, the cost allocation done by hand after the close.
These aren’t processes. They’re single points of failure disguised as institutional knowledge.
One portco was running its entire pricing engine out of a macro-enabled spreadsheet built by an employee who had left eighteen months earlier. Nobody else could change a pricing rule without breaking something they did not understand.
Symptom: One or two people are bottlenecks in critical functions, and no one can explain their logic.
Impact: Operational fragility that shows up as risk in diligence and chaos during integration.
3. Reporting that measures activity, not outcomes
This mirrors the leadership failure pattern—and that’s not a coincidence.
Dashboards look sharp. Slide decks are thick. But ask, “What is the fully loaded cost to acquire and serve this customer?” Silence.
One mid-market business produced a weekly dashboard pack of 42 pages. The exec team opened it twice a year.
Symptom: Beautiful dashboards everyone presents but nobody uses to make decisions.
Impact: Capital allocated on intuition, not evidence.
4. Data lineage that doesn’t exist
When a buyer asks, “Where does this number come from?” the answer should be a clear, auditable trail from source to report.
In most portcos, the answer is a chain of spreadsheets, manual adjustments, and institutional memory.
In a recent mid-market diligence, a buyer knocked $8M, a full EBITDA multiple, off the offer because the seller could not trace its revenue numbers back to source systems. The numbers were real. The buyer just could not verify that they were.
Symptom: Diligence questions take days and require archaeology rather than analysis.
Impact: Buyers discount opacity. If you can’t trace a number, they assume it isn’t real.
5. AI ambitions on a foundation of sand
Pressure to “do AI” is enormous. But most portcos can’t produce a clean revenue forecast, let alone the structured, governed data machine learning requires.
AI doesn’t fix bad data. It scales it.
One portco spent six months piloting an AI sales-forecast tool. The model was clean. The input data was not. Forecasts came out more confident and no more accurate than the human forecasts they replaced.
Symptom: AI pilots stall after the proof of concept because production data doesn’t match the demo dataset.
Impact: Wasted investment, lost time, and a skeptical board.
THE 90‑DAY FIX (Data Side)
Days 1–30
Diagnose where the data is fragile and which fragilities are costing the business most.
Days 31–60
Consolidate the truth, retire the workarounds, and put a named owner behind every number that matters.
Days 61–90
Make the cleaned-up numbers tell a value creation story that stands up to diligence.
WHERE DATA INTEGRITY AND LEADERSHIP INTEGRITY COLLIDE
These two blind spots aren’t separate problems. They are two expressions of the same root cause.
When leaders aren’t aligned, the data reflects the confusion. Competing priorities produce competing metrics. Different agendas produce different dashboards. The data doesn’t lie—it faithfully reproduces the dysfunction above it.
And the reverse is equally true. When the data can’t be trusted, leaders can’t align on reality. They fall back on instinct, politics, and narrative strength. Leadership integrity gaps don’t just cause data problems—they feed on them.
Fix one without the other and you get half the value. Fix both and you get compounding value.
JOINT CONCLUSION: THE COMPANIES THAT KNOW THEMSELVES WIN
The portcos that exit at a premium share one trait: they know themselves.
They have leadership teams aligned on a single definition of reality. They have data foundations that can withstand scrutiny. They have operating cadences that reinforce truth instead of obscuring it.
The companies that stall in diligence share the opposite trait: They are running two businesses—the one they think they have, and the one they actually have.
The path forward is not complicated: Run a leadership diagnostic and a data diagnostic in parallel.
Fix the structural failures that matter.
Rebuild truth—behavioral and numerical—within 90 days.
Do that, and the business stops surprising you. The board stops second‑guessing you. And the exit story writes itself.
If this sounds like a portco you’re running, we offer a paired 60‑minute diagnostic conversation. One call. Two lenses. No prep. No deck. Just a clear view of which integrity gap is costing you the most — and what a 90‑day fix would look like.
Primary Category: Enterprise Value
Secondary Category: Organizational Drift
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