Amidst private equity’s shifting paradigms, success increasingly relies upon unwavering focus and relentless execution against identified value creation levers. Historical value levers like organizational optimization and redesign, footprint and network rationalization, and performance and process improvement, remain necessary arrows in the quiver; but there is a larger opportunity for private equity sponsors to unlock even more value by modernizing the organizational constructs used to pursue value creation at speed.
Most recently, the rise of the Transformation Management Office (TMO) and the appointment of a designated TMO Leader advanced portfolio companies’ pursuit of value creation. But even this model has its limitations and can sometimes fail to deliver Multiple on Invested Capital (MOIC) in line with sponsor expectations. While sources suggest that transformations have failure rates exceeding 70%[1], the TMO remains the most prevalent construct for delivering value across business and functional lines.
Reflecting on the successes and shortcomings of the Transformation Management Office, we suggest that there may be a better way. In fact, historical performance creates a compelling case for a dedicated Value Creation Officer (VCO) within a portfolio company’s leadership levels.
Structure Dictates Function
As true in business as it is in science, structure dictates function. While Transformation Management Offices are defined to unlock value through combinations of growth strategies, working capital improvement, cost reduction and avoidance, and digital modernization, application of TMOs in private equity environments has its limitations. A modified approach adapted to the needs of portfolio companies may help companies reach their full potential more quickly.
From a structural perspective, TMOs often operate programmatically, addressing an identified set of initiatives on an agreed upon workplan. For some organizations, this level of structure, rigor, and sequencing is necessary and beneficial. However, whereas TMOs often evolve into a supercharged execution engine, the private equity landscape increasingly demands a more adaptive model that allows for greater agility and a maniacal focus on MOIC.
Second, TMO leadership roles often experience varying levels of support and conviction from their C-Suite colleagues. While transformation requires close alignment with CFO and COO agendas in particular, neither the CFO nor COO is uniquely focused on value creation as its singular priority; both may have interests that compete or conflict with transformation priorities.
The Value Creation Officer
Defined correctly, the Value Creation Officer resembles an experienced operator with a singular focus on value realization. Unlike traditional transformation roles that emphasize process coordination and execution, the VCO operates as the primary architect of value creation with direct accountability for MOIC improvement. It complements the CFO and COO agendas by delivering material financial and operational improvements while also mitigating structural gaps in C-Suite accountability by providing dedicated leadership for systematic value realization. Whereas the CFO and COO operate their respective functions, the VCO enables both to accelerate change.
Several defining characteristics distinguish the Value Creation Officer from its predecessor roles:
- Primary focus on value creation and frequent (re)calibration toward a company’s highest potential opportunities (as measured by MOIC)
- Board and CEO-level sponsorship provides sufficient support to quickly cut through red tape and navigate organizational resistance
- Close partnership and complementary support for other C-Suite members
- Elevated expectations of disruption and change tolerance are known and accepted
- Decision-making authority enabled by P&L responsibility and direct reports and/or ability to create functions as needed
Common C-Suite interactions and complementary activities of the VCO are shown below:
Ongoing Value Realization with Future-Focused Transformation
With a clear mandate to deliver immediate impact, the Value Creation Officer is also responsible for reimagining historical ways of working and introducing new technological advancements. None of these is more important in today’s dynamic environment than artificial intelligence. AI holds the promise of automating and simplifying complex workflows, generating internal and external insights, identifying competitive or market opportunities, and fundamentally reinventing how we work. It needs to be a crucible capability both in theory and in practice of the Value Creation Officer.
AI transformation requires sophisticated management that combines technical implementation expertise with business model innovation and organizational change management. The VCO will possess essential capabilities for technical value realization, cross-functional coordination, and systematic performance measurement linking technology implementations to business value creation.
Additionally, the VCO is someone who thinks big and actively pursues transformative AI use cases. According to a 2025 study from the Massachusetts Institute of Technology[2], 95% of AI pilots fail in part because they “lean on generic tools… [and] are stuck in high-adoption, low- transformation mode.” Those that are successful, the article argues, are designed for friction and are embedded into high-value workflows. The Value Creation Officer is perfectly positioned to drive this change.
Core VCO Functions
While VCO functions should be adapted to the specific needs of each individual company, most companies share at least some common needs. These can be used as a starting point when defining the VCO role:
Value Opportunity Identification and Quantification
- Assess value creation potential across business dimensions
- Utilize AI-driven analytics to identify new or emerging value opportunities
- Quantify MOIC impact for all value creation initiatives
Value Capture Architecture
- Design and implement value realization mechanisms
- Prioritize, calibrate, and recalibrate opportunities within a dynamic roadmap
- Assign top-down ownership and mandates for selected value creation opportunities
- Coordinate across business and functional lines to ensure operational changes translate to anticipated financial improvements
- Integrate technology initiatives with business and operating model innovation
Performance Accountability and Measurement
- Own MOIC measurement and realization throughout the holding period
- Implement leading and lagging indicators that predict value creation outcomes
- Incorporate leading and lagging indicators into recurring reporting mechanisms
- Balance sustainable value creation vs. short-term performance improvements
Investment Thesis Bridge
- Communicate business performance and value creation progress to sponsors, balancing both operational realities and sponsor return expectations
- Own portfolio company performance optimization
VCO vs. CTO
The VCO and CTO each have key, but different roles in executing a transformation.
Getting Off the Starting Line
If your company is one of the many that would benefit from the introduction of a Value Creation Officer, we recommend the following approach:
While the real benefit comes through execution of a defined value creation program, this approach provides a proven methodology that can serve as a starting point for your company.
The Strategic Imperative
The VCO role reflects private equity’s recognition that sustainable returns increasingly depend on systematic operational improvements. As competition intensifies and exit multiples face pressure, the ability to identify and capture value through dedicated leadership becomes the primary differentiator between successful and mediocre investment outcomes.
This is a fundamental shift toward accountability-driven value creation and alignment of portfolio company management with sponsor return objectives. When structured effectively, the VCO bridges the gap between transformation ambition and MOIC realization.
How Ankura Office of the CFO® Supports VCO Implementation to Value Realization
Ankura Office of the CFO® brings together seasoned financial and operational leaders who understand the complex challenges of delivering measurable MOIC improvement. Our VCO implementation approach emphasizes practical execution and sustainable value creation capabilities. The goal is not the process, it is to capture the prize, value realization with speed and urgency.
Our practice is distinguished by implementation focus—we measure success by tangible value creation rather than recommendations quality. We engage as partners, aligning incentives with outcomes and adapting approaches to unique organizational contexts.
Sources
[1] Kotter, J.P. (1996). Leading Change. Boston: Harvard Business School Press
[2] Snyder, J. (2025, August 26). “MIT Finds 95% of GenAI Pilots Fail Because Companies Avoid Friction.” Massachusetts Institute of Technology. https://www.forbes.com/sites/jasonsnyder/2025/08/26/mit-finds-95-of-genai-pilots-fail-because-companies-avoid-friction/
