In today’s data-saturated market, the challenge for private equity firms isn’t access to metrics, it’s knowing which ones truly drive value. The most effective operators start with the end in mind: aligning data with the equity story and the value creation plan. Metrics should serve as the connective tissue between investors (validating the investment thesis), management (tracking and steering value creation initiatives), and operators (informing day-to-day decisions). When done well, this alignment creates a unified narrative that not only drives operational improvement but also strengthens the equity story for exit, ultimately supporting a higher multiple.

The Problem with Too Much Data 

Private equity-backed businesses often suffer from a paradox: they’re drowning in dashboards, yet starved of insight. Legacy reporting systems tend to prioritise completeness over clarity, surfacing hundreds of KPIs that offer little strategic or forward-looking insight. 

What’s missing is a framework that ties metrics to three critical layers: investor expectations, management priorities, and operational execution. Without this linkage, metrics become noise rather than a strategic asset. What’s needed is metric discipline—a ruthless focus on the few indicators that validate the investment thesis, guide management decisions, and empower operators to deliver value. 

A Six-Step Framework for Identifying the Metrics That Matter

1. Start with the Equity Story 

Every investment begins with a set of key narratives (e.g., margin expansion, recurring revenue growth, geographic scale, operational efficiency). Define this story clearly, because it will anchor every metric you track. Ask: What are the stories we are looking to tell that we must evidence at Exit?  Your metrics should validate that thesis.

2. Map Metrics to Equity Narratives

Translate the equity story into measurable indicators across key domains: 

• Customer & Revenue: e.g., retention (GRR, NRR), organic growth, lifetime value 
• Operations: e.g., gross margin, throughput per FTE, cost-to-serve 
• Sales & Pipeline: e.g., pipeline velocity, conversion rates 
• Human Capital: e.g., attrition rates, productivity metrics 
• Finance: e.g., EBITDA margin, cash conversion cycle 

Consider both value creation impact (how metrics drive commercial and/or operational improvement) and exit multiple impact (how they influence valuation).

3. Prioritize Metrics Using a 2×2 Matrix 

Define reporting use cases and plot metrics on a Time-to-Value vs. Impact matrix: 

• High Impact / Quick Wins: Prioritise these first for immediate ROI 
• High Impact / Longer Horizon: Plan for these in roadmap 
• Low Impact / Quick Wins: Consider if they add incremental value 
• Low Impact / Longer Horizon: Deprioritise 

This ensures resources focus on metrics that matter most.

4. Conduct a Gap Analysis for Priority Metrics

For the highest-priority metrics, assess data across systems of record: 

• Availability: Does the data exist? 
• Quality: Is it accurate and consistent? 
• Granularity: Can it be sliced by dimensions (e.g., customer cohort, geography, product line) to uncover trends? 

It’s key to consider the required data history at this stage, e.g., how many years of data are available across current and legacy systems. This will determine what systems are in-scope for the Gap Analysis. For a transaction, three years is generally the minimum, but more years will be required for deeper historical analysis such as customer journeys, lifetime value and cohort evolution.

This step reveals feasibility and highlights where enrichment is needed.

5. Define Data Remediation Needs

Where gaps exist, determine what’s required: 

1. One-time Improvements 
   1. Data clean-up: e.g., customer de-duplication 
   2. Data enrichment: e.g., adding industry, sector, or location via third-party sources 
2. Ongoing Process Changes 
   1. E.g., adding new fields and/or replacing free-text with mandatory inputs to systems to improve structure 
   2. Where new fields are created and therefore historical data is not available, you may need to consider working with key users (channel partners, sales teams) to do a one-time data backfill

These actions ensure data integrity and unlock advanced analytics.

6. Define KPI Tree and End-User Groups

Design a KPI hierarchy aligned to user needs: 

• Board & Investor Level: Strategic KPIs tied to equity story 
• Management Level: Metrics for tracking value creation initiatives 
• Operational Teams: Granular KPIs for day-to-day execution 

This ensures visibility and accountability at every level, driving ROI and reinforcing the equity narrative. 

It’s imperative to align on the granularity of reporting required at each level, and the number of metrics displayed. For operational teams, you should ruthlessly prioritize the highest impact KPIs that will drive action and remove any secondary metrics that do not drive desired behavior. Additionally, key to supporting operational teams behavior is ensuring 1) Trust in the numbers through early engagement and effective change management, and 2) Full alignment in metric definitions. 

Actionable Takeaways for PE Leaders

• Audit your metrics: Eliminate noise and elevate the few that matter. 
• Align across layers: Ensure metrics connect investor expectations, management priorities, and operational execution. 
• Link to the exit: Every metric should reinforce the equity narrative and support valuation uplift. 
• Invest in granularity and build trust: Clean and enrich the highest value data, and further segment to uncover hidden value. 
• Champion forecasting: Move from hindsight to foresight. 
• Drive cultural adoption: Make data fluency a core competency. Coach and incentivise teams to trust and own their data – move away from ‘institutional knowledge and storytellers’ to ‘data-driven decision-makers’.  

JMAN Group

At JMAN Group, we help private equity firms and their portfolio companies turn data into commercial advantage. Our approach combines strategic clarity with technical depth—enabling clients to identify the metrics that matter, forecast with confidence, and tell compelling stories at exit. 

Let’s Talk If your firm is ready to move from reporting to forecasting and insight, we’d love to help. Reach out to explore how JMAN can support your next value creation journey.