FIELD MEMO · 10 MIN READ
You Can't Hire Your Way to Value Creation
Talent is necessary. It is not sufficient.
Every healthcare value creation leader I talk to is playing the same game: searching for talent.
The profile is always the same. The modern value-creation hire is an ex-consultant who can also operate, healthcare-literate, PE-fluent. The supply of that person is small and everyone is bidding for the same handful.
Pay climbs every year while the role itself remains unsettled. No one agrees on what it owns or what good looks like.
The standard advice is to get better at the search. Define the profile more precisely. Widen the pool. Win the comp war.
All of that is worth doing and finding the right hire matters. But the search is necessary, not sufficient, and treating it as the whole problem is where most funds go wrong. Three things have to be true that the search itself cannot answer:
1. The structure has to be right, or the best hire inherits a mandate with no operating model underneath it.
2. The work has to be the right work, or it builds one person's indispensability instead of the company's capability.
3. The work has to outlast the builder, or the value walks out the door when they do.
The first is upstream of the search. The second is the work itself. The third is downstream of the build.
Upstream of the Search
The team you can build is set by forces the search doesn't reach. A fund cannot choose its value creation team structure the way it chooses which industry trends to invest behind.
Centralized, embedded, and hybrid describe what the structural constraints produce. Whether funds realize it or not, the ideal shape was already set before the value creation question was even raised.
Three forces decide it: how much capacity it can afford, what kind of execution it should prioritize, and where the resources have to live.
Size. A fund spends on value creation only what its fee pool will bear. A dedicated operating professional costs the same at a small fund as a large one, but at a small fund that salary is a far bigger share of the fee pool that has to cover it. Below a certain AUM it doesn't fit at all, which is why the smallest funds reach for outside help instead of building. You can recruit harder, pay more, and outbid every peer; the math of the fee pool still caps the team you can build.
Focus. How broad the book is decides whether operators specialize by sector or by function. One upper-middle-market value creation leader watched his generalist team split into sector verticals as the portfolio broadened, because no generalist could carry the domain depth a multi-industry book demanded. He did not choose it; the breadth of what the fund bought did. But breadth forces only that you specialize, not which axis: the most diversified funds go the other way, KKR and Blackstone organizing operators by function (procurement, talent, digital) across every sector they own, because one functional group covers the whole book where a sector vertical would need a mini-team per industry. Either way, the axis is forced by the firm's investment breadth.
Location. Who pays the operator decides where the work sits. At a middle-market fund the internal team is paid from management fees, and fund-level headcount draws LP scrutiny, so it stays lean and strategic. Execution capacity gets hired straight into the portfolio companies, where the cost sits on the portco's books instead. You can land the best operator on the market and the fee math still seats them inside a single company rather than across the portfolio.
None of this is a decision the fund sits down and makes. The structure is a diagnosis it gets right or wrong, reading what the size, the focus, and the location already require. The diagnosis carries weight because the structure is the strategy. The wrong one leaves the best operator you can hire fighting the setup. The right one multiplies what that operator can do.
Orienting the Work to Value
Say you get all of that right. The structure fits your size, the work is seated on the right side of the line between fund and portfolio company, and the right person is in the seat. That settles the firm's approach, the email domain of the hire, and the individual with the value creation mandate.
What none of them solves is the part that matters most: what the work is actually pointed at. The search can fill the seat. It cannot aim the work, and the aim is what decides whether any of it creates value.
Often the misfire is built into the role itself due to the value creation mandate being expected to serve two masters.
Part of the work points into a company: lead an add-on integration, run a payer-mix analysis, tighten the revenue cycle.
Part of it points back at the fund: report progress to deal teams and boards, standardize playbooks across the portfolio, manage the firm's roster of outside advisors.
Both parts of the role are "valuable," but only the first creates enterprise value inside the portfolio company.
And no one serves two masters evenly. The role answers to the entity named on its paystub, so when serving one means shorting the other, the work defaults to prioritizing the fund's processes over the company itself.
That default has a cost the company feels. The value creation team it gets is usually one it did not choose and cannot remove. Ask an operator who has lived with one and you get a version of the same story: a team flew in, ran the analysis, and left a deck concluding the intake process was broken. The company already knew intake was broken. What it needed was someone to rebuild it, and rebuilding is the part the deck does not do.
The fund's operational intervention can arrive as a gift the CEO welcomes or a tax the CEO tolerates, and which one it is has little to do with the talent and everything to do with whether the work was built to help the people running the company or only to watch them more closely.
The friction shows up in the reporting. Build what the management team uses to run the business and you are a partner; ask for weekly numbers only you care about and you are a set of eyes reporting upstairs. Function like a spy and you get treated like one: the company gives you compliance, not candor, which helps no one and slows the work for everyone.
Work that actually supports the company looks different. It aims at the value that shows up in the P&L and at the company's ability to produce it. A dashboard full of green is meaningless if the business underneath is underperforming. The work has to move a number the company actually runs on.
Downstream of the Build
Even work aimed right can leave nothing behind. Whether it lasts comes down to what the builder leaves when they go. There are only two answers: direction or infrastructure.
Direction is a recommendation, a dashboard, or the strategy deck that gets admired and then shelved, the artifacts every project produces. But direction on its own is inert: it points the car down the road without adding any gas. The company doesn't lack a sense of where to go. It lacks the capacity to get there.
Infrastructure is a system the company's own team runs: the monthly operating review the CFO leads, the pipeline the commercial team works without prompting, the integration checklist that runs on every add-on. It keeps working after the builder is gone.
The difference stays invisible until the builder leaves: direction walks out with them, infrastructure stays.
The builder is temporary by design. The project has a defined end; when it ends, the builder moves to the next company, and whatever did not transfer to the team leaves with them. That is the gap the search was never going to close, because it was never a hiring problem.
When the builder goes and nothing stays, what was created is not value. It was dependence. Work that ran on one person's attention degrades the week that attention rotates elsewhere. The company leaned on one person instead of building its own capability.
The best value creation builds systems. But the gravity of the work pulls the other way, toward firefighting, because the fire is always today and the system build can always be deferred until next quarter.
The pull toward firefighting has a source. Billed out to the company or on the fund's payroll, the value creation hire has to look busy enough to justify the seat, and the most available work is always the urgent thing, the job an underperforming leader should be doing. Building the head of sales' pipeline tracking. Carrying the FP&A load a CFO has not grown into. The work gets done, the company looks fine, and the capability gap the company needs to fill stays hidden.
The drift catches even the disciplined. A principal at a software-focused fund, whose first focus walking into any company is "always people," described what happened to her anyway. A partner wanted marketing metrics tracked everywhere, and she became the person who tracked them. The report got produced on schedule, except the weeks she was out. Over time it became known as her report rather than the company's. The team produced it to satisfy the request, not to run the business.
Her own discipline points the other way, hire the finance lead and build the company's capability, because there is only so much she can do from an email address that ends in the fund's name. She knew the rule cold, and the work pulled her in anyway. That is how you know the pull is structural, not situational.
You cannot retrofit independence. The operators who beat it build it in from the first week. One put the standard plainly: if he has done his job well, he has worked himself out of a job. Designing against dependence must be deliberate work.
Every system gets a named internal owner who runs it while the builder is still in the room to correct them. The owner shadows the work, then runs it with support, then runs it alone while the builder watches and says nothing. The system lives in a document the team edits and owns, so it does not leave when the builder does.
The measure is plain: can the CEO tell the board the systems are theirs and their team runs them, and have it be true the week the builder is somewhere else. I have watched that hold: systems I left inside a healthcare platform that the team still ran for years after I was gone, because the handoff was designed from the beginning.
Who does the building, in-house, a new hire, or an outside operator, matters less than the test you hold any of them to: does the company come out more capable of running itself, or more dependent on the person who built it?
The part you can't hire for
The search is the problem everyone can see. It is not the one that decides the outcome. Talent is necessary, and the hire matters, but the talent is the cost of entry, not the source of the value created. The value is everything the search cannot buy: a structure the economics will support, work aimed at the company instead of the fund, and a build that outlives the builder. Get the hire and miss those, and you have paid top of market for a dependency. Get them right, and the company keeps something long after the hire is gone. You cannot hire your way to value creation. The value is what the company can run without the person you hired.
MARTEL CAMPBELL
Replies welcome: martel@martelhealth.com
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