For more than a decade, cheap capital and abundant demand let companies grow through momentum instead of mastery. Leverage looked like strategy, expansion looked like execution.

That playbook no longer works. Markets reward operational grip now, not narrative. Leadership teams that built during tailwinds are discovering how little control they have when conditions shift.

Four structural dynamics explain the operational gap.

The Efficiency Hangover

A decade of scale over substance has been exposed. Companies built for expansion, not endurance, are paying the price.

Bain reports multi-trillion dollars in unrealized value across tens of thousands of unsold portfolio companies, with holding periods at cycle highs. The bottleneck isn’t capital or deal flow. It’s operations. Firms that rode momentum now face a simple question: can you run this business without the market doing the work for you? For many, the answer is no.

PwC’s latest outlook on private capital confirms the shift: operational value creation has replaced financial engineering as the primary driver of returns. You can’t leverage your way past weak fundamentals.

The Measurement Trap

Visibility replaced management. Dashboards multiplied, but discipline did not.

PwC’s operations survey of hundreds of leaders found over 90% say recent tech investments have not delivered expected results. Integration complexity and data quality top the list. Companies have metrics without momentum. Reporting replaced rhythm.

Executives can describe problems in granular detail but still can’t restore cadence. Time disappears into dashboard reviews instead of rebuilding discipline. Accountability hides behind status updates.

The AI Mirage

Automation became a substitute for disciplined operations. Companies deployed AI on top of unstable processes and called it transformation.

MIT research on hundreds of AI deployments found about 95% of generative AI pilots never reach production with measurable P&L impact. BCG reports only a small fraction of firms achieve AI value at scale, while most see minimal returns despite heavy investment. The issue isn’t model quality. It’s flawed integration and weak operational foundations.

AI does not fix broken operations. It amplifies them. Stabilize first, then augment. Companies that pair discipline with automation will capture value. Those chasing shortcuts will multiply complexity.

The Leadership Equation

The market no longer rewards storytellers. It rewards operators.

The long expansion produced leaders skilled in narrative and scale, not in constraint and control. Operational discipline is a learned skill. Leaders who grew during tailwinds often lack experience with cash constraints, margin pressure, and turnarounds. When conditions tighten, the gap becomes visible.

Boards face a difficult choice: retain leaders with deep institutional knowledge but limited operational experience, or bring in operators who can stabilize and rebuild but may lack context. Human-capital trends show many managers face steep learning curves under operational pressure. Some adapt. Most need support.

This is the first of five articles in a series on the four structural dynamics reshaping operations. Next: The Efficiency Hangover.

Previously published:

Chris Briggs works inside B2B services, SaaS, data, and PE-backed companies to stabilize teams, fix fundamentals, and use AI to extend strong people. One client per quarter. Interim and embedded.

Connect: cb@chris-briggs.com | LinkedIn | 30-Minute Intro Call

Sources:

  • Bain & Company, Global Private Equity Report 2025
  • PwC, Private Equity Outlook 2025
  • PwC, 2025 Digital Trends in Operations Survey (610 operations and supply chain leaders)
  • MIT NANDA Initiative, State of AI in Business 2025 (August 2025)
  • BCG, Are You Generating Value from AI? (2025)
  • Deloitte, CFO Signals Survey (2025)

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