The execution gap: Why strategy is the illusion of growth

We’ve all seen the deck. It’s 100 slides of pure brilliance. It has the TAM/SAM, a three-year financial plan, the ICP, and a Rule of 40 projection that looks like a stairway to heaven. The operating partners love it. The board signs off on it.

And then, Monday morning happens.

Six months later, the stairway to heaven is a flat line. The “Rule of 40” is a “Rule of Maybe Next Year.”

Private equity doesn’t have a strategy problem. It has an execution problem.

The 60% failure rate

We are currently living in a Revenue Accountability Gap. Despite the millions spent on CRM, MAP, and intent data, 60% of portfolio companies fail to hit their growth targets. It’s not because the plan was wrong; it’s because the engine designed to carry it out was built for a different era.

Most firms keep trying to improve marketing. The best ones redesign how revenue is produced.

The fixed-cost trap: Death to margins

The traditional GTM model is a bloated, inefficient relic. We’ve been taught that to grow, you hire. Need more pipeline? Hire three more SDRs. Need more content? Hire a creative director.

This is the hiring-based capacity model, and it’s a death trap for margins. It creates a fixed-cost structure where 70–80% of GTM spend is locked into labor that takes 90 days to hire and another 90 to ramp. When the market shifts, you’re stuck with the overhead but none of the output.

You’re not scaling a business; you’re scaling a payroll.

The reframe: GTM engineering

We need to stop talking about campaigns and start talking about throughput. Value creation has shifted from the plan to the system.

The shift is from a legacy GTM model to an engineered GTM system:

• From headcount to output: Capacity shouldn’t be measured by how many seats are in the office, but by how much revenue the system can produce.
• From fixed to variable cost: Move from 70% fixed costs to a model that is 60% variable. If you need to scale, the system scales with a “button,” not a recruiter.
• From manual to automated execution: At Azuga, they replaced 640+ hours of manual labor per week with an automated execution system. That’s not a “marketing win”; that’s an estimated $2.1M labor unlock that flows directly to EBITDA.

What “good” looks like

Look at FARO Technologies. They didn’t just “do better marketing.” They shifted their operating model to a variable cost Marketing-as-a-Service (MaaS) model.

• Marketing spend: Dropped from $16M to $8.6M (a 46% reduction).
• Sourced revenue: Doubled from $59M to $114M.
• Velocity: Time to add/scale a marketer went from 91 days to 7 days.

The result was an estimated $12.9M EBITDA impact. That’s when the engine really starts to fire.

The bottom line: The shift that changes everything

We are no longer in an era where you can hire your way to a higher multiple. The math has changed, and the old playbook, adding more bodies to solve a throughput problem, is the fastest way to erode your EBITDA.

The shift from headcount to output, from fixed to variable cost, and from manual to automated execution fundamentally changes the economics of your portfolio. When you move to an engineered system, growth no longer depends on adding cost. Throughput increases without linear hiring; CAC improves, and margins expand.

In this new reality, execution design becomes the primary driver of growth. Your strategy might set the destination, but your operating model determines whether that growth is profitable.

Most firms will keep trying to improve their marketing. The best ones will redesign how their revenue is produced.

Redesign the execution behind growth

Private equity rewards what can be underwritten: predictable pipeline, efficient acquisition, and durable margins. You can keep debating strategy, or you can fix the execution that drives it.

If you want to see how leading firms are navigating this shift and what it means for GTM strategy, start here.

Ready to move beyond planning and engineer a more efficient execution model? Let’s talk.

Author

Rick DeMare

Rick DeMare is Executive Director of Strategic Partnerships for Private Equity at 2X. With over two decades of experience in data analytics and enterprise software, he specializes in building strategic partnerships and developing high-performing sales teams that drive growth. Prior to 2X, Rick held leadership roles at Starburst, ThoughtSpot, and Okta, where he led go-to-market strategy and OEM partnerships with global impact.