When I joined BSMG as European CFO, the company had recently acquired two PR agencies in Germany.
One in Hamburg. One in Munich.
Head office in New York was getting almost nothing back from either of them. No financial information. No reporting. No visibility into what was happening on the ground. Two businesses that had been acquired, integrated on paper, and left to carry on largely as they always had.
They weren’t being obstructive on purpose. They simply had no shared systems, no common processes, and no agreed way of working together or with the rest of the group. Information sat in people’s heads, in local spreadsheets, in filing cabinets that nobody in New York had ever seen.
I started spending two or three days a week in Hamburg and Munich.
Getting to know the people. Building trust. Slowly, patiently, getting them to share what they knew so I could feed it back to head office and start building a picture of what these businesses actually looked like.
It took time. But what came next made every hour of it worthwhile.
The decision that changed everything
Once we had the information flowing, we made a structural decision. We merged the two legal entities into one. Munich became the operational centre. Finance, administration, and management all moved there. A new financial controller came in. Hamburg continued as the client-facing office for northern Germany, but the engine of the business was in Munich.
The systems and processes we built were not complicated. But they were clear. Documented. Consistent. And because they were in place, something happened that I still think about today.
Not long after the restructuring was complete, we took on a team of people who had built a small PR agency in Frankfurt, servicing clients who were listing on the then-booming junior market of the Frankfurt Stock Exchange.
We absorbed the entire team. Their client billing. Their management activities. Their workflows.
Everything dropped straight into the systems and processes we had built in Munich.
It ran smoothly.
At the end of that year, I received a handwritten note from the global CEO of BSMG thanking me for sorting out the mess and helping turn Germany into a real powerhouse for growth in the group.
That note is the clearest example I have ever seen of what operational excellence actually produces. Not in theory. In practice.
The Germany story is one of many in Add Then Multiply.
The book covers the full operational excellence chapter, with real examples from thirty-odd deals of what building the right systems actually looks like in practice, and what it costs when they’re not there.
What the Germany story taught me
Here is the lesson I have carried into every business I’ve worked with since.
A business without operational systems is a business that depends entirely on the people currently in it.
When those people leave, the knowledge goes with them. When the business grows, the informal arrangements that worked at five people break down at twenty-five. When an acquisition arrives, or a new team joins, or a period of rapid growth demands more than the business can deliver, the cracks appear fast.
I’ve seen it in the founder-led businesses I work with every day.
The founder who has built a strong business on personal relationships and individual expertise, where every process lives in someone’s head and nothing is documented because it’s always just been done that way. When a key person leaves, the disruption is enormous. When a buyer looks at the business, they see risk.
The founder with multiple revenue streams who has grown by adding people and products but never stopped to build the infrastructure underneath. The business is impressive from the outside. From the inside, it’s chaotic. And the founder knows it, even if they haven’t said it out loud.
The founder who has just completed an acquisition and is discovering that two businesses with no common systems and no shared processes are significantly harder to run than one business with neither.
Three very different situations. The same missing piece every time.
The operational foundations were never built.
What operational excellence actually looks like
I want to be clear about something.
Operational excellence is not about bureaucracy. It is not about creating processes for the sake of processes, or documenting things that don’t need to be documented, or slowing down a business that is moving fast.
It is about building a business that can deliver consistently, whether the founder is in the room or not.
That means having clear, agreed ways of doing the things that matter. Sales and marketing, from the first conversation with a prospective client through to the handover to operations. Delivery, from onboarding through to completion and review. Finance, from raising invoices through to month-end reporting and cash management. People, from hiring through to development and, when necessary, departure.
None of that is glamorous. But every one of those things, done consistently and documented clearly, makes the business more valuable, more scalable, and more resilient.
When a new team member joins, they can get up to speed faster because the way things are done is written down. When a key person leaves, the knowledge stays because it lives in the system, not just in their head. When a buyer looks at the business, they see an operation that can run without its founder.
That last point is worth sitting with.
Because if the answer to “can this business run without you” is no, the value of everything you’ve built is significantly reduced. Not because the product isn’t good. Not because the clients aren’t loyal. But because the buyer is pricing in the risk of losing you.
Operational excellence is one of four foundations.
Find out exactly where your business stands today, across strategic financial planning, operational excellence, people and culture, and technology and innovation.
The cost of getting it wrong
I’ve sat on both sides of more than thirty M&A transactions.
The businesses that get passed over are not always the weakest ones. They are often genuinely impressive businesses with genuinely weak operational infrastructure. Reporting that relies on one person’s spreadsheet. Delivery that depends on the founder being available. Processes that exist informally but would collapse if the people who carry them in their heads decided to leave.
In one consolidation I led, the institutional knowledge loss from a poorly planned integration cost the acquiring business more than the integration itself. People left. Processes disappeared with them. The business that looked clean from the outside took eighteen months to stabilise from the inside.
That could have been prevented. Not with a large investment, and not with months of preparation. With clear systems, built early, maintained consistently, and designed to survive the people who built them.
The handwritten note
I still think about that note from the BSMG global CEO.
Not because of the praise, though it was kind. Because of what it represented.
A business that had been chaotic, opaque, and disconnected from the group had become a powerhouse for growth. Not because the people changed. Not because the market changed. Because the operational infrastructure finally matched the ambition.
That is what the second of the four foundations actually delivers.
Strategic financial planning, so you know your numbers. Operational excellence, so your business runs whether you’re in the room or not. People and culture, so your team can carry the weight. Technology and innovation, so you’re built for where the market is going.
Get those four right, and everything in the FACE methodology, Fund, Acquire, Consolidate, Exit, becomes possible.
Get them wrong, and every ambitious move you make is building on sand.
Before you go
📖 Get your copy of Add Then Multiply, including the full operational excellence chapter with real examples from thirty-odd deals.
⚡ Find out where you stand across all four foundations with the Growth Readiness Assessment.
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David B Horne
Founder of Add Then Multiply & Funding Focus
Add Then Multiply is a fractional finance and business scaling consultancy helping founder-led businesses at £1M–£10M+ to Fund, Acquire, Consolidate, and Exit.
