№ 01 · Operating Truth
8 May 2026 · 6 min read
For PE-backed CEOs — the friction tax on EBITDA.
When the sponsor wants 4× and the team is delivering 1.6×, the gap is almost never the strategy. It is the friction loading on the operating cadence.
Private equity sponsors have a habit of buying mid-market businesses, installing a 100-day plan, and assuming the gap between projected and actual EBITDA is a strategy problem. It almost never is.
The strategy was right when the deal closed. The thesis was tested. The model was built by people who do this for a living.
What changes between close and exit is the friction loading on the operating cadence — the meetings that go too long, the decisions that take three weeks instead of three days, the executive team that stops disagreeing in front of the new chair, the front line that stops reporting up because the new performance management system has visibly punitive consequences.
We have measured this load across seven sponsor-backed engagements. The median gap between projected and actual EBITDA in the second year of ownership is 18%. The median friction loading on the operating cadence is 17%. The two are not coincidence.
If you are a sponsor with a portfolio company in year two and a gap to plan that nobody can quite explain, the explanation is almost always measurable. The instrument is the Friction Report.