Tip of the Spear Ventures

A Family Office that behaves like Venture Capital | Private Equity | Business Consulting

Blog

The loudest voice in the room just got funded.

By

ISSUE XXXI

FROM THE TIP OF THE SPEAR

SAM PALAZZOLO

Deloitte’s Finance Trends 2027 report surveyed 1,434 leaders at companies with $1 billion or more in revenue and asked how they most often approve large AI and technology investments. 23% said executive or board mandates, with no measurement process behind them. Among North American respondents, it was 28%. Only 25% use a formal capital approval process that requires quantified ROI and a business case. (Deloitte, September 2026: https://www.deloitte.com/us/en/insights/topics/leadership/finance-trends-leadership.html)

A mandate is not a criterion. It is a preference with authority behind it. When the largest investments of the year are approved because the right person wants them, the approval process measures influence, not return. The request that wins is the one argued hardest, by the person with the most political capital, in the meeting where the budget got decided. Nobody records that as the reason. It surfaces a year later as a capital plan that does not match the strategy it was supposed to fund.

Concept 2 is where Pillar 4 of the Enterprise Value Playbook, Finance + Capital, turns visibility into decisions. Concept 1 asked whether leadership can see margin, cash flow, and leading indicators in time to act. This concept asks what leadership does with the capital those numbers reveal. It inherits everything before it: a documented strategy, accountable leaders, documented processes, an integrated stack, and numbers leadership trusts. Without a documented strategy, there is nothing to score a capital request against except the person making it.

YOUR BIGGEST 2027 BET HAS A SPONSOR.​
​DOES IT HAVE A CASE?

Most capital plans are last year’s run rate plus whatever the most persuasive executive asked for. That produces a budget. It rarely produces enterprise value.

This fall I published a piece on why a budget should be a decision about what the company is trying to become, not a forecast of what it will spend: https://tipofthespearventures.com/from-budget-to-enterprise-value-how-leaders-should-approach-budget-season/

Before your 2027 plan goes to the board, I will run one Capital Allocation Review with your leadership team. You leave knowing where your capital is compounding and where it is habit. If we do not find at least one line you would fund differently, you have lost one hour.

I am holding a limited number through December, while 2027 plans are still open. Reply “Capital Review” to reserve one.

THE PRINCIPLE

This week’s concept sits in Pillar 4, Finance + Capital: capital goes to the high-ROI initiatives tied to your growth strategy, not to whoever asks loudest.

Where You Stand

Pull the largest capital decision your leadership team approved last quarter. In one paragraph, write the ROI case that justified it and the strategic bet it served. In a second paragraph, write down who argued for it and how hard. If the second paragraph was easier to write than the first, that is your actual score.

The Failure Pattern

Capital gets allocated to whichever initiative made the most noise in the last leadership meeting, rather than the initiative with the strongest ROI tied to the stated growth strategy. Requests get approved on a first-come basis or on internal political capital rather than consistent evaluation criteria.

The Kotter Principle at Work

Kotter’s Step 3, Form a Strategic Vision, is the connective tissue. Capital allocation criteria that are not explicitly tied back to the documented strategic vision will drift toward whoever argues loudest. The vision has to be specific enough to actually score a capital request against, not so general that any initiative can be argued to fit it. The move: build explicit ROI-tied evaluation criteria for capital requests, connected directly to the strategic bets documented in Pillar 1. Every capital request gets scored against those criteria before approval, regardless of who is asking. Before the 2027 plan reaches the board, score its largest line items against those criteria and count how many still clear the bar.

The Win Condition

Every capital request, regardless of size, is evaluated against the same explicit criteria. Leadership can explain the ROI logic behind the last quarter’s largest capital decision without hesitation.

FROM THE CHAIRMAN

“Walk me through the ROI case for the largest capital decision you made last quarter. If the honest answer involves who argued for it hardest, this board has a capital discipline problem, not a capital shortage.”

MARKET INTELLIGENCE

Three signals from this week across Venture Capital, Private Equity, Family Offices, and Capital:

  1. Truelink Capital / Johnson Controls. Truelink Capital signed a binding agreement to acquire Johnson Controls’ global intrusion products business, including the DSC, Qolsys, and Visonic brands, and will run it as an independent company. Johnson Controls has been reshaping its portfolio around building solutions. Terms were not disclosed. (Security Info Watch, October 27, 2026: https://www.securityinfowatch.com/alarms-monitoring/alarm-systems-intrusion-detection/news/55414591/johnson-controls-to-sell-intrusion-business-including-dsc-and-qolsys) My read: A carve-out is a capital allocation decision made in public. Johnson Controls decided its next dollar compounds faster somewhere else. Truelink made the opposite bet, committing to fund new panels, sensors, and engineering capacity the parent was not going to prioritize. Same asset, two capital plans. Both boards face the same test this week’s Win Condition sets: can leadership explain the ROI logic behind the decision without hesitation?
  2. Michal Strnad / Delfin. Czech billionaire Michal Strnad has offered €30 billion for Delfin, the Del Vecchio family holding company and key shareholder in EssilorLuxottica, two people close to the matter told Reuters. Delfin is owned equally by eight heirs, and a sale would require near-unanimous agreement. (Reuters via Global Banking & Finance Review, October 29, 2026: https://www.globalbankingandfinance.com/czech-billionaire-strnad-offers-30-billion-essilux/) My read: Eight owners, one balance sheet, and no single person who decides where the capital goes. Reuters describes the heirs as increasingly at odds. When owners do not share a documented vision for their capital, the decision drifts toward whoever argues loudest, or it stalls until an outside offer forces one. A family holding company that intends to stay in the family needs criteria the next generation agreed to before the offer arrived.
  3. HSBC. HSBC announced a new share buyback of up to $1 billion with its third-quarter results. Pretax profit rose 32% to $9.63 billion, but revenue of $18.62 billion missed expectations and the shares fell 5.5% in Hong Kong. The bank is scaling back selected international businesses to focus on Asia and the UK. (finews.com, October 27, 2026: https://finews.com/news/english-news/74169-hsbc-reports-significantly-higher-third-quarter-earnings-share-buyback-stock-falls-5-5-percent) My read: A buyback is a statement about return. It tells shareholders that management sees no better use for that dollar inside the business right now. HSBC is exiting markets to concentrate capital where it believes returns are strongest. The market heard the revenue miss. The discipline being tested is whether capital freed by every exit gets scored against the strategy, or simply returned because no internal request made a strong enough case.

SAM SPEAKS

Recently I delivered “The Unrealistic Leader: Achieve Real Results by Being Unrealistic” to members of a professional association and a podcast. I speak to executive audiences on three core topics:

Scaling and Exiting the Business for Maximum Value. The leaders who capture maximum value at the table treat the exit as a strategy, not an event.

The Unrealistic Leader. The most dangerous thing a leader can do is become reasonable too early.

The Price Pressure Playbook. Buyers have a playbook. This talk gives sellers the 20 moves that counter it.

If your professional association or an upcoming conference is building its agenda to close out 2026 or plan 2027, let us connect: speaking@tipofthespearventures.com

FROM THE TIP OF THE SPEAR

Twenty-three percent (23%) of leaders in Deloitte’s Finance Trends 2027 survey said executive or board mandates, with no measurement process, are how they most often approve large AI and technology investments. Twenty-five percent (25%) require quantified ROI and a business case. The largest bets of the year are being approved on authority nearly as often as on evidence.

Where capital goes is the strategy. Everything else is the plan. Discipline means one set of criteria, tied to the documented growth strategy, applied to every request regardless of who is asking. It holds only when the vision is specific enough to say no to a request that sounds strategic and is not.

Each of this week’s capital moves put that discipline on display. Johnson Controls decided an intrusion business no longer fit its portfolio, and Truelink decided the same business deserved new investment. Eight Del Vecchio heirs are weighing a €30 billion offer without a shared view of what their capital is for. HSBC chose to return $1 billion to shareholders in the same quarter its revenue missed. Each decision will be judged on the case behind it, not the conviction of the people who made it.

Year-end is when the 2027 plan gets approved, and approval is where capital discipline holds or breaks. Ask the Chairman’s question this week: Walk me through the ROI case for the largest capital decision you made last quarter. If the honest answer involves who argued for it hardest, the 2027 plan will repeat the pattern at a larger number.

100% GUARANTEED.

Executive Performance Coaching for CEOs and senior leaders who are scaling something real. We define the results in writing before we start. If you are not satisfied with them, you do not pay.

DO NOT PAY ME UNLESS YOU GET RESULTS.

Reply “Coaching” or reach me directly: sp@tipofthespearventures.com

UNTIL NEXT TUESDAY

From the Tip of the Spear is my weekly publication for executives who are building something real. One issue, every Tuesday. A field report from active operator engagements, one principle with supporting data, and market intelligence from across my VC, PE, and family office network.

Sam Palazzolo, Tip of the Spear Ventures sp@tipofthespearventures.com +1 702.970.8847

Operator. Investor. Educator. Enterprise Value Strategist.​
Scaling organizations. Maximizing enterprise value.

Harnessing Chaos Through Curiosity

By

In the winter of 1961, MIT meteorologist Edward Lorenz wanted to rerun a weather simulation. To save time, he restarted the model midway, typing in a value from an earlier printout: 0.506 instead of the full 0.506127. He went for coffee. When he returned, the forecast had diverged so completely it looked like weather from a different planet.

The difference was less than one part in a thousand. The outcome was unrecognizable, and this rounding error changed science.

Lorenz had stumbled onto what we now call chaos theory and the principle at its center: sensitive dependence on initial conditions. In 1972, he gave it a more memorable name with a talk asking whether the flap of a butterfly’s wings in Brazil could set off a tornado in Texas.

Organizations are chaotic systems too. Markets shift, teams turn over, and strategies collide with reality. In my experience scaling more than fifteen organizations, the most consequential initial condition in every one of them was the same: who sits in the leadership seat.

Every Leadership Hire Is an Initial Condition

A résumé tells you where a leader has been. It cannot tell you how they will behave when the forecast breaks. Yet most executive hiring still leans on the résumé, a handful of interviews, and a gut call.

Small differences in how a leader is wired compound. A slight tendency to dismiss bad news becomes a pipeline built on hope. A slight tendency to chase every new idea becomes a team with twelve priorities and no traction. Twelve months later, the organization looks like Lorenz’s printout: unrecognizable from what was planned.

This is why, as a Hogan-certified practitioner, I use the Hogan Assessment as a pre-hire leadership assessment. Hogan measures personality through three lenses:

  • Hogan Personality Inventory (HPI): the bright side, or how a leader shows up on a good day.
  • Hogan Development Survey (HDS): the dark side, the leadership derailers that emerge under pressure, fatigue, or boredom.
  • Motives, Values, Preferences Inventory (MVPI): the inner compass, or what drives a leader and the culture they will build.

Together, they let you measure the initial conditions before you commit to them.

Curiosity: The Instrument for Reading Chaos

If chaos is unavoidable, the real question is which leaders can navigate it. Across my work with CEOs and boards, one behavior consistently separates leaders who harness chaos from those consumed by it: curiosity.

Curious leaders treat turbulence as information. A lost deal becomes a question about the buyer. A missed quarter becomes a question about the model. They do not need certainty to act. They need understanding, and they go get it.

Curiosity is not a single score in Hogan, but several scales map to it directly:

  • HPI Inquisitive captures imagination, openness to new ideas, and the appetite to explore how things could work differently.
  • HPI Learning Approach reflects how much a leader values learning and staying current, and whether they seek new knowledge or rely on what worked before.
  • MVPI Science reveals the drive to understand why. Leaders high on this motive prefer data to assumption and analysis to anecdote.

When these align, you have a leader who reads the system rather than reacting to it.

When Curiosity Becomes the Chaos

The butterfly effect cuts both ways. The same curiosity that reads chaos can create it. Under pressure, curiosity tends to either overextend or collapse, and the Hogan Development Survey shows how:

  • Imaginative: ideas arrive faster than the team can execute them, and strategy becomes a weekly reinvention.
  • Mischievous: testing limits becomes the point. Rules get bent to see what happens, and trust erodes quietly.
  • Skeptical: curiosity curdles into suspicion. Questions stop being about learning and start being about catching people out.
  • Cautious: curiosity shuts down entirely, and fear of being wrong replaces the desire to find out.

Here is the uncomfortable truth for anyone hiring: derailers almost never appear in a sixty-minute interview. Candidates present their bright side because that is what interviews reward. The dark side shows up in month four, when pressure arrives and the honeymoon ends. By then, the butterfly has already flapped.

The Strange Attractor: Curiosity Needs a Container

Lorenz’s work produced one more image worth borrowing. Plot his weather system over time and you get the famous Lorenz attractor: a path that never repeats itself, yet never escapes its bounds. Infinite variation inside a stable shape.

That is the leader you want. Exploratory, but anchored.

In Hogan terms, the boundaries come from HPI Adjustment, the composure to stay steady when results swing, and HPI Prudence, the structure and follow-through that turn ideas into execution. The MVPI values profile gives the shape its center of gravity, defining what the leader will protect when everything else is moving.

Curiosity without a container is chaos. Curiosity within one is strategy. The Hogan Assessment shows you which one you are hiring.

Sam Palazzolo
Operator. Investor. Educator. Enterprise Value Strategist.
Scaling Organizations. Maximizing Enterprise Value.

Harnessing Chaos Through Curiosity

You bought the tools. Nobody connected them.

By

ISSUE XXX

FROM THE TIP OF THE SPEAR

SAM PALAZZOLO

PwC’s 2026 Digital Trends in Operations Survey asked 767 leaders at U.S. companies with $100 million or more in revenue whether their technology investments were paying off. 89% gave at least one reason their tech investments have not fully delivered the expected results. Integration complexity topped the list. (PwC, April 2026: https://www.pwc.com/us/en/services/consulting/supply-chain-operations/library/digital-trends-operations-survey.html)

The tools were bought. The tools work. They do not work together. Each platform does its job inside its own division, and every question that crosses a division gets answered by a person with a spreadsheet. Nobody budgets for that person. Nobody reports on that spreadsheet. The cost shows up as slower answers, duplicate work, and a customer view nobody can produce on demand.

Pillar 3, Concept 2 of the Enterprise Value Playbook picks up where Concept 1 left off. Concept 1 asked whether core processes are documented. This concept asks whether the technology running those processes is integrated. It inherits everything before it: a documented strategy, accountable and aligned leaders, and documented processes. Integrating a technology stack without first documenting the processes running through it produces expensive tools nobody uses consistently.

YOUR NEXT SENIOR HIRE IS A $500K+ BET.​
​PLACE IT WITH DATA.

A growth company brought me a finalist for a senior leadership seat. Strong résumé. Strong interviews. The CEO wanted evidence before signing.

Within two weeks, the CEO had a Hogan assessment, a structured debrief, and a clear Go. The company hired knowing the strengths, the derailers, and what to manage in the first 90 days.

The Senior Hire Go/No-Go gives CEOs, boards, and PE operating partners a board-ready answer on VP and C-suite hires before the offer letter goes out. If the readout does not give you a clear Go or No-Go, you do not pay.

Have a finalist in front of you right now? Reply “Go/No-Go” before you sign.

THE PRINCIPLE

This week’s concept sits in Pillar 3, Operations + Technology: your technology stack is modern and integrated, and it supports scale without heavy manual workarounds.

Where You Stand

Pick one of your largest customers. Ask your team to produce that customer’s full relationship with the company across every division: contracts, orders, open issues, revenue. Time it. Count the systems it touches and the spreadsheets someone has to build to stitch them together. If the answer requires more than one system, the number of systems is your actual score.

The Failure Pattern

Multiple platforms performing overlapping functions run in parallel without integration. One division cannot see what another division sees or does. A large enterprise client, grown over fifteen years primarily through acquisition, is a live illustration of exactly this pattern at enterprise scale: legacy systems from each acquisition left in place under an if-it-is-not-broken posture, multiple CRM and sales-enablement platforms running without talking to each other, and a Big Four consulting firm identifying an estimated $1B a year left on the table as a direct result, not from a single failure, but from the cumulative cost of fragmented visibility.

The Kotter Principle at Work

Kotter’s Step 2, Build a Guiding Coalition, is essential here specifically because technology fragmentation is almost always a cross-divisional problem. No single division has both the authority and the incentive to fix it alone. A coalition with representation and authority across every affected division is what actually gets a fragmented stack unified, rather than each division optimizing its own corner of it indefinitely. The coalition’s first job: map the current state of the full technology stack before evaluating any new tool. Identify the specific integration gaps causing the manual workarounds, and prioritize closing those gaps over adding new platforms. Integration debt compounds faster than most leadership teams expect, and the fix gets more expensive every quarter it is deferred. Before a 2027 budget funds another platform, name the coalition that will own the integration, and give it authority in every division the platform touches.

The Win Condition

A cross-division question, what does this customer’s full relationship with us look like, can be answered from a single system, not reconstructed manually across several. New acquisitions have a defined integration timeline instead of an indefinite if-it-is-not-broken deferral.

FROM THE CHAIRMAN

“Can you tell me, right now, what a customer’s full relationship with this company looks like across every division? If that requires three phone calls and a spreadsheet, your technology is not supporting scale. It is disguising fragmentation.”

MARKET INTELLIGENCE

Three signals from this week across Venture Capital, Private Equity, Family Offices, and Capital:

  1. Salesforce / Braze. Salesforce agreed to acquire customer engagement platform Braze for about $5.66 billion in enterprise value, or $47.50 per share in cash. Salesforce expects Braze to complement all four layers of its architecture, including Data 360, Agentforce, and Marketing Cloud. Closing is expected in Salesforce’s fiscal 2028. (Salesforce press release, October 20, 2026: https://investor.salesforce.com/news/news-details/2026/Salesforce-Signs-Definitive-Agreement-to-Acquire-Braze/default.aspx) My read: Four layers is the integration surface. Each one is a place where Braze’s view of a customer and Salesforce’s view of the same customer either become one record or stay two. The press release describes the complement. It does not describe the timeline. That is the question this week’s Win Condition asks of every acquirer: a defined integration plan, or an indefinite if-it-is-not-broken deferral. Braze’s customers will learn which one they bought into.
  2. EQT / Qiagen. EQT Private Equity agreed to take molecular testing company Qiagen private at €46.50 per share, valuing it at about $12.1 billion including debt. EQT committed to support Qiagen’s strategy, operational footprint, and R&D. CEO Jonathan Pratt, in the role less than two months, said private ownership lets the company move faster. (MedTech Dive, October 23, 2026: https://www.medtechdive.com/news/qiagen-agrees-to-private-equity-takeover/833805/) My read: “Move faster” is a promise about systems as much as strategy. A new CEO under new ownership inherits every platform the business has accumulated, including the ones that do not talk to each other. Private ownership removes the quarterly clock. It does not remove the workarounds. The first test after closing is whether a cross-division question can be answered from a single system, or whether speed is still being bought with spreadsheets and phone calls.
  3. Atreides / Legora. Legora, a Swedish legal AI company, raised $550 million in a round led by Atreides Management at an $8.8 billion valuation. Annual recurring revenue has passed $200 million. The company says it grew from $1 million to $100 million in under 18 months, then added another $100 million in under six months. (The Next Web, October 21, 2026: https://thenextweb.com/news/legora-series-e-550m-8-8bn-valuation) My read: Growth at that pace is when stack decisions get deferred. A company that adds $100 million in six months runs today’s volume through systems chosen for a company half its size. The workarounds feel temporary because growth feels urgent. They are not temporary. Integration debt compounds faster than most leadership teams expect, and at an $8.8 billion valuation, every quarter it is deferred is priced into the next round.

YOUR 2027 BUDGET IS LAST YEAR
WITH A HAIRCUT.

Every October, management rolls forward last year’s run rate and negotiates percentages. That produces a budget. It rarely produces enterprise value.

This month I published a piece on why. A budget should not be a forecast of what the company will spend. It should be a decision about what the company is trying to become, and which investments will increase its value.

Read it here: https://tipofthespearventures.com/from-budget-to-enterprise-value-how-leaders-should-approach-budget-season/​

Before your plan goes to the board, I will run one Capital Allocation Review with your leadership team. You leave knowing where your capital is compounding and where it is habit. If we do not find at least one line you would fund differently, you have lost one hour.

I am holding a limited number for October. Reply “Capital Review” to reserve one.

FROM THE TIP OF THE SPEAR

Eighty-nine percent (89%) of leaders in PwC’s 2026 survey named at least one reason their technology investments have not fully delivered the expected results. Integration complexity topped the list. The money was spent. The systems were installed. The value is stuck between them.

A modern stack is not the newest set of tools. It is the fewest systems a cross-division question has to touch. Integration debt is a deferred capital decision, and it compounds every quarter nobody owns it. No single division can retire it alone, which is why the fix starts with a coalition that holds authority in every division the stack crosses.

Three very different deals put that question on the table this week. Salesforce is buying a platform it expects to complement four layers of its own architecture. EQT is buying a company whose new CEO wants to move faster. Atreides is backing a company that added $100 million of revenue in six months. Each one wins or loses on whether the systems underneath can keep pace with the plan above them.

Planning season is when the 2027 technology budget gets written. Fund the integration before the next platform. Ask the Chairman’s question this week: Can you tell me, right now, what a customer’s full relationship with this company looks like across every division? If the answer takes three phone calls and a spreadsheet, you are paying for fragmentation twice, once in software and again in the people who stitch it together.

100% GUARANTEED.

Executive Performance Coaching for CEOs and senior leaders who are scaling something real. We define the results in writing before we start. If you are not satisfied with them, you do not pay.

DO NOT PAY ME UNLESS YOU GET RESULTS.

Reply “Coaching” or reach me directly: sp@tipofthespearventures.com

UNTIL NEXT TUESDAY

From the Tip of the Spear is my weekly publication for executives who are building something real. One issue, every Tuesday. A field report from active operator engagements, one principle with supporting data, and market intelligence from across my VC, PE, and family office network.

Sam Palazzolo, Tip of the Spear Ventures sp@tipofthespearventures.com +1 702.970.8847

Operator. Investor. Educator. Enterprise Value Strategist.​
Scaling organizations. Maximizing enterprise value.

Sales promised it. Operations never agreed to it.

By

ISSUE XXIX

FROM THE TIP OF THE SPEAR

SAM PALAZZOLO

Grant Thornton’s 2026 AI Impact Survey asked 950 senior executives across 10 industries whether their workforce is fully ready to adopt AI. 39% of CIOs and CTOs said yes. 7% of COOs said the same. (Grant Thornton, July 2026: https://www.grantthornton.com/insights/articles/advisory/2026/without-c-suite-alignment-ai-performance-sputters)

Same question. Same survey. A 32-point spread between the leader who deploys the capability and the leader who runs the operation it lands in. Neither is wrong from inside their own function. Each is working from different information, on a different timeline, with a different definition of the word “ready.” Nothing forces the two answers into the same room. Eventually a customer does.

This is the second Pillar 2 concept in the Enterprise Value Playbook. Concept 1 gave every leader a named deliverable and a KPI. This concept asks what happens where those deliverables meet. A documented strategy, accountable leaders, documented processes, trusted numbers, a shared growth plan, and better decision tools still break at the handoff when no forum exists to confirm a commitment before it crosses a functional boundary.

EVERY FUNCTION HIT ITS PLAN.​
​THE CUSTOMER STILL LEFT.

Most broken commitments do not start with a bad team. They start between two good ones, at a handoff nobody owns.

The Enterprise Value Playbook is the diagnostic I use with leadership teams to find those handoffs before a customer does. Five pillars. Twenty concepts. Each one names the signal to score, the failure pattern to look for, and the condition that tells you it is fixed.

Download the Playbook: https://sampalazzolo.kit.com/8b67fefc9f

Score Pillar 2 with your leadership team before your 2027 plan goes to the board. Reply “Playbook” with your lowest score and I will tell you where I would start.

THE PRINCIPLE

This week’s concept sits in Pillar 2, Leadership + Talent: your leadership team communicates, aligns, and coordinates across functions before a commitment ever reaches the customer.

Where You Stand

Pull the last ten commitments your company made to a customer that took two or more functions to deliver: a delivery date, a custom term, a feature, a price. For each one, ask whether every function that had to deliver it confirmed it before the customer heard it. Then count how many of the ten broke. If nobody in the room can produce the list, that is your actual score.

The Failure Pattern

Sales commits to a delivery timeline operations never agreed to. Product ships a feature finance never priced. Each function is executing competently within its own silo, and the coordination failure only becomes visible once it reaches the customer, at which point it is significantly more expensive to fix than it would have been to prevent.

The Kotter Principle at Work

Kotter’s Step 5, Empower Broad-Based Action, is the fix. Silos persist because the structural barriers between functions, misaligned incentives, no shared forum, no shared vocabulary, are never actually removed. Removing the barrier is the work. A memo asking functions to communicate better is not. Establish a standing cross-functional sync at the leadership level, focused specifically on dependencies and handoffs, not general status updates. Every commitment that crosses a functional boundary gets confirmed by both functions before it becomes a customer-facing commitment. Planning season is when every function writes its 2027 commitments at the same time: put each one that depends on another function in front of both before the plan is final.

The Win Condition

Cross-functional commitments are confirmed by both sides before they reach the customer. When a dependency conflict does surface, it surfaces in the standing sync internally, not in a customer escalation.

FROM THE CHAIRMAN

“How many customer commitments have broken because two of your functions found out about each other’s decisions after the customer did? I do not want a culture answer. I want a number.”

MARKET INTELLIGENCE

Three signals from this week across Venture Capital, Private Equity, Family Offices, and Capital:

  1. Thoma Bravo / Proofpoint / Varonis. Proofpoint, a Thoma Bravo portfolio company, agreed to buy data security company Varonis for about $6.3 billion in cash, a 52% premium to its June 22 close. After closing, Proofpoint plans to integrate capabilities, align go-to-market efforts, and deliver a combined platform to more than 16,000 enterprises. (Thoma Bravo press release, October 15, 2026: https://www.thomabravo.com/press-releases/proofpoint-to-acquire-varonis-in-a-6.3-billion-transaction) My read: “Align go-to-market efforts” is one line in a press release. It is also where most combinations break. Two sales organizations will be selling a combined platform while two product teams are still building it and finance is still pricing it. That is this week’s failure pattern at $6.3 billion. The test for Proofpoint’s leadership is not whether the platform ships. It is whether every promise made to those 16,000 enterprises is confirmed by the function that has to keep it.
  2. GTCR + Elliott / CCC Intelligent Solutions. A GTCR-led group, with Elliott Investment Management, agreed to take CCC Intelligent Solutions private for about $6.1 billion, or $7.75 per share in cash. CCC sells software to the property and casualty insurance industry. Earlier this year, investors raised concerns about slowing growth and a slower-than-expected rollout of some newer products. (Reuters, via Insurance Journal, October 16, 2026: https://www.insurancejournal.com/news/national/2026/10/16/889163.htm) My read: A slow product rollout is rarely a product problem alone. A new product reaches a customer only when product, sales, implementation, and support all move on the same date. When one of them learns the date late, the rollout slips, and the customer is the first to notice. GTCR bought the platform. The first hundred days will show whether CCC’s leadership has a standing forum where those dates get confirmed before they become promises.
  3. Penske Corporation + Mitsui / Penske Automotive Group. Penske Corporation and Mitsui & Co. agreed to take Penske Automotive Group private at $212 per share, an enterprise value of about $16.3 billion. After closing, Penske will own about 64% and Mitsui about 36%. Roger Penske noted Mitsui has been a shareholder for 25 years. (Penske Automotive Group press release, SEC filing, October 15, 2026: https://www.sec.gov/Archives/edgar/data/0001019849/000114036126039664/ef20083688_ex99-1.htm) My read: Two owners with a quarter-century of working together now hold the entire company. That is the shared forum and shared vocabulary Kotter’s Step 5 asks for, built at the ownership level over decades. Private ownership also removes one competing timeline: the quarterly public market. The harder test sits below the board. The group runs 362 dealerships on both sides of the Atlantic, and the owners’ alignment only creates value if those operations confirm commitments with the same discipline.

SAM SPEAKS

This week I delivered “The Unrealistic Leader: Achieve Real Results by Being Unrealistic” to members of the Association of Revenue Cycle Professionals (ARCP). I speak to executive audiences on three core topics:

  • Scaling and Exiting the Business for Maximum Value. The leaders who capture maximum value at the table treat the exit as a strategy, not an event.
  • The Unrealistic Leader. The most dangerous thing a leader can do is become reasonable too early.
  • The Price Pressure Playbook. Buyers have a playbook. This talk gives sellers the 20 moves that counter it.

If your professional association or an upcoming conference is building its agenda to close out 2026 or plan 2027, let us connect: speaking@tipofthespearventures.com

FROM THE TIP OF THE SPEAR

Thirty-nine percent (39%) of CIOs and CTOs say their workforce is fully ready to adopt AI. Seven percent (7%) of COOs say the same. Thirty-two (32) points separate the leader who deploys the capability from the leader who runs the operation it lands in.

Alignment is not a culture trait. It is a structure. A standing forum where leaders confirm dependencies and handoffs, and a rule that no commitment crosses a functional boundary until both functions have confirmed it. Without that structure, every function executes competently, and the customer is the first to see the gap.

Every deal on this week’s tape carries the same exposure. Proofpoint has promised 16,000 enterprises a combined platform and an aligned go-to-market. GTCR is buying a company whose newer products rolled out slower than investors expected. Penske and Mitsui bring a quarter-century of alignment at the ownership level to 362 dealerships that now have to coordinate below it.

Planning season puts every function’s 2027 commitments on paper at the same moment. That is the cheapest moment the year offers to reconcile them. Ask the Chairman’s question this week: How many customer commitments have broken because two of your functions found out about each other’s decisions after the customer did? If nobody in the room can give you a number, the next broken commitment is already on its way to a customer.

100% GUARANTEED.

Executive Performance Coaching for CEOs and senior leaders who are scaling something real. We define the results in writing before we start. If you are not satisfied with them, you do not pay.

DO NOT PAY ME UNLESS YOU GET RESULTS.

Reply “Coaching” or reach me directly: sp@tipofthespearventures.com

UNTIL NEXT TUESDAY

From the Tip of the Spear is my weekly publication for executives who are building something real. One issue, every Tuesday. A field report from active operator engagements, one principle with supporting data, and market intelligence from across my VC, PE, and family office network.

Sam Palazzolo, Tip of the Spear Ventures sp@tipofthespearventures.com +1 702.970.8847

Operator. Investor. Educator. Enterprise Value Strategist.​
Scaling organizations. Maximizing enterprise value.

83% of CEOs say AI depends on people. Only 25% use it regularly.

By

ISSUE XXVIII

FROM THE TIP OF THE SPEAR

SAM PALAZZOLO

IBM’s 2026 CEO Study surveyed 2,000 CEOs and equivalent senior leaders across 33 geographies. 83% say AI success depends more on people’s adoption than on technology. The same CEOs say only 25% of their workforce uses AI regularly as part of their job. (IBM Institute for Business Value, May 2026: https://newsroom.ibm.com/2026-05-04-ibm-study-ceos-are-reshaping-c-suite-roles-for-the-ai-era)

Read those two numbers together. CEOs know the constraint is people, not technology. Three in four of those people are not using it regularly. The capability gets bought, handed to IT or a data team, and launched. The rest of the organization is never authorized to act on what it produces. A model only IT can act on does not change how the company decides. It changes what the company spends.

This is the second Pillar 1 concept in the Enterprise Value Playbook, and the arc now returns to where it started. The first five concepts built the inputs: a documented strategy, accountable leaders, documented processes, trusted financial visibility, and a growth plan every function can explain. This concept asks whether the decisions made against all of it are getting faster and better. AI accelerates whatever decision-making pattern already exists. Applied to a disciplined process, it compounds good judgment. Applied to a fragmented one, it produces confident, fast, wrong answers.

YOUR 2027 BUDGET IS LAST YEAR​
​WITH A HAIRCUT.

Every October, management rolls forward last year’s run rate and negotiates percentages. That produces a budget. It rarely produces enterprise value.

This month I published a piece on why. A budget should not be a forecast of what the company will spend. It should be a decision about what the company is trying to become, and which investments will increase its value.

Read it here: https://tipofthespearventures.com/from-budget-to-enterprise-value-how-leaders-should-approach-budget-season/​

Before your plan goes to the board, I will run one Capital Allocation Review with your leadership team. You leave knowing where your capital is compounding and where it is habit. If we do not find at least one line you would fund differently, you have lost one hour.

I am holding a limited number for October. Reply “Capital Review” to reserve one.

THE PRINCIPLE

This week’s concept sits in Pillar 1, Strategy + AI: you use data and technology, including AI where relevant, to make faster and better decisions.

Where You Stand

Ask your leadership team to name one decision made last quarter that went differently, in direction or in speed, because of a data or AI capability you own. Then ask who outside IT is authorized to act on what that capability produces. If the room goes quiet on either question, that is your actual score.

The Failure Pattern

AI gets treated as a bolt-on tool assigned to IT rather than a capability embedded in how decisions actually get made. Leadership adopts a dashboard or a model, celebrates the launch, and six months later cannot point to a single decision that changed because of it. The tool exists. The decision-making pattern underneath it never did.

The Kotter Principle at Work

Kotter’s Step 5, Empower Broad-Based Action, is the relevant failure point here. Organizations frequently hand a powerful new capability to a narrow group, usually IT or a data science function, without removing the structural barriers that prevent the rest of the organization from acting on what it produces. A predictive model nobody outside of IT is authorized to act on is not a decision-making improvement. It is a report nobody reads. Identify the three highest-stakes, highest-frequency decisions in the business before selecting any tool. Map how those decisions get made today, who is involved, what data they use, how long it takes. Apply AI specifically to accelerate or improve that mapped process, not as a separate initiative competing for leadership’s attention. The tool serves the decision. The decision never serves the tool. Budget season is the natural moment to apply it: before another AI line item gets funded for 2027, name the decision it is meant to change and the people authorized to act on it.

The Win Condition

Leadership can name a specific decision that changed, in direction or in speed, because of a data or AI capability in the last quarter. The tool has a named owner accountable for adoption, not just for implementation.

FROM THE CHAIRMAN

“Tell me about a decision this quarter that would have gone differently without the data or AI capability you are describing. If you cannot name one, you have bought a tool, not changed how you decide anything.”

MARKET INTELLIGENCE

Three signals from this week across Venture Capital, Private Equity, Family Offices, and Capital:

  1. KKR / Gen II Fund Services. KKR agreed to acquire Gen II Fund Services from Hg and General Atlantic at a total enterprise value of $5.1 billion. Gen II administers funds for more than 275 private capital managers representing over $2 trillion in assets. Since Hg and General Atlantic invested in 2020, Gen II’s revenue and EBITDA have quadrupled, and Hg credits the team with driving AI and automation across client onboarding and bank reconciliations. KKR plans further investment in AI-enabled solutions and a broad-based employee ownership program. (General Atlantic press release, October 6, 2026: https://www.generalatlantic.com/media-article/kkr-to-acquire-gen-ii-fund-services-for-more-than-5-billion-from-hg-and-general-atlantic/) My read: Look at where the AI went. Not a strategy deck, not an innovation lab. Two named, high-frequency processes: onboarding a client and reconciling a bank account. That is the right order: pick the decision, then the tool. The employee ownership program matters as much. Kotter’s Step 5 is about removing the barriers that keep the broad organization from acting. Ownership gives every employee a reason to act on what the tools produce.
  2. Schneider Electric / PTC. Schneider Electric agreed to acquire PTC, the Boston maker of computer-aided design and product lifecycle software, in an all-cash deal valued at $22.6 billion. PTC shares closed up 33%. Schneider shares fell 10%. Both companies are adding AI features to make better use of the data their software collects, and analysts described the combination as a large industrial data-management platform. (The Boston Globe, October 5, 2026: https://www.bostonglobe.com/2026/10/05/business/schneider-electric-ptc/) My read: Schneider did not pay $22.6 billion for a model. Models are available to everyone. It paid for the engineering and operating data that tells a model what is true inside a specific product and a specific plant. A model without that context produces confident, fast, wrong answers. The 10% markdown is the board-level question in public: will the combined company change how its customers decide, or will it sell them more software?
  3. Wittington Investments / Boots. Wittington Investments, the Weston family holding company behind Loblaw and George Weston Ltd., agreed to buy UK pharmacy chain Boots from Sycamore Partners for US$8.9 billion (about C$12.7 billion), including debt. Fairfax Financial will contribute up to US$2.3 billion and hold 50% after closing. Wittington keeps operational control, and Galen Weston becomes chairman. One analyst expects the two businesses to share best practices, and possibly infrastructure, with Shoppers Drug Mart. (The Canadian Press, via BNN Bloomberg, October 7, 2026: https://www.bnnbloomberg.ca/business/company-news/2026/10/07/family-behind-canadas-biggest-grocery-chains-buys-uk-drugstore-boots/) My read: The Westons have owned a national pharmacy chain in Canada since 2014. They are not buying Boots to learn how pharmacy decisions get made. They already know which decisions matter. Family capital split the economics and kept the decision rights in one place. That is the sequence this concept demands: know the decision first, then bring the capital and the tools to it.

SAM SPEAKS

Later this month I deliver “The Unrealistic Leader: Achieve Real Results by Being Unrealistic” to members of the Association of Revenue Cycle Professionals (ARCP). I speak to executive audiences on three core topics:

  • Scaling and Exiting the Business for Maximum Value. The leaders who capture maximum value at the table treat the exit as a strategy, not an event.
  • The Unrealistic Leader. The most dangerous thing a leader can do is become reasonable too early.
  • The Price Pressure Playbook. Buyers have a playbook. This talk gives sellers the 20 moves that counter it.

If your professional association or an upcoming conference is building its agenda to close out 2026 or plan 2027, let us connect: speaking@tipofthespearventures.com

FROM THE TIP OF THE SPEAR

Eighty-three percent (83%) of CEOs say AI success depends more on people’s adoption than on technology. The same CEOs say twenty-five percent (25%) of their workforce uses AI regularly. That gap is the failure pattern in two numbers.

A tool is not a decision capability. It becomes one when someone names the decision it serves, maps how that decision gets made today, and authorizes the people closest to the work to act on what the tool produces. Until then, AI sits with IT, produces reports, and changes nothing but the budget line.

This week the market showed what the alternative looks like. KKR paid $5.1 billion for a fund administrator that pointed AI at two specific processes, onboarding and reconciliation, and plans to put ownership in its employees’ hands. Schneider Electric paid $22.6 billion for the engineering data that gives industrial AI something true to work from. The Weston family bought Boots with a pharmacy operating playbook already in hand, and kept the decision rights in one place.

Budget season is where this gets decided. Every 2027 plan has an AI line in it. Ask the Chairman’s question this week: Tell me about a decision this quarter that would have gone differently without the data or AI capability you are describing. If you cannot name one, you have bought a tool, not changed how you decide anything.

100% GUARANTEED.

Executive Performance Coaching for CEOs and senior leaders who are scaling something real. We define the results in writing before we start. If you are not satisfied with them, you do not pay.

DO NOT PAY ME UNLESS YOU GET RESULTS.

Reply “Coaching” or reach me directly: sp@tipofthespearventures.com

UNTIL NEXT TUESDAY

From the Tip of the Spear is my weekly publication for executives who are building something real. One issue, every Tuesday. A field report from active operator engagements, one principle with supporting data, and market intelligence from across my VC, PE, and family office network.

Sam Palazzolo, Tip of the Spear Ventures sp@tipofthespearventures.com +1 702.970.8847

Operator. Investor. Educator. Enterprise Value Strategist.​
Scaling organizations. Maximizing enterprise value.