How we accelerate business value
We have a well-defined, three phase process to accelerate business value:
- Perform a business diagnostic
- Build a strategic plan
- Create an implementation program
The last step is the most critical. The best laid plans, if they are not implemented effectively, have little to no value. Implementation has been a focus of our founder’s career, including developing his course at Stanford Business School on Corporate Strategy & Implementation (a part of a two course elective series on the implementation of strategy), throughout his work at McKinsey & Company and continuing into his many roles with middle market private businesses.
Perform a business diagnostic
We begin by reviewing your business with the eyes of a potential buyer, identifying distinctiveness & vulnerabilities. We view your business from the fundamental framework of the “Business Value Equation” which is how most private equity buyers frame the value of businesses that they invest in. By analyzing your business in the same way as the ultimate buyer does, we make sure that your focus is on the drivers that make meaningful difference in the value of your business. You can learn more about our process in how we identify opportunities.
Build a strategic plan
The next phase of our work is based around building a strategic plan. Many business owners are full of ideas for growth, but fail to put the resources in place to really make them a reality. Others pursue too many ideas and so none of them get traction. Some owners are so consumed with the “day-to-day” of managing the business that they never step back to recognize the levers that truly drive business value.
We start with a focus on the key drivers of value. We develop a clear perspective from our business diagnostic. Then we develop a set of strategic options for how you can choose to change the trajectory of your business. As is the case with almost all businesses, you will probably have more opportunities than you have the time and resources to pursue. We next create a prioritization framework, measuring the size of the opportunity, its probability of success, and the resources required to pursue. From this we build the go-forward strategy and the financial model to frame future decisions.
In past engagements, this work has been highly impactful. One client that was growing over 10% per year by expanding distribution, but they were under investing in new product development. We put in place a new strategy, a team focused on new product development, and the infrastructure to support it. New product launches increases five-fold and growth rate doubled. With another client, they we growing very rapidly but margins were low (<10%). We identified that they were focused on product sales but that there was a very valuable service that they could bundle with the product with much higher margins. Margins on those sales doubled. This is our process. Each business has a unique set of opportunities and capabilities with which to drive value. The key is to identify them and then implement a better model.
Create an implementation program
We then develop a program that implements the best you can do with the resources at hand. Many businesses can enjoy significant improvements in performance simply by refocusing current resources on the right objectives. Next we evaluate the benefit of bringing in new resources (new business leaders, additional staff, outside experts). Often, middle market business underinvest in management talent or fail to realize the efficiencies by bringing in experts with targeted skills that can make a meaningful difference. For example, we have lean operations experts that can help businesses implement a superior operating model which increases capacity, reduces cost and improves time-to-market.
We then work with you, your management team, and targeted outside experts who bring critical skills and knowledge to your business to make sure your strategy gets implemented. We can play multiple roles as a catalyst to your program – all the while focused on making sure that your team develops the capabilities to sustain lasting improvements.