We’ve done a lot of work over the last several years with middle market companies (independent, public, private equity owned) as they confront decisions on how to scale at a strategic point of inflection.
Along the way, we’ve learned a few things about how to help these organizations with high aspirations yet limited resources – and it comes down to getting laser focused by answering 3 questions:
WHY am I at a strategic point of inflection?
WHAT needs to change – strategically, operationally, organizationally, culturally, to capitalize and scale?
HOW can I get creative with resources to accelerate results during the transition?
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WHY am I at a strategic point of inflection?
You are at a strategic point of inflection when one or both of these statements are true:
Your market environment has changed meaningfully.
· Example: A client’s buying behavior has shifted from individual product purchases to one demanding comprehensive solutions with services wrapped around products. Neither your offerings nor your sales & marketing capabilities are built to meet that need. Meanwhile, competitors are emerging and joining forces to provide comprehensive solutions, and you are losing market share at an increasing pace.
On the other hand, if you’re losing share because your sales force is understaffed or failing to close deals with a similar offering to competitors, you are not at a strategic point of inflection. (You’ve got an execution problem and you’re at the point of hiring a new sales leader to execute your strategy).
Your expectations and goals have changed meaningfully.
· Example: You’re in a stable, growing market, maintaining share, and growing profitably. However, the private equity firm that just acquired you sees the opportunity for your business to penetrate the market more deeply and double your growth rate and market share. Expectations are high. The bar is raised considerably. You are at a strategic point of inflection, because what got you here … will not get you there.
WHAT needs to change in order to scale and meet the challenge? Look at Strategy, Operations, Organization and Culture; within these dimensions, focus on changing where you’ll get the greatest leverage.
Are you playing in the right market spaces? Following the examples above, the answer may be Yes, and there’s no need to shift your market focus. However, dig deep to assess whether the markets you play in are sufficient to meet your elevated goals.
Are your capabilities sufficient to win in the market? In the above example, clearly not. It’s time to change your “how to win” strategy by adjusting your offerings and investing in your sales force to evolve to a more competitive place.
Are your processes and systems sufficient to meet the market at a scale and achieve new goals? In the example above, it may be time to change your product development and account management processes to scale comprehensive solutions with services wrapped around products.
In order to address the market change, meet the new goals, and deliver on the new strategy, do you have the right players in the right roles? Assess your gap at a leadership level first, and then at the level of staff and execution. Be selective about where you invest to add the greatest leverage.
In order to evolve your offerings and go-to-market approaches from stand-alone products to integrated services wrapped around products, be purposeful about how you’ll evolve your culture – in the example above, evolve toward collaboration, customer-focused behaviors and service mentalities on top of disciplined silos and internal process orientation.
HOW will I get creative with resources to accelerate results?
Lack of adequate resources is a common challenge for middle market companies – the problem is compounded when you’re trying to scale and win at a strategic point of inflection.
A few tips beyond the obvious steps of hiring new talent:
· Collaborate with customers and vendors on innovations
· Leverage and partner with academia and government programs to gain access to technologies, talent and expertise
· Get the most out of your owners’ resources as well as your professional vendors (accountants, lawyers, bankers, consultants, insurance providers, technology experts)
· Get active in professional networks and organizations that exist to help you scale. One strong example is CEO Connection. Their tagline says it all –CEO’s helping CEO’s scale through points of inflection.
Bottom line …
As a middle market company with high aspirations and limited resources, get focused and stay focused by understanding WHY you are at a strategic point of inflection, determine WHAT specific, achievable changes to strategy, operations, organization and culture will make the greatest difference, and get creative about HOW you will use resources to generate momentum and deliver better results faster through the transition.