Company’s Next Move:
What You Could Be Doing Differently
By Kenneth H.
Is your company taking advantage of market churn and chaos to
refresh your growth strategy? Regardless of company size, stage or
industry …everyone has felt some impact from the recent years’
economic turmoil. For many it has been devastating requiring them
to significantly shrink their business, layoff employees, close
facilities and hunker-down hoping that the business cycle works its
way to the up-swing. And for some, worse yet, forced to file for
bankruptcy and liquidate. For others the impact has been more of a
mild distraction, causing worry and distress in markets and niches
that have otherwise continued to flourish. To take an optimistic
view, the exciting part of a crisis like we have experienced in the
last two years is the ability to easily effect change.
Think about it. When business is good, the company is
profitable and customers are happy …it is difficult to spur
improvements, reinvent what’s inevitably going to be obsolete or
make bold moves. The risk of rocking the boat or the inertia to stay
the course when things are working can be difficult to overcome.
But when crisis hits, everyone - employees, suppliers, customer,
lenders and shareholders - expects action. This can create an
environment enabling leaders to make strategic moves and strengthen
their company’s market position to compete in the next wave of
economic growth or to shore-up their position in the event of a
What is your company doing differently to take advantage of
the opportunity to change? What strategic move has your team
embraced? Start the process by reviewing the direction of the
goals and objectives of the shareholders.
company’s strategic plan with a fresh set of eyes and consider
the basic growth strategies that are used to navigate the ramp
and emergence of industries or to avoid being squeezed-out when
a market contracts.
“secret sauce” of the company, and how the business needs to be
competitively positioned and differentiated.
activities and strategies to sustain or move the business into a
leading position to grow value and provide for even greater
Once the direction of the company is clear, management can
develop the strategy to meet the future desired state. This should
result in initiatives that will move the company forward.
A common question is “how do we think about growth
strategies?” From a big-picture perspective there are two
fundamental approaches -- organic (internal) and external. While
the two intersect and overlap at times, and both can involve
investment, we can separate them for discussion.
1. Organic Strategies: involve leveraging the strength
of the existing business and building from within. For example, this
approach could mean accelerating penetration in existing markets
through new sales initiatives. It could also mean developing new
products / services, geographically expanding, or finding new
distribution or delivery channels.
2. External Strategies: tend to involve other
companies and investment outside of the current business. With one
or more of numerous strategic aims, a common external growth
strategy is the acquisition of another company to quickly capture
customers, add capabilities, or access new technologies. Sometimes
the same objectives can be achieved with less risk and similar
benefits by entering into strategic partnerships or joint ventures.
Companies in a defensive posture may consider merging with a
competitor to gain cost efficiencies or shed weaknesses while
gaining complementary strengths. Keep in mind that combining two
poor performing companies doesn’t necessarily make a better company;
we suspect there is evidence to the contrary.
An interesting dynamic is playing out in many industries now
- good companies with bad balance sheets need capital and can’t get
it. They are being forced to sell or trade at distressed levels.
Some of these good companies over leveraged themselves and others
are in a precarious position because of portfolio rationalization by
their current investors. Either way, this is creating a buying
opportunity for stronger players to strengthen their position or
access new markets with much less risk.
Strategy must be coupled with solid operating execution …all
the plans in the world don’t matter if the business can’t do what it
commits to with the resources it can harness. Consider increasing
the operating tempo of the company and challenge performance
expectations. In good times, many companies reach a level of
operating performance that is okay, but not stellar, and the team
settles-in. It is all too easy not to drive the extra mile required
to excel when there is no external pressure or the situation isn’t
critical. With the increased level of unemployment and flux in the
labor markets, the opportunity may exist to upgrade talent and
augment the team to assure a strong foundation to build on.
Execution starts with having the right team.
Lastly, don’t be afraid to trim the losers or weak players
…that is, trim the products, services, customers, suppliers and
employees that are draining the organization or distracting the
company from focusing on the value-creating forward-looking
Read other articles and learn more about
Kenneth H. Marks.
[Contact the author for permission to republish or reuse this article.]