Achieving Hyper-Growth: Strategic Plan (Part 3 of 4)
Private Equity firms purchase Portfolio Companies with the intent to add value and maximize their growth potential, but it’s no surprise that achieving successful growth is complex – oftentimes accompanied with unforeseen challenges.
Portfolio companies today are under enormous pressure to achieve hyper- growth, sustain constant innovation and successfully execute their business strategies – all while maintaining existing operational efficiencies and costs. But once you acquire a new portfolio company, where does your growth plan start? What needs to be addressed immediately? What are your long term goals? How much can you fund? What has been working?
In a series of blog posts, we will discuss the four challenge areas that have the most impact on a portfolio company’s success and the best approaches to address them head on. The third area that we will explore is the importance of a Strategic Plan.
Challenge: Is there a clear Strategic Roadmap for executing your company’s new growth initiatives?
Developing a clear strategic roadmap is a key ingredient to your growing portfolio company’s success. A Strategic roadmap aligns your People, Process and Technology initiatives with your organization’s business objectives, and establishes actions to achieve the new objectives. Without a defined roadmap, your portfolio company will lack a clear direction on moving forward.
A Strategic roadmap should incorporate your company’s current state and culture into a series of precise steps to transform your businesses to its desired future-state vision. It’s vital to gather information from various groups of internal and external stakeholders, as well as cross sections of current and past customers and employees – both low and high profile – to create a clear picture of your current state before moving forward.
Once your future goals have been identified, ranking growth opportunities across the key dimensions of business impact, risk, cost and time will prioritize, review and finalize your list of initiatives so focus can turn to execution.
Possessing the ability to execute the developed strategic roadmap can make or break your portfolio company’s success. What is the primary pitfall of strategic plan execution? NOT STICKING TO THE PLAN! It’s extremely easy for companies to fall back into their tactical day to day activities, which is why communication is key when rolling out new strategic initiatives. Plan on investing a significant amount of time to develop and deliver communication to all employees in your company, striving to eliminate gaps where misinformation and confusion can develop.
Without good communication, affected groups will fill the void with their own reality, creating rumors or innuendos that often have negative themes attached to them. Effective leaders understand they can only be productive if their organization(s) embrace and support their strategy, meaning successful execution relies on exceptional focus, commitment and communication. Without these ingredients your company will struggle to achieve its desired goals.
A “success” or “change” network can be a useful tool to help manage communication voids. These types of networks engage personnel at various levels in your organization to reinforce and proactively push the salient communication points of the strategic plan. These change agents form a network that develop and control any swells of negative sentiment. A success or change network is an effective technique for continual reinforcement of strategic directives and will encourage employees at all levels to exhibit leadership behavior, and build a collaborative and communicative culture within your organization.