Are private equity organizations knocking on the door of your firm? Have tech advancements helped reduce head count while increasing profitability? It may seem that growth is washing up over the sides of the boat as you paddle merrily along. But as noted in the
When that time comes, you want to be prepared with a proven model for achieving strategic organic growth. My approach focuses on three elements: services, distribution channels and targets (targeted buyer groups), or SCT. The formula was born of my love of fishing Lake Lanier near my home in Atlanta. I was consistently unsuccessful when a fellow fisherman suggested I was using the wrong bait for crappie, a popular freshwater fish. He also advised that if I wanted to catch crappie I was at the wrong end of the lake. Once I changed my bait (from artificial lures to live crickets) and my location (from the north end of the lake to the south) I was unstoppable.
The parallel with firm growth and success jumped out at me like an excited late-summer crappie on the line. After rethinking the service (the bait) and the distribution channel (the location) my success with my target buyer group (the crappie) was guaranteed. The process of getting the needed information (my conversation with the fisherman) was what came to be known, as I refined the process, as the "research call," the ingathering of intel and insight from those in the know.
Services, distribution channels and targets are the elements I assess at the beginning of a consulting engagement, and at every stage of the process. It's a matter of constantly evaluating the relative knowledge of each element and shoring up further discovery where indicated. Let's unpack some of the details.
Throughout the consulting process with firm leaders, I look for strong performance within the three elements. In my mind, I assign a point value of one to 10 on each, the highest level of strategic growth readiness.
- Services. When the service element is strong, a firm's offerings are innovative, differentiated, properly tested with an early adopter program, and properly priced and packaged. These are just some of the common attributes I review with service-line and industry leaders to assess service/market strategy fit. If, for example, they've never heard of or conducted an early-adopter program, we discuss how it's optimally done and what they can expect from it. A strong program will not only confirm service/market fit but will enable market success. Much depends upon the early adopter choice and the critical role they play beyond providing feedback on the service.
- Distribution channels. The definition of channels is "where you and the targeted buyers find each other in great quantities." It's where the targeted species of fish are congregating. Are the distribution channels the best ones? Has the leader identified enough of them? Do they know how to align the firm's interests with the channel's interests? Is the firm relying on outdated channels to find the targets? Identifying the channel keepers' goals and helping them achieve them is the secret. This requires a commitment to delve deep and understand how they see their role in their organization. Channels and channel keepers are typically thought leaders, vendors and competitors. Sometimes they're likely buyers.
- Targets. Your targeted buyer group should be well-defined and properly segmented. You should know how many subspecies of fish are in each segment (market sizing). It's the granularization of your market at this level that begins the process of target market selection. Evaluate your competition to understand who else is fishing for the same subspecies. Research calls clarify your understanding of your target market's needs and preferences to ensure you're feeding them the services they wish to consume. If not, tailor the offerings to stay relevant and top of mind.
Whether you're sitting in a boat on a lake waiting for fish or sitting in front of a channel keeper assessing their objectives, aligning your services, channels and targets at the optimal level of understanding will unlock extraordinary success. SCT-based strategy reveals itself over time and is continually changing with market conditions. Bear in mind that the process of discovering these combinations is not sequential but is a continuous refinement of the three elements.
Got all the fish you can handle for the moment? Great news. But remember, there's nothing more certain than change, and you want to be ready when it comes.
