Grow your business workshop

Start Planning to
Grow
IDENTIFY YOUR BEST GROWTH PATH AND START
CREATING A PLAN

Rules of Engagement
One speaker at a time
Save war stories for happy hour
No ideas are “dumb”
Accept and give criticism with good nature
We’ll do our best to start on time, end on time
Cell phones on silent
If you must take a call please leave the room
2/11/2018 COPYRIGHT © 2017 VINSON & VINSON, LLC ALL RIGHTS RESERVED 1

No Consulting

Different Views of Strategic Planning
The Design School: strategy formation as a process of conception
The Planning School: strategy formation as a formal process
The Positioning School: strategy formation as an analytical process
The Entrepreneurial School: strategy formation as a visionary process
The Cognitive School: strategy formation as a mental process
The Learning School: strategy formation as an emergent process
The Power School: strategy formation as a process of negotiation
The Cultural School: strategy formation as a collective process
The Environmental School: strategy formation as a reactive process
The Configuration School: strategy formation as a process of transformation
Source: Henry Mintzberg, Strategy Safari, McGill University

Business Growth Planning Courses
Four Months: “Strengthen Your Business”
Five days: “Leading Strategic Growth and Change”, $9,850
Four weeks: “Business Growth Strategy”
Four days: “Delivering Business Growth”, $7,300
Four days: “Surge and Grow”, $8,500
Columbia
Business School
University of
Virginia
Northwestern
Kellogg
Babson
College

Skim the Top
DEEP DIVE FAST RESULTS

The Plan is not the Objective
“In preparing for battle I have always found that plans are useless, but planning is
indispensable. “
◦ Dwight D. Eisenhower
“Plans are of little importance, but planning is essential.”
◦ Winston Churchill
“Life is what happens to us while we are making other plans.”
◦ Allen Saunders – American cartoonist
“The best laid schemes o' mice an' men gang aft agley.”
◦ Robert Burns, Collected Poems of Robert Burns
“Plans are less important than planning.”
◦ Dale McConkey- American author
“No plan survives contact with the enemy.”
◦ Field Marshall Helmuth Karl Bernhard Graf von Moltke

Orientation – 10 minutes
Developing Understanding – 5 Minutes
Growth Mechanics – 10 minutes
Corporate Skills Survey – 20 minutes
Identifying Corporate Capabilities and Products – 25 minutes
10-minute break
Developing Your Strategic Intent – 25 minutes
Core Competencies and Strategic Correspondence – 30 minutes
Lunch – 1 hour
Introduction to Growth Programs – 10 minutes
Identifying and Manipulating Growth Levers – 30 minutes
Forming Growth Programs, Strategic Objectives – 20 minutes
Managing Growth Programs – 15 minutes
Miscellaneous Growth Topics – 15 minutes
Final Q&A and Discussions – 20 minutes
Conclusion and Next Actions -10 minutes

This is about your company,
not about you.
You are an outside
consultant tasked to spark
company growth.

Developing
Understanding
ORIENTING OURSELVES TO GROW

“Business Development”
More
Leads
More
Prospects
More
Closings
More
Customers
Better
Customer
Service
More
Repeat
Customers
and Larger
Orders
Greater
Revenue
(“Business
Development”)

Your
Business
Strategic
Partnerships
Organizational
Development
Market
Development
Financial
Management
Management
Development
Vision and
Purpose
Monetization
Operating
Model
Invention and
Innovation
Assets
Development
Internal Development

Your
Business
Market
Dynamics
Legal and
Regulatory
Competition
Suppliers
General
Economy
Social and
Community
Environment
Technology
Development
General
Knowledge
External Forces

Strategic Intent
Core Capabilities (support
Strategic Intent)
Growth
Program
(Objectives
utilizing...)
Growth
Levers
...
Growth Program (Objectives and
structure utilizing...)
Growth Levers (producing...)
New markets, new products, increased
market share, efficiency, acquisitions,
etc.
Core
Capability
(supports
Strategic
Intent)
Growth
Program
(Objectives
utilizing...)
Growth
Levers
...
What you intend
Your fundamental abilities
How you will grow
Using the things you control
Resulting in growth artifacts

Growth Mechanics
THREE WAYS TO GROW PHYSICALLY

4 Growth Mechanisms
Organic growth
◦ Gradually increase
sales
◦ Resulting revenue
growth
◦ Use retained earnings
to increase:
◦ Manpower
◦ Assets
◦ Product lines
◦ Market penetration
◦ Market diversity
◦ Etc.
◦ Generally slower
Acquisitive growth
◦ Organic
◦ Period of organic
growth keeping
retained earnings
◦ Use retained earnings
to acquire
◦ Sponsored
◦ Large debt placement
or equity issue
◦ Use proceeds to
acquire
◦ Generally faster but more
risk
◦ Possible ownership
dilution
Divestiture
◦ Sell off an
underperforming
unit
◦ Use the proceeds
to grow other units
or acquire
◦ Immediate value
increase if
underperforming
Joint Venture
◦ New firm in
partnership with
synergistic
company
◦ Immediate value
increase
but hard to
manage
◦ Agency issues

Organic Growth Approaches
Market
Penetration
Market
Development
Alternative Channels
Product Development
New Products for New Customers
Risk and Cost
Lower
Higher
More product to
same customers
More product to
new customers
New channels
same markets
New products
same customers
New products
new customers

Acquisitive Growth Methods
Organic
◦ No distributions
◦ Build up retained earnings
◦ Generally smaller targets
Sponsored
◦ Equity sales, debt
◦ Medium to large targets
◦ Questions of equity dilution and/or debt
servicing
Collaborative
◦ Joint ventures
◦ Questions of control
◦ Questions of risk distribution
◦ Questions of appropriate partners
◦ Generally medium to large targets
2012 Study by Bain Capital

Examples of Linkages Between Business and Acquisition Plan Objectives
Business Plan Objective Acquisition Plan Objective
Financial: The firm will
Achieve rates of return that will equal or exceed its cost of
equity or capital by 20??
Maintain a debt/total capital ratio of x%
Financial returns: The target firm should have
A minimum return on assets of x%
A debt/total capital ratio  y%
Unencumbered assets of $z million
Size: The firm will
Be the number one or two market share leader by 20??
Achieve revenue of $x million by 20??
Size: The target firm should be at least $x million in revenue
Growth: The firm will achieve through 20?? annual average
Revenue growth of x%
Earnings per share growth of y%
Operating cash-flow growth of z%
Growth: The target firm should
Have annual revenue, earnings, and operating cash-flow
growth of at least x%, y%, an z%
Provide new products and markets of x% by 20??
Possess excess annual production capacity of x million units
Diversification: The firm will reduce earnings variability by x%. Diversification: The target firm’s earnings should be largely
uncorrelated with the acquirer’s earnings.
Flexibility: Achieve flexibility in manufacturing and design. Flexibility: Target should use flexible manufacturing techniques.
Technology: The firm will be recognized by its customers as the
industry’s technology leader.
Technology: The target firm should possess important patents,
copyrights, and other forms of intellectual property.
Quality: The firm will be recognized by its customers as the
industry’s quality leader.
Quality: The target firm’s product defects must be x per million
units manufactured.
Service: The firm will be recognized by its customers as the
industry’s service leader.
Warranty record: The target firm’s customer claims per million
units sold should be not greater than x.
Cost: The firm will be recognized by its customers as the industry’s
low-cost provider.
Labor costs: The target firm should be nonunion and not subject to
significant government regulation.
Innovation: The firm will be recognized by its customers as the
industry’s innovation leader.
R&D capabilities: The target firm should have introduced at least x
new products in the last 18 months.

Collaborative Growth – Joint
Ventures
Two companies agree to form a third to:
◦ Attack new markets
◦ Exploit new products or technologies
◦ Spread core competencies across broader product base
◦ Provide greater resources base
◦ Gain familiarity with foreign culture
Example:
Kellogg Company Joins with Wilmar International Limited
Anticipating China’s rise to the top of the food and beverage global market, Kellogg Company entered
into a joint venture agreement with Wilmar International Limited for the purpose of selling and
distributing cereal and snack foods to consumers in China. While Kellogg brings to the table an
extensive collection of globally renowned products as well as their expertise in the industry, Wilmar
offers marketing and sales infrastructure in China, including an extensive distribution network and
supply chain. Joining together allows both companies to profit from a synergistic relationship.

Joint Ventures Risk/Benefit
Benefits
◦ Risk sharing
◦ Cost sharing
◦ Acquiring new
technologies/processes/talent/products/etc.
◦ Acquiring new markets
◦ New business models
◦ Acquiring local knowledge and expertise
◦ Economies of scale
Risks
◦ Business failure and loss of investment
◦ Partnership conflict over:
◦ Management control
◦ Strategic directions
◦ Distribution sharing
◦ Cost sharing
◦ Etc.
◦ Intellectual property misappropriation
◦ Loss of brand values
◦ Unanticipated liabilities
◦ Unfamiliar legal and regulatory environments

Divestitures – sometimes less is
more
Under-
performing or
non-strategic
unit
“Best
Owner”
Strategic Investment Plan
Plant and
Equipment
Workforce Acquisitions
Stockholder
Distribution
Stock Buy
Back
Product
Development
Sale
$
$
$
Etc.
TransferJoint Venture

Knowing What You
Know
WHAT ARE YOUR SKILLS

Skill Description
□
Innovation Our company continually applies new concepts to our processes and
includes them in our products to increase realized value.
□
Flexibility Our company is able to turn on a dime and can incorporate new
elements, concepts, and processes without a hiccup.
□
Knowledge Our company codifies and embeds the knowledge of our employees
and of outsiders into our policies, procedures, processes, and
products. We are more knowledgeable within our domain than
other companies.
□
Learning We make a conscious effort to seek out new ideas and concepts and
to evaluate them for inclusion within our company knowledge base.
□
Technology We fully understand and utilize our current technologies and we
continually seek out or invent and incorporate new technologies
into our processes and products.
□
Aggressiveness We vigorously pursue new opportunities and fight hard every day to
acquire new markets, technologies, resources, and assets.
□
Invention Our company constantly comes up with never before seen concepts
and ideas. We encourage uniqueness.
Corporate Skills Inventory
A Corporate Skill is a fundamental attribute of your organization and/or your people which positively or negatively
affects its ability to grow and the rate of that growth. For those attributes that apply to you assign a number from 1-5
indicating how strong that attribute is in your organization with 1 being the weakest and 5 being strongest. Add
additional selections at the end if you wish. (15 minutes)

Strategic Intent
KNOWING WHAT YOU INTEND

Strategic Intent
Strategic Intent)
Growth
Program
(Objectives
utilizing...)
Growth
Levers
...
etc.
Core
Capability
(supports
Strategic
Intent)
Growth
Program
(Objectives
utilizing...)
Growth
Levers
...
What you intend
Your growth mechanics

Strategic Intent Statement
A compelling statement about where an organization is going that succinctly conveys a
sense of what that organization wants to achieve in the long term.
“A Mission Statement should fit on a t-shirt”
◦ Peter Drucker
Think about:
◦ What will your customers buy?
◦ What are you producing?
◦ Who is your company?
◦ What do you do? What do you stand for? And why do you do it?
◦ Do you want to make a profit, or is it enough to just make a living?
◦ What markets are you serving, and what benefits do you offer them?
◦ What markets can you serve?
◦ Do you solve a problem for your customers?
◦ What kind of internal work environment do you want for your employees?
◦ What does your company look like five or ten years from now?

Communicate the Intent
“65% of organizations have an agreed-upon
strategy.
“14% of employees understand the
organization’s strategy.
“Less than 10% of all organizations
successfully execute the strategy.”
Larry Myler, CEO and author Indispensable By Monday

Strategic Intent
What’s Walmart’s Strategic Intent?

Formulating Your Intent Statement
Think of active words that express your intent:
Write them down.
Form them into a statement that fully expresses and communicates to employees and
customers your intent.
For instance:
Walmart: “We’ll be the first to deliver a seamless shopping experience at scale.”
◦ Words – First, seamless, shopping, (customer) experience, at scale (large)
Facebook: “Move fast and break things.”
◦ Words – Move (not static), fast (ahead of competitors), break things (old notions of
communication)

Examples:
“UIS will be recognized as one of the top five small public liberal arts universities in the
United States.”
◦ University of Illinois
“Encircle Caterpillar.”
◦ Komatsu
“Run a profitable airline we can all be proud of.”
◦ Continental Airlines
“Beat the Russians to the moon”
◦ Apollo program

What do you intend?
Your Company Name: 3-YEAR GROWTH
PLAN
Your Company’s Strategic Intent:

Is yours:
• A compelling statement?
• about where your organization is going?
• that succinctly conveys a sense of what your organization
wants to achieve in the long term?

Your Company’s Core
Competencies
WHAT ARE THE FUNDAMENTAL VALUE-ADDING
CAPABILITIES OF YOUR COMPANY?

Strategic Intent
Strategic Intent)
Growth
Program
(Objectives
utilizing...)
Growth
Levers
...
etc.
Core
Capability
(supports
Strategic
Intent)
Growth
Program
(Objectives
utilizing...)
Growth
Levers
...
What you intend

Identifying Core Competencies
Company Strengths
Competitive Advantages
Sustainable Competitive Advantages
Company strengths that influence the customers purchase decisions
Core Capabilities
Competitive advantages that are difficult for others to imitate
Sustainable competitive advantages that are valuable in other
markets

Cleverism, “The Importance of Core Competence”, May, 2014,
https://www.cleverism.com/core-competencies-overview/

Example - Honda
Combustion
Engineering
Mechanical
Engineering
Automobiles Motorcycles
Power
Equipment
American
Honda Motors
Honda Racing
Corporation
Honda Canada
Inc.
Honda of
Canada
Manufacturing
Various Joint
Ventures
Core Competencies
Core Products
Businesses
A B C D E F G H I …
Long, long list of products

Core Products Examples
3M Substrates,
coatings, adhesives
Abrasives, Adhesives & Tape, Automotive, Casting & Splinting, Chemicals & Advanced Materials,
Electronics Materials, Films, Filtration, Food Safety & Microbiology, Health Information Systems,
Medical Device & Optical Components, Painting Equipment & Supplies, Patient Monitoring, Personal
Protective Equipment, Power Storage and Conversion, Security Hardware & Software, Signs & Displays,
Skin & Wound Care, Sterilization Monitoring, Surgical Solutions, Wire & Cable
Black &
Decker
Small electric
motors
Power tools, lawn and garden, home cleaning, small appliances, batteries,
Canon Laser printer
subsystems
CAMERAS AND CAMCORDERS, LENSES, FLASHES AND BINOCULARS,
OFFICE SOLUTIONS, PERSONAL AND HOME OFFICE SOLUTIONS, PROFESSIONAL & LARGE FORMAT
PRINTERS, PRODUCTION PRINTING, NETWORK VIDEO SOLUTIONS, PROJECTORS AND REFERENCE
DISPLAYS, HEALTHCARE TECHNOLOGIES, INDUSTRIAL PRODUCTS
Matsushita
(Panasonic)
VCR subsystems,
compressors
air conditioners, refrigerators, washing machines, compressors, lighting, televisions, personal
computers, mobile phones, audio equipment, cameras, broadcasting equipment, projectors,
automotive electronics, aircraft in-flight entertainment systems, semiconductors, lithium batteries,
electrical components, optical devices, bicycles, electronic materials and photovoltaic modules.
NEC Semiconductors Recognition systems, communication servers, voice response systems, phones, video systems, security
systems
Honda Gasoline powered
engines
Autos, motorcycles, lawnmowers, portable generators

Example Core Competencies
Honda
◦ Combustion engineering
NEC
◦ Semi-conductor technology and innovation
Apple
◦ Innovation, quality, design
Google
◦ Understanding and development of algorithms
What competencies does your company have that:
1. provide the basis of a wide variety of products.
2. provide the values behind end-product benefits.
3. provide unique attributes difficult for competitors to imitate.

What are Walmart’s Core
Competencies?

Identifying Your Core Competencies
Think about the factors you provide that your customers find valuable.
◦ Write them down (not more than three or four probably).
Identify the things that your company does especially well.
◦ Write them down
Identify those factors that take up the most resources in your company.
◦ Write them down
Compare the three lists
◦ Anything that appears on all three or even two of the three could be a core
competency
If none, think about the lists and identify factors that you could develop t
Take 10 minutes to write down your company’s core competencies.

What Are Your Core Competencies?
Core competencies
1. provide the basis of a wide variety of products (it’s adaptable).
2. provide the values behind end-product benefits (it’s valuable).
3. provide unique attributes difficult for competitors to imitate (it’s rare and
costly to imitate).
Examples:
Honda
Combustion engineering
NEC
Semi-conductor technology and innovation
Apple
Innovation, quality, design
Google
Understanding and development of
algorithms
Walmart
Buying power, supply chain management,
logistical superiority
Look back at your list of corporate skills for hints

Do your core competencies
support your strategic intent?
 Yes – We’re on the right track
 No – Let’s rethink this thing
Do they:
Provide the basis of your company’s value proposition?
Provide a competitive advantage difficult to duplicate?
Provide a basis for several product offerings?

Strategic Correspondence

Apple’s Strategic Correspondence
Strategic Intent
◦ “The Company is committed to bringing the
best user experience to its customers through its
innovative hardware, software and services.”
Core Competencies
◦ Innovation, quality, design

Walmart’s Strategic Correspondence
Strategic Intent
◦ We’ll be the first to deliver a seamless
shopping experience at scale
Core Competencies
◦ Buying power, supply chain
management, logistical superiority,
service culture.

Developing Core Competencies
To develop Core Competencies a company must take these actions:
1. Isolate your key abilities and hone them into organization wide strengths
2. Compare yourself with other companies with the same skills to ensure that you are developing
unique capabilities
3. Develop an understanding of what capabilities your customers truly value, and invest
accordingly to develop and sustain valued strengths
4. Create an organizational road map that sets goals for competence building
5. Pursue alliances, acquisitions and licensing arrangements that will further build your
organization’s strengths in core areas
6. Encourage communication and involvement in core capability development across your
organization
7. Preserve core strengths even as management expands and redefines the business
8. Outsource or divest non-core capabilities to free up resources that can be used to deepen
your core capabilities
Bain and Company, “Core Competencies”, June 2016

Some Bases of Competencies
Unique corporate knowledge (IBM)
Unique business processes (Walmart)
Quality (products or services) (Apple)
Exclusive strategic relationships (American Railroads)
Resources monopolies (DeBeers Group)
Agility, flexibility (John Deere)
Management capability (General Electric)
Financial acumen (Berkshire – Hathaway)

Developing Core Competencies
Training
Education
Experience
Asset Investment
Artificial Intelligence
Poaching
“A firm's expertise is acquired by employees and embodied in machines, software, and
institutional procedures.”
◦ Leonard-Barton, Dorothy, “Wellsprings of Knowledge: Building and Sustaining the Sources of Innovation”
(1995). University of Illinois at Urbana-Champaign's Academy for Entrepreneurial Leadership

Growth Programs
CREATE PROJECTS THAT WILL ENHANCE COMPETITIVE
STRENGTHS AND/OR STRENGTHEN WEAKNESSES

Strategic Intent
Strategic Intent)
Growth
Program
(Objectives
utilizing...)
Growth
Levers
...
etc.
Core
Capability
(supports
Strategic
Intent)
Growth
Program
(Objectives
utilizing...)
Growth
Levers
...
What you intend

Strategic Intent
Strategic Intent)
Growth
Program
(Objectives
utilizing...)
Growth
Levers
...
etc.
Core
Capability
(supports
Strategic
Intent)
Growth
Program
(Objectives
utilizing...)
Growth
Levers
...
Market Communications Redesign
Project
Customer Service Improvement
Project
Product Quality Improvement Project
Worker Skills Training Project
●
●
●
Improve Customer
Experience Program

2/11/2018 COPYRIGHT © 2017 VINSON & VINSON, LLC ALL RIGHTS RESERVED 602/11/2018 COPYRIGHT © 2017 VINSON & VINSON, LLC ALL RIGHTS RESERVED 60
Growth Programs
What are Walmart’s Growth Prog.?

Walmart Uses It’s Core Capabilities
Growth Programs Existing Core Capabilities Developing Capabilities
Keep offerings relevant and
convenient
Buying power, supply chain,
logistical superiority
Invest in our people Service culture Service culture
Continual improvement of digital
experience and apps
Digital sales and marketing
Integrate digital to store Digital sales and marketing
Next gen supply chain Supply chain, logistical superiority
Technology and data Technology and data
management
Talent and ways of working Service culture

Growth Drivers &
Levers
BRIEF NOTE: THE OPPORTUNITIES YOU SEE AND THE
LEVERS YOU PULL TO GET RESULTS

Growth Driver, Growth Lever
A growth driver is a factor, usually external which can power your growth. A growth
lever is something you control which enables you to take advantage of a growth driver.
Examples:
Growth Driver External/
Internal
Your Growth Levers Growth Artifacts (results)
Expanding product
market
External Sales, product
development
Innovative product forms, geographic
expansion, new customer acquisition
New cost reducing
technologies
Internal or
external
Innovation, learning,
flexibility
Enhanced worker skills, faster and cheaper
production
Significant regulatory
changes
External Compliance,
relationships, lobbying
Reduced regulatory conflict, advantages
from regulatory loopholes
Market preference
shifts
External Sales, product
development,
invention/innovation
New products, new markets, increased
revenues, market diversity

Growth Levers
What are Walmart’s Growth Levers?

Finding Needed Growth Levers
Growth Levers can be:
Already present
Acquired from outside (Short term)
Developed (Long term)
Can you point to your company growth levers?
Where might you look to find them?
How might you develop them?
What might be your company’s Growth Drivers (environment)?
Can you identify Growth Levers that link to outside Growth Drivers?

What Are Your Growth Levers?
PLAN
Your Company’s
Strategic Intent:
Your Company’s Growth Levers:
1.
2.
3.
4.
5.
6.
7.

Creating Growth
Programs
UNDERSTAND YOUR ENVIRONMENT, USE YOUR
STRENGTHS, CREATE NEW CAPABILITIES, ACHIEVE
STRATEGIC INTENT

Growth Programs, Komatsu
Strategic Intent: “Encircle Caterpillar”
Protect Home
Market against
Caterpillar
Reduce Costs
while Maintaining
Quality
Build Export
Markets and
Internationalize
Komatsu
Respond to
External Threats
Create New
Products and
Markets
1960’s-License
new technology
from Cummins,
Harvester, and
Bucyrus-Erie
1961-Project A to
advance product
quality of some
products above
Caterpillar's
1962-Quality
Circles to provide
training for all
employees
1965-Cost Down
program for key
products.
1966-Total Cost
Down program
1972- Project B,
improve quality and
reduce cost of large
bulldozers
1972- Project C to
improve pay loaders
1972-Project D for
hydraulic
excavators
1960’s-Develop
Eastern bloc
customers
1967- Establish
Komatsu Europe
1970-Establish
Komatsu America
1974-Establish
presales and service
departments to
assist newly
industrializing
countries in
construction
projects
1973-V-10 program
to reduce costs by
10% while
maintaining quality;
reduce parts by
20%; rationalize
manufacturing
systems
1977-¥180
program budget
company-wide for
exchange rate lower
than market
1979-Project E
quality/cost in
response to oil crisis
1970’s-Accelerate
product
development to
expand line
1979-Future and
Frontiers program
to identify new
businesses based on
society’s needs and
company’s know-
how
1981-EPOCHS
program to
reconcile greater
product variety with
improved efficiency

Approaching Program Creation
Program
Objectives
Environmental
Scan Results
Strategic
Intent
Core
Capabilities

The Case of Burroughs’ Minis –
1970’s - 80’s
B-series mini-computers: B80, B800, B90, B900
Very short mean time between hardware failures
Over 300 responses to ad to join class action suit
IBM 34 and 38 taking over the market
Sales declining precipitously
Problems:
◦ Hand-wired backplane errors
◦ Fragile peripherals: disc systems, tape systems, card readers, etc.
◦ Faulty operating system
◦ Faulty application systems
◦ Insufficient field service training
◦ Missed customer delivery deadlines
What programs and/or projects might be appropriate to grow this product?

Identifying Needed Growth Programs
Organic
◦ Shoring up a weak corporate component – products, people, processes, relationships
◦ Partaking in a market trend – market growth, market share protection, product variations
◦ Following a general economic movement – regional or global,
◦ Enhanced monetization – Byproducts, secondary markets, pricing adjustments
◦ New technologies
Acquisitive
◦ Up scaling – geographically, product lines, talent, corporate knowledge
◦ Synergies – plugging the holes, new markets, new technologies
Collaborative
◦ Economies of scale
◦ New markets
◦ New processes
◦ New technologies

Your Growth Programs
PLAN
Your Company’s
Strategic Intent:
1.
2.
3.
4.
5.
6.
7.
8.
Your Company’s Growth Programs
1.
2.
3.

1. Do they grow or create CORE CAPABILITIES?
2. Do they lead to CORE PRODUCTS?
3. Do they lead to EXPANDED MARKETS?
4. Do they draw upon GROWTH LEVERS?
5. Will success lead to fulfillment of STRATEGIC INTENT?

Measuring and
Managing Growth
GROWTH PROGRAMS; SMART OBJECTIVES AND
RELEVANT METRICS

Smart Objectives

CSF’s and KPI’s
Critical Success Factors – Those things within
your company that have to go right to achieve
your goals.
◦ Compelling market communications pieces
◦ Customer-friendly service processes
◦ High quality products
◦ Customer oriented employees
Key Performance Indicators (KPI’s) – The
measurements which indicate progress toward
your goals.
◦ Level of response to market communications
◦ Number of customer complaints
◦ Level of product returns and/or rejects
◦ Number of workers completing skills training
Market Communications Redesign
Project
Customer Service Improvement
Project
Product Quality Improvement Project
Worker Skills Training Project
Improve Customer
Experience Program

Targets identified by artifacts
What are Walmart’s Objectives?

CSF’s: Margin control, product quality, service quality, geographic coverage, partnership network, community
relations, e-commerce growth, management capability, market expansion, supply chain optimization,
price leadership
KPI’s For General Growth: number of stores, number of employees, number of SKU’s, number of vendors,
number of private brands, etc.
For Financial: Revenue, Profit, EBITDA, Debt,, etc.

Your Strategic Objectives
PLAN
Your Company’s
Strategic Intent:
1.
2.
3.
4.
5.
6.
7.
8.
Your Company’s Growth Programs
1.
2.
3.
Strategic Objectives (Target levels of artifacts):
1.
2.
3.
4.

Your Environment
CONSIDERING EXTERNAL FORCES

Environmental Scanning
Macro-environment - social, economic, technological, legal/regulatory, scientific events, realities or
projections – CEO and VP R&D
Industry environment - most significant current/emerging trends in your company’s “industry” or industries –
VP’s operations and manufacturing
Competitive environment - defining key competitors, assessing their performance, being clear-eyed about
their competitive advantages and realistic about yours, and also attempting to anticipate your competitors’
likely moves – marketing and sales VP’s
Internal environment – Intention-based planning – Already done – CEO,CFO, COO
How? Research:
◦ Secondary sources: Newspapers, book, research articles, industrial and trade publications, government publication, and annual report of the
competitors.
◦ Mass media: Radio, TV and Internet.
◦ Internal sources: Internal reports, management information system, data network, and employee.
◦ External agencies: Consumers, marketing intermediaries and suppliers.
◦ Formal studies: Formal research and study by employee, research agencies, and educational institutions.
◦ Spying and surveillance of the competitors.

Organizing the Environment - PEST
Political Economic
Social Technological
• Government involvement in trade
unions and agreements
• Environmental Law
• Education Law
• Anti-trust law
• Discrimination law
• Copyright, patents / Intellectual property
law
• Consumer protection and e-commerce
• Employment law
• Health and safety law
• Data protection law
• Laws regulating environment pollution
• Government stability and likely
changes
• Bureaucracy
• Corruption level
• Tax policy (rates and incentives)
• Freedom of press
• Regulation/de-regulation
• Trade control
• Import restrictions (quality and
quantity)
• Tariffs
• Competition regulation
• Growth rates
• Inflation rate
• Interest rates
• Exchange rates
• Unemployment trends
• Labor costs
• Stage of business cycle
• Credit availability
• Trade flows and patterns
• Level of consumers’ disposable income
• Monetary policies
• Fiscal policies
• Price fluctuations
• Stock market trends
• Weather
• Climate change
• Health consciousness
• Education level
• Attitudes toward imported
goods and services
• Attitudes toward work, leisure,
career and retirement
• Attitudes toward product quality
and customer service
• Attitudes toward saving and
investing
• Emphasis on safety
• Lifestyles
• Buying habits
• Religion and beliefs
• Attitudes toward “green” or ecological products
• Attitudes toward and support for renewable energy
• Population growth rate
• Immigration and emigration rates
• Age distribution and life expectancy rates
• Sex distribution
• Average disposable income level
• Social classes
• Family size and structure
• Minorities
• Basic infrastructure level
• Rate of technological change
• Spending on research & development
• Technology incentives
• Legislation regarding technology
• Technology level in your industry
• Communication infrastructure
• Access to newest technology
• Internet infrastructure and penetration

Competition
Michael Porter, Harvard
Business Press

Competitor Analysis
Key Industry
Success Factors
Weighting
Competitor
#1 rating
Competitor
#1 weighted
Competitor
#2 rating
Competitor
#2 weighted
1 - Extensive
distribution
.4 6 2.4 3 1.2
2 - Customer
focus
.3 4 1.2 5 1.5
3 - Economies
of scale
.2 3 .6 3 .6
4 - Product
innovation
.1 7 .7 4 .4
Totals 1.0 20 4.9 15 3.7

1. Define the industry – scope and
nature of the industry.
2. Determine who the competitors are.
3. Determine who the customers are and
what benefits they expect.
4. Determine the key strengths – for
example price, service, convenience,
inventory, etc.
5. Rank the key success factors by giving
each one a weighting – The sum of all
the weightings must add up to one.
6. Rate each competitor on each of the
key success factors.
7. Multiply each cell in the matrix by the
factor weighting.
Key Industry
Success
Factors
Weighting
Competitor
#1 rating
Competitor
#1 weighted
Competitor
#2 rating
Competitor
#2 weighted
1 - Extensive
distribution
.4 6 2.4 3 1.2
2 - Customer
focus
.3 4 1.2 5 1.5
3 -
Economies
of scale
.2 3 .6 3 .6
4 - Product
innovation
.1 7 .7 4 .4
Totals 1.0 20 4.9 15 3.7
Consider all five of the competitive entities:
new entrants, suppliers, buyers, substitutes,
and inter-industry competitors

Some Considerations
OTHER THINGS TO EXAMINE

Blue Ocean vs. Red Ocean (Head to
Head) “Hit ‘em where they ain’t” – Willie Keeler
W. Chan Kim, Renée Mauborgne, Blue Ocean Strategy, Harvard Business School Publishing, 2015

Using Your Strengths
Core capabilities + Growth levers + Resources = Growth programs addressing
opportunities from environmental scan
Set: Growth targets + Metrics + Monitoring
Core products – What other products can we produce using them? What other markets
can we enter using them? What additional market share can we get using them?
Core capabilities – Can we use them to create other core products?

Some General Assessment Methods
SWOT
PEST
PV, DPV, and NDPV
Break even and Payback
Net present value

Strategic Alignment
Strategic Intent
Strategic Intent)
Growth
Program
(Objectives
utilizing...)
Growth
Levers
...
Growth Program (Objectives
and structure utilizing...)
Growth Levers
(producing...)
New markets, new products,
increased market share,
efficiency, acquisitions, etc.
Core
Capability
(supports
Strategic
Intent)
Growth
Program
(Objectives
utilizing...)
Growth
Levers
...
Market needs and
wants
Informed by
Satisfying
Supported
by
Using
Producing

Programs Management and
Evaluation
Monitor Progress
Against Objectives
Strategic Objectives
Program Objectives
Projects
Implementation
Monitor Program
Metrics CSF’s and
KPI’s
Strategic
Intent, Core
Capabilities
Growth
Artifacts
Strategic FrameworkStrategic Products
Adjust

You Need to Change

Resource Allocation
IDENTIFYING AND DISTRIBUTING RESOURCES FOR
GROWTH

Your
Business
Strategic
Partnerships
Organizational
Development
Market
Development
Financial
Management
Management
Development
Vision and
Purpose
Monetization
Operating
Model
Invention and
Innovation
Assets
Development

What Resources Do You Have?
Property, Plant and Equipment
◦ Hard Assets
Workforce
◦ People’s skills, capabilities, and willingness
Corporate Knowledge
◦ Embedded and corporate
Inventories
◦ Materials or skills
Strategic Partners
◦ Third parties that help you
Management Talent
◦ Integration and enablement
Technologies
◦ Process and product
Money

Allocation Methods
Static vs. Dynamic Requirements
Manual
◦ Guess and hope
◦ Experience
Technology supported
◦ Project management software
◦ Automated simulations
Monte Carlo simulation
Reactive
◦ The squeaky wheel method
Scenario Planning
◦ What’s likely to happen

PMI Project Management
Framework

Project Management Institute Body
of Knowledge
Complete set of standards for project management:
◦ Project Integration Management
◦ Project Scope Management
◦ Project Time Management
◦ Project Cost Management
◦ Project Quality Management
◦ Project Human Resource Management
◦ Project Communications Management
◦ Project Risk Management
◦ Project Procurement Management
◦ Project Stakeholder Management.
https://www.pmi.org/

Growing Pains
CONFRONTING THE PROBLEMS CREATED BY GROWTH

Growth Traps
Complexity
Scarcity
Capacity
Exhaustion
Scalability
Sustainability
Loss of agility
Monetization
Cash

Complexity
The
Firm
Workers
Assets
Customers
Suppliers
Suppli
ers
Work
ers
Work
ers
Work
ers
Suppli
ers
Suppli
ers
Assets
Assets
Assets
Custo
mers
Custo
mers
Custo
mers

Scarcity Factors
Labor
Raw materials
Knowledge
Capital
Land

Capacity
Will Market Sales Sustain Over Capacity? Will Under Capacity Overwhelm Assets and Labor?
Douglas Aircraft Cash Shortage?

Exhaustion
Management Exhaustion
Worker Exhaustion
Resource Exhaustion
Asset Exhaustion
Market Exhaustion
Symptoms:
◦ Losing employees
◦ Losing customers
◦ Losing quality
◦ Discontent

Scalability
Scalable business model
◦ high margins (over 50%)
◦ low support requirements
◦ minimum staffs
◦ strong core team
◦ automated processes
◦ Consider licensing or franchising
Linear scaling – Growing on the margin
Step-wise scaling – Growing by leaps and bounds
Replication scaling – Growing by replicating units
(i.e. franchising)

Sustainability
Is your rate of resource consumption greater than the supply can bear long term?
Can you use renewable resources?
Will your markets last?
Will needed skills be there in the future?
Will current technology become obsolete?
Will labor be available?
Will capital be available?

Risk and Opportunity
IDENTIFYING AND PREPARING

Identifying Risk
Predicting an uncertain future
Some types of business risk:
◦ Strategic Risk – Shifts in consumer preferences, emerging technologies, competitive entry, or
other drastic market forces, …
◦ Compliance Risk – Legislative or bureaucratic rule and regulations
◦ Financial Risk – Credit default, cash mismanagement, loss of revenue, interest rate
fluctuations, exchange rates, embezzlement, …
◦ Operational Risks – Internal processes, people or systems fail unexpectedly; supplier
deficiency, logistics failures, …
◦ Reputational Risk – Loss of a company’s reputation or community standing
◦ Other Risks – Environmental, brain drain, patent usurpation, national political or economic
instability, …
Experience, brain-storming, historical study, experts, trend analysis, …

Evaluating Risk
Evaluation Matrix Event Tree
Other methods: Brainstorming, Sensitivity Analysis, Probability Analysis, Delphi Method, Monte Carlo,
Decision Tree Analysis, Utility Theory, Decision Theory.

Risk Mitigation
Risk acceptance – Oh well
Risk avoidance – What can we do differently?
Risk limitation – What will limit the impact?
Risk transference – Can we foist this off on …
Risk monitoring – Let’s watch and see what happens.
Risk exploitation – How can we take advantage?
More on risk management:
◦ ISO 31000:2009 – Principles and Guidelines on Implementation
◦ ISO/IEC 31010:2009 – Risk Management – Risk Assessment
Techniques
◦ ISO Guide 73:2009 – Risk Management – Vocabulary

What’s Next?
PROBLEM SOLVED – NOT!

Your
Business
Market
Dynamics
Legal and
Regulatory
Competition
Suppliers
General
Economy
Social and
Community
Environment
Technology
Development
General
Knowledge
Dynamic External Forces

Your
Business
Strategic
Partnerships
Organizational
Development
Market
Development
Financial
Management
Management
Development
Vision and
Purpose
Monetization
Operating
Model
Invention and
Innovation
Assets
Development
Dynamic Internals

Strategic Management
Plan
Implement
Perform
Measure
Review
Adjust
External
Changes
Internal
Changes

www.vinsonandvinson.com

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