How to Break Through No Man’s Land
The Stage Where Growing Companies Get Stuck
Presented By:
Catherine Cates
Partner, Newp...
The Entrepreneur’s Dilemma

What is the most painful issue
that is keeping you up at
night?
Take 30 seconds right now to w...
Where Jobs Come From
Middle Market Firms Account for the Most Jobs
2012 Job Distribution in U.S.
Middle Market
10-500 Empl...
No Man’s Land - Where Companies Fail
When your business is too big to be small and too small to be big
1-20
employees
90 %...
The Case of the Freight Forwarding Industry
Pre-tax Profit % by Five Year Average Firm Size

No Man’s Land

4.0%
3.5%
3.0%...
“Economy Heroes” - Get Past “No Man’s Land”

Revenue

Start-Ups

Break Outs

“Lifestyle
Businesses”
“Small
Giants”

0-20 e...
Are You In No Man’s Land?
• Sales and growth have stalled and/or profitability is not
growing in line with revenue.
• You ...
The Map Through “No Man’s Land”

• Do you know your value

MANAGEMENT

MONEY

MARKET

•

MODEL

•
•

•

MOMENTUM

© 2007 T...
Navigating “No Man’s Land”
•

Market
• Realign with the market; refine the value proposition for new segments of

customer...
Tools To Assess Where Your Company Is
Tools: Inc. Navigator™

A diagnostic tool that assesses:

Performance

Alignment

10
Compass: No Man’s Land Diagnostic
“This is a great tool which all
leaders need in order to step
outside of the day to day ...
First “M”: Marketing
Signs of Marketing Misalignment
1. Customer Satisfaction: Customers believe it takes less time and ef...
Example: Marketing Misalignment (Cont.)
6. Profitable Products: We know which products/services are the most

profitable a...
How Teams Score

Performance
- On which questions would your team score the lowest?
Alignment
- How confident are you that...
Lack of Alignment Impacts Performance
Blind Spot #1: Value Proposition
CEO Says:

TEAM Says:

85% CEOs say employees
can c...
Lack of Consensus on Priorities
Blind Spot #2: Team Alignment
CEO Says:

TEAM Says:

92% of CEOs say their teams 2% of lea...
The Inc. Navigator Compass
Blind Spot #3: Accountability
CEO Says:

TEAM Says:

86% of CEOs believe that
everyone is held
...
Second M: Economic Model
Ramp Up Infrastructure

•
•
•
•

Originally, the entrepreneur’s grasp of the business model was
i...
Third M: Money (Raise Capital)
•

•
•
•

“Bootstrapping” yourself is probably not a realistic option.
Must be able to expl...
Fourth M: Professional Management
• Owner/entrepreneur stretched thin
•

•
•

•

and entering uncharted waters.
Employees ...
Balance Entrepreneurship, Maturity

Vision,
Energy

• Retain founder’s
entrepreneurial energy and
focus
• Keep key employe...
For Further Information

Contact Catherine:
Catherine Cates
Partner
Newport Board Group LLC
Catherine.Cates@NewportBoardGr...
Next Webinar

November 13th, 1 pm ET
Exit Planning: It’s Never too Soon to Think About It
Follow @NewportBoard on Twitter ...
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How to Break Through No Man's Land - The Stage Where Growing Companies Get Stuck

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Many companies enter a stage of growth where their business is too big to be small, and too small to be big. They’re running as fast as they can and yet the old way of running the business doesn’t seem to work anymore.

Catherine Cates discusses a proven set of actionable recommendations to pinpoint where you are in No Man's Land and how to break through it.

This slideshow details:

- How to recognize if you are in No Man's Land
- The 4 M's: categories where companies get stuck
- A tool to help your company move past No Man's Land

Published in: Business, Economy & Finance
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How to Break Through No Man's Land - The Stage Where Growing Companies Get Stuck

  1. 1. How to Break Through No Man’s Land The Stage Where Growing Companies Get Stuck Presented By: Catherine Cates Partner, Newport Board Group
  2. 2. The Entrepreneur’s Dilemma What is the most painful issue that is keeping you up at night? Take 30 seconds right now to write down that issue. We will come back to that later. 2
  3. 3. Where Jobs Come From Middle Market Firms Account for the Most Jobs 2012 Job Distribution in U.S. Middle Market 10-500 Employees 54.8% “Main Street” Businesses 2--9 Employees 24.8% Self - Employed 4.3% Large Businesses >500 Employees Source: YourEconomy.org 16.2% 0.0 0.2 3 0.4 0.6
  4. 4. No Man’s Land - Where Companies Fail When your business is too big to be small and too small to be big 1-20 employees 90 % of companies 20-100 employees 10 % of Companies 4 More than 100 employees Only 1 % of ALL Companies
  5. 5. The Case of the Freight Forwarding Industry Pre-tax Profit % by Five Year Average Firm Size No Man’s Land 4.0% 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% $< 50 0k $5 00 k1m $1 il m il$5 m ill $5 -1 0m $1 0m il il20 $2 m il 0m il50 $5 m 0m il il10 0m $1 00 il m il p lu s Pre-tax Profit % 5
  6. 6. “Economy Heroes” - Get Past “No Man’s Land” Revenue Start-Ups Break Outs “Lifestyle Businesses” “Small Giants” 0-20 employees 20-200 employees 6 “Economy Heroes” 200 + employees
  7. 7. Are You In No Man’s Land? • Sales and growth have stalled and/or profitability is not growing in line with revenue. • You feel the business is stuck and you are too involved in everything. • You have outgrown your management team. • You’re not growing fast enough; you work harder, but make less money. • The old way of running your business doesn’t seem to work anymore. • You don’t have a clear succession plan or exit strategy. 7 You are struggling to take your company to the next level.
  8. 8. The Map Through “No Man’s Land” • Do you know your value MANAGEMENT MONEY MARKET • MODEL • • • MOMENTUM © 2007 Tatum, LLC All rights reserved. 8 proposition in the Market? How is it changing? Is your Model scalable? Do you have the right Management team? Raise your Money Maintain Momentum!
  9. 9. Navigating “No Man’s Land” • Market • Realign with the market; refine the value proposition for new segments of customers. • Get the business good at doing with customers what the entrepreneur originally did by himself. • Management • Professionalize management. • Preserve the culture and decision-making that has made the company successful. • Model • Create new economic model for the company to be profitable at scale. • Break operations down into repeatable functions and processes. • Money • Raise capital to finance growth, recognizing operating changes that the funding will require. • Run the company with an eye on your exit strategy. 9
  10. 10. Tools To Assess Where Your Company Is Tools: Inc. Navigator™ A diagnostic tool that assesses: Performance Alignment 10
  11. 11. Compass: No Man’s Land Diagnostic “This is a great tool which all leaders need in order to step outside of the day to day and strategically see where they need to focus NOW.” Jennifer Fallon, CEO Aspen Brands and Inc. 5000 Honoree It takes less than 30 minutes 11 © 2012 4M Navigator, LLC All rights reserved. Confidential.
  12. 12. First “M”: Marketing Signs of Marketing Misalignment 1. Customer Satisfaction: Customers believe it takes less time and effort to 2. 3. 4. 5. do business with my company. Gross Margin: Compared to last year, our gross margin has improved. Product Commoditization: The company is not under pressure to reduce prices. Value Proposition: All employees can clearly articulate why customers buy from our company. Profitable Clients: Sales efforts are focused on the company's fastestgrowing and most profitable customer segments. 12
  13. 13. Example: Marketing Misalignment (Cont.) 6. Profitable Products: We know which products/services are the most profitable and we focus most of resources on the most profitable ones. 7. CEO Best Use: CEO delegates all non critical customer decisions. 8. Customer Promises: The company is able to keep promises that it has made to customers. 9. Cost of Customer Acquisition: We know the cost to acquire a new customer. 10. Innovation: We consistently recognize and exploit changes in the market before our competitors do. 13
  14. 14. How Teams Score Performance - On which questions would your team score the lowest? Alignment - How confident are you that your management team would score the same way you did? 14
  15. 15. Lack of Alignment Impacts Performance Blind Spot #1: Value Proposition CEO Says: TEAM Says: 85% CEOs say employees can clearly state their company’s value proposition 7% of leadership teams can articulate a common value proposition 15
  16. 16. Lack of Consensus on Priorities Blind Spot #2: Team Alignment CEO Says: TEAM Says: 92% of CEOs say their teams 2% of leadership teams can agree with and can clearly list the same strategic communicate their strategy priorities 16
  17. 17. The Inc. Navigator Compass Blind Spot #3: Accountability CEO Says: TEAM Says: 86% of CEOs believe that everyone is held accountable for performance 20% of leadership teams agree 17
  18. 18. Second M: Economic Model Ramp Up Infrastructure • • • • Originally, the entrepreneur’s grasp of the business model was intuitive - must now formalize and share it with the entire company. Determine how value delivery system can be as profitable at larger scale as it was before. Target demand volume to facilitate step-fixed infrastructure costs. Break operations down into discrete, repeatable functions and processes. 18
  19. 19. Third M: Money (Raise Capital) • • • • “Bootstrapping” yourself is probably not a realistic option. Must be able to explain the potential of the business - to persuade a borrower to lend to you or to offer attractive return to investor. Professional management can help the company become objective about its business model - to make the case for investment. Questions to ask yourself: • What risks in the business can be eliminated if you had more capital? • What combination of debt and equity is right for you? • Are you ready for the scrutiny that outside funding will require - and the operating changes needed to make it work? • Do you have an ultimate exit strategy? © 2007 Tatum, LLC All rights reserved. 19
  20. 20. Fourth M: Professional Management • Owner/entrepreneur stretched thin • • • • and entering uncharted waters. Employees are often over their heads. Key managers are “frozen” - looking to CEO for direction. Entrepreneur doesn’t want to create bureaucracy and lose touch/control. Can’t afford to hire senior management. 20 Professionalize management while preserving the culture and decision-making that has made the company successful.
  21. 21. Balance Entrepreneurship, Maturity Vision, Energy • Retain founder’s entrepreneurial energy and focus • Keep key employees • Avoid “creeping bureaucracy” Maturity • Professionalize management • Create processes and systems to routinize the business • Finance growth • Scale the business toward possible exit 21
  22. 22. For Further Information Contact Catherine: Catherine Cates Partner Newport Board Group LLC Catherine.Cates@NewportBoardGroup.com www.newportboardgroup.com/partners/C atherine-Cates www.linkedin.com/in/ccates/ 22
  23. 23. Next Webinar November 13th, 1 pm ET Exit Planning: It’s Never too Soon to Think About It Follow @NewportBoard on Twitter for more details! 23

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