Catherine Cates presented on how growing companies get stuck in "No Man's Land" between being a small startup and large established business. In this stage, companies often see stalled growth and profits. She outlined four key areas ("M's") to focus on: 1) refining the marketing strategy and value proposition; 2) creating an economic model that can scale profitably; 3) raising capital to finance growth; and 4) professionalizing management while maintaining culture. Tools like the Inc. Navigator can help assess alignment and priorities across the leadership team. Breaking through No Man's Land requires balancing entrepreneurial vision with business maturity.

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. 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.
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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. 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. 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 %
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6. “Economy Heroes” - Get Past “No Man’s Land”
Revenue
Start-Ups
Break Outs
“Lifestyle
Businesses”
“Small
Giants”
0-20 employees
20-200 employees
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“Economy
Heroes”
200 + employees

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.
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You are
struggling to
take your
company to
the next level.

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. 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.
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10. Tools To Assess Where Your Company Is
Tools: Inc. Navigator™
A diagnostic tool that assesses:
Performance
Alignment
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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
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© 2012 4M Navigator, LLC All rights reserved. Confidential.

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.
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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.
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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?
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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
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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
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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
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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.
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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.
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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.
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Professionalize
management while
preserving the culture
and decision-making
that has made the
company successful.

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
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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/
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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!
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