The 9 drivers are grouped into 3 themes:
As companies grow into midsized, they need far more people, all of whom can’t be managed by any one person. They must get along and be led by a team of leaders. Good people are hard to get, so we must sharpen our ability to attract and develop them. We must look further into the future since getting the right people and settling into the team will take more time and the learning curve will become longer. These changes (as firms enter midsized) mean changing criteria for admission of leaders into the company, more process, and team leadership—all new things for midsized companies.
Driver 1- Recruiting: Consistently recruiting enough high-quality talent at all levels to fuel growth. Many midsized companies struggle to find people to employ, so the need is obvious. But most companies settle for “good” people. Good people are better than no people, but pale in comparison to great people. Midsized companies who are rich in amazing, talented, “top of their class” people grow faster and stronger than their competition. Our work in recruiting helps you create a systematic process to attract the best and brightest into your company.
Driver 2- Developing Talent: Actively developing the high-potential talent already within the organization, reducing the learning curve and internally supplying some of the leaders for the next generation. Look, a percentage of your people are capable and eager to move up as your company grows. They love the company and have bought into your mission. Systematically helping them earn promotions and increasing their responsibility fuels growth, is a lower risk than hiring from the outside and is relatively inexpensive. We show you how.
Driver 3- Leading with Teams: Excellent teamwork, where teams throughout the organization enjoy working together in a cohesive fashion and are highly productive and effective. Many small companies succeed and grow from the work of individual heroes (sometimes the owner) who make a massive difference. That’s great. But growing midsized companies can’t scale on the backs of a few heroes. They need teamwork to be the hero. The Driver 3 chapter in our book focuses on the journey from being a hero to being a team leader, a classic journey that must occur in midsized companies. We help teams at all levels learn how to systematically improve their performance.
Startups can’t plan well. Everything is new, nothing is tested, and nothing is known. They don’t need much in the way of planning since they are just trying to survive, and innovation and flexibility are powerful survival tools. Soon, with some success, they find a bit of predictability in the market’s response to them. With that predictability, they soon realize that they can optimize their activities to better profit from their own predictions. This is the birth of the need to plan and optimize their execution – where managers and leaders see the need to live in the future, at least for part of their day. But to do it well, they need to have enough financial acumen and financial depth to grow, collect data systematically and use it to make smart decisions, then to create layered plans (operational and strategic – the “how” and the “what”) that will help them win.
Driver 4- Planning and Managing to Plan: Firms create higher-level strategic plans that look forward 3-5 years, as well as separate shorter-term operational plans that clarify activities for all leaders in the year ahead. Midsized firms can’t just react. They must become clear about where they are headed on multiple time horizons then identify the exact steps they will take to get there and who is leading and supporting those efforts within the company. This ranges from ongoing validation of the business model all the way down to planning day-to-day operations. We help you choose the right amount of planning and governance at the right levels. The One Page Business Plan, or EOS or OKRs are a small part of this driver.
Driver 5- Data-Driven Systems: A data-driven company collects data systematically and analyzes it against targets on an ongoing basis to become more efficient and effective. Midsized companies are way too complex to make decisions without data. Sure, financial data is a big piece of the puzzle, but not nearly all of it. Data on production, sales, the customer experience and so much more are required for good decision making. Creating and scaling the data collection system is a big task. So is knowing how to analyze it, benchmark it and to make decisions from it on a timely basis.
Driver 6- Finance Capability: Midsized firms must clearly understand the financial wherewithal they have and the financial demands required to achieve their targets. Their accounting and finance functions must not only record history with accuracy but anticipate the informational and financial needs for the future in detail. The money matters! “The accounting department” in a small firm blossoms into much more in a midsized firm (Treasury, Accounting, Finance). Budgeting arrives along with a supporting role for finance in decision making across the organization.
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Most small companies and startups are born inside a market niche. They often come to life in response to an unmet market need. They don’t need to research changes in the marketplace since they are reacting to unmet need. Their main hope is to survive long enough to find a real sustainable need that gets them to positive cash flow. Those that succeed find themselves a midsized firm, with a lot more to lose if they stop growing (or fail). The need that got them to midsized may or may not continue. They may now dominate that niche, not leaving much room for growth without some form of diversification.
New demands on management are to systematically assess the market, see how new directions fit into their business model, and justify & de-risk more expensive moves to fuel growth. To capitalize on what they discover, they need disciplined sales and marketing activities at a larger scale. And beyond all this is the possibility that their broader marketplace (for their scale as they grow) may require more strategic initiatives to continue to drive growth.
Driver 7- Market Intelligence & Strategic Response: Regularly collecting and recording information about the markets in which the company plays (competitors, customers, vendors) is an oft-missing ingredient for midsized companies. Winning against the competition means understanding them. That new data must be plugged into the business model, which is the rationale of how an organization creates, delivers and captures value relative to its competition and other market forces. In contrast, owners of small companies can feel their competition and the niche they play in. But at midsized, with dozens or hundreds of people on the front lines, the understanding by top management of the current activities of competitors and the attitudes and perceptions of customers begins to fade, with painful consequences. We show you how to track the shifting conditions in your marketplace by systematically gathering and analyzing marketplace information, then how to systematically judge how they will affect your company.
Driver 8- Strategic Growth: Strategic growth initiatives, such as looking for and entertaining acquisitions, joint ventures, new regions and adjacent opportunities, is another important driver of growth for emerging midsized companies. Organic growth—winning more customers one at a time in your niche—is always essential, but at midsized, many firms can accelerate growth in bigger leaps by buying companies, partnering up with other firms or branching out in big ways. Taking big leaps is always exciting because there is risk. We show you how to systematically look for and execute those opportunities that will become a leap forward, not a leap into the abyss.
Driver 9- Systematic Sales and Marketing: Sales and marketing functions that deliver predictable (and positive) results and can be scaled up to get more sales when desired. Most newly minted emerging businesses have a hero or two in their sales team. It’s how they grew! But even a great recruiting function can’t deliver a flow of heroes that will take the company from say, $50M revenues to $100M. You need a system with sales managers and defined territories mined by well-trained salespeople who use tools like a CRM to pursue the right targets and work in concert with lead generation from their marketing team and others. Going from hero worship to a systematic, scalable sales and marketing process is an area where we help. We leverage existing resources you may or may not have, such as sales trainers and system integrators.
Robert Sher is founding principal of CEO to CEO, a consulting firm of former chief executives that improves the leadership infrastructure of midsized companies seeking to accelerate their performance. He was chief executive of Bentley Publishing Group from 1984 to 2006 and steered the firm to become a leading player in its industry (decorative art publishing).