The Growth series will posted on Tuesdays, Wednesdays and Thursdays through the month of October 2011.
When markets change so do the opportunities for growth. In some cases, especially in the toughest of markets, it seems to be “eat or be eaten.” The activity in mergers and acquisitions (M & A) has certainly increased and is likely to continue. Companies do not need the same physical footprint to transact the same or greater quantities of business. Costs can be leveraged through technology to serve a broader market and bring efficiencies at a reasonable cost to larger companies. Since not all companies can bear the investment and upkeep required, M & A opportunities are born. Market changes, economic drivers and demand for tools and services changes the approach even in mergers, acquisitions and absorptions.
The A.T.F. assault for market dominance is made by a company deploying action in the market through Assertive Tactics executed with Finesse.
It takes an assertive company willing to do the preparatory analysis and work through initial approaches with defined advantages and the knowledge that it is a process with many events. The tactics must fit the opportunity and become the vehicles that drive momentum toward the objective. The finesse is displayed in the art of the deal where everyone wins and thoughts of loss are diminished to the shadows of an exciting future.
A lot of companies say they will talk to anyone, and they will, but it is not a plan and becomes very difficult to execute, integrate and manage. ATF companies understand that the plan is a long term strategic initiative in which the environment and players will change. Flexibility and fit will be key operating words in a dynamic strategy.
Each competing company in the market is evaluated for fit. “Fit” is the collection of complimentary elements the company brings to the ATF company and what the target company brings that helps the ATF company grow. Requirements are often items that are viewed as critical deal elements by the target company and may be deal breakers. Time is an ally with requirements as many change or can be mitigated over time. Flexibility to work with situations and make changes to the plan will be necessary. Timing is always a gateway to opportunity that does not remain open.
Complimentary elements may include people who will work well together with similar values and objectives, similar business practices, tools and locations that will fit nicely in the operations of the company. All of these elements must blend and expand the company without overlap and waste.
- The growth may be defined and quantified in terms of the marketplace, people, leadership, status, niche penetration and/or business units. The growth must be able to be integrated in the company’s objectives, operations and plans.
- Requirements might include key positions, leases, people, debt and agreements in place.
- Flexibility will be required in resolving areas of conflict, bloat and egos. It is also needed when an outside force changes the plan. Examples would be when a target company merges with a competitor or when the target company is no longer desirable.
- Timing factors may include exit points for key people, monetary factors, leases and life circumstances.
ATF companies need all of the insight, information and skills portrayed in this series of blogs on Growth. As described in C.I.A. Recruiting Tactics, the ATF company will need to take a Completely Informed Approach and build a dossier on each company in the market place with regular updates. One tool often used to start to build the information is a simple pro and con assessment of each company in the footprint or expansion area.
Companies that are considered to be top targets are then further assessed for fit. Once fit is determined, there is a virtual overlay to see what the companies would look like if combined. Obstacles and requirements are considered along with factors of timing to determine prioritization. It is almost as if you were looking at a battle plan in a virtual game simulation. You should also begin to see potential effects that will occur as a result that will probably create additional opportunities or challenges.
Mergers and acquisitions should always be a part of a company’s growth plan. A company that adopts an ATF methodology always has the advantage. ATF companies are more successful in negotiations and often sought after as an option and because of the advantage their acquisitions are often less costly.
It is interesting that the strategic plan of the Alcohol, Tobacco, Firearms and Explosives Agency, The A.T.F., includes the following on their site,“ATF is committed to a strategic management framework to promote continuous assessment and improvement. The framework focuses on strategic planning, budgeting, performance measurement, and Bureau operations.”
Perhaps there is some similarity in their strategic plan to an ATF company pursuing strategic growth.