Turbulent Times for Fast-Growth Businesses

In the dynamic growth company landscape, CEOs and senior executives of PE-backed and AIM-listed businesses often find themselves at the helm of companies poised for growth and transformation.???

As these businesses develop, the question of an exit grows more significant. Whether it's through a management buyout, an IPO, or a trade sale, preparing to exit is a complex and critical process that requires measured planning and strategic execution. In our recent research with growth company leaders and Board members, a trade sale was the most likely exit route, with 36 percent opting for this.??

However, exits are not the only challenge. Only 25 percent in the survey said their management team could navigate strategic uncertainty. When asked if their Boards are aligned on the strategy for growth, less than half (39 percent) were very confident there was synergy amongst the top team. One participant reflected that there were expectations of high growth but with constraints on capital, adding further complexity to the environment executives are leading through.??

Another notable observation was that over half (61%) expect to conduct M&A over the next twelve months. As discussed at our Growth Company Retreat, to ensure a smooth transition through M&A, leaders must conduct a thorough assessment of the cultures of the merging organisations. This includes their values, communication styles, leadership approaches, and employee engagement levels. Identify areas of alignment and potential areas of conflict between the cultures of the merging entities.???

Cultural assimilation is essential for M&A success, potentially more important than financial or strategic metrics, but is often overlooked during the integration phase of M&A. Although, leaders should bear in mind that not all inherited employees will fit into the new setup, communication and having a clear plan are essential. Click here to find out what Babble CEO, Matthew Parker has to say on cultural integration.??

External reference points are particularly important when it comes to M&A. In the research, 47 percent of leadership teams recognise the importance of external reference points in enhancing their decision-making processes.???

Our upcoming Growth Company Forum allows leaders to gain a deeper understanding of M&A trends, learn from the experiences of others and unlock new avenues for growth. Register now and secure your place by contacting us here.?