Unleashing Growth Opportunities

“Whether the business is a beachside taco stand or a multinational hotel chain, every successful business has one important holistic core element: a growth mindset.” Maria Wu, Forbes, August 2021

I could not agree more wholeheartedly with fellow entrepreneur Maria Wu, Founder and Chief of Maud Medical Clinic in Calgary, Alberta. Without a growth mindset, no business can reach its potential. With a growth mindset, and the tools to implement it, I believe a business will realize its highest potential.?And yet there is reluctance. There are those who might say of a successful business, “if it’s not broke, why fix it?” There are others plagued by uncertainty, anxiety about the future, and just simple ennui. But eschewing a growth mindset, for whatever reason, will leave a business in a vulnerable, less competitive position. In the 21st Century, a successful business must operate with a growth mindset. And yet, the growth mindset is only the visible part of the iceberg. There is indeed a whole discipline that needs to be acquired to generate significant growth and to decrease risks.

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Most Fortune 500 companies are limited in their ability to quickly build an idea, iterate with the market, launch a start-up, and scale revenues. They may have limited innovation and product development capabilities or too many of them. They may be creating barriers to innovation due to a slow pace of operations resulting from lack of a sense of urgency. Or they may have a high level of risk aversion because the legal department or the CFO is more prone to protect the existing business than go through the risk of creating a new one.?In some cases, they lack corporate entrepreneurs to take the concept to market and scale. Or these corporate entrepreneurs might exist, but do not get the support needed as they may be seen as disruptive to the way business as always been done. They may be reluctant to invest in non-core capabilities like hiring, or fear investing budget before seeing results.

In this paper, we explore the importance of intentional growth, along with the key benefits, as well as the common impediments to growth. We look at what it means to unleash growth opportunities and how Aramis Advisors helps companies and organizations realize their potential with a structured approach to growth.?

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Why intentional growth is important

?Top-line growth is typically the largest source of value creation over other efforts such as line extensions, cost reduction programs or free cash flow improvement initiatives. In an extensive research, Olsen, Plaschke and Stelter (BCG) demonstrated that top-line growth historically accounted for 58% of value creation versus 20% for cost reduction, 15% for line expansion, and only 7% for free cash flow improvement.?What’s more, adding new revenue sources and new capabilities is an engaging way to design your organization’s future and is more inspiring than cost-cutting programs. Adding rather than subtracting opens the possibilities to different future states.?

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The key benefits of growth include Economic Value, Organizational Value, and Operational Value and Agility

Economic Value can be easily measured as it covers the following examples:

• Generate new revenues
• Accelerate existing growth plans
• Enable focus on economic priorities
• Provide rationale to make an economic decision (Build / Buy / Partner / Exit)
• Improve EBITDA

Organizational Value is more intangible but contributes to the creation of economic value through the following examples:

• Leverage untapped or underutilized assets (people, process, content, IP, network, access, technology, etc.)
• Align executive team on strategic priorities
• Free-up staff’s time to focus on organizational strategic priorities
• Shift corporate culture to prioritizing growth initiatives

Operational Value and Agility is also more intangible but nonetheless quite significant?as it covers the following examples:

• Execute plans faster, cheaper, or better
• Build new internal capabilities
• Acquire / Integrate new company or new technology
• Procure technical platform to enable testing, reporting and running different scenarios

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What prevents organizations from being intentional about growth?

• Hunters versus farmers: As organizations grow and then stabilize, the management team evolves from a hunter frame of mind to a farmer frame of mind. Organizations with slow growth (less than 5% per year) might be afraid of taking new risks. Their primary goal is to protect the core business that brings cash flow and profits. Often time, it translates into short-term planning (a one-year horizon or even 1-2 quarter horizon) leading to bottom-up planning where existing budgets and initiatives are being simply tweaked and reconducted. Focusing on growth means a longer time horizon (typically at least 3 years) and a more top-down approach to planning, a good understanding of competitive moves, clients’ needs, and general trends allowing the organization to imagine new strategic prongs and to project an vision of itself in the future
• Executive Misalignment: Growth is impeded where there is misalignment in the executive team, and every executive is focused on growing his or her own fiefdom. If every executive has an individual mission, the corporate mission suffers. There Is no-one to lead the company forward. Misalignment in the executive team creates competing priorities that inhibit the opportunity to focus on growth. This typically cascades through the organization and shows up as competing priorities.?It ends up slowing down overall progress and sometimes creates gridlock and prevents progress altogether.
• Organizational Maturity: As they grow, organizations go through different stages of organizational maturity, that span from “informal” to “documented” to “structured” to “managed” and eventually “optimized”. Every stage presents its own challenges when it comes to upgrading processes, acquiring tools & technology and hiring and staffing the right people in the right roles. Over time, growth can be both a catalyst and/or an inhibitor in the organizational development of the organization. It is important to be able to manage that relationship between growth and organizational development as they are deeply intertwined. Organizational maturity is a gradual process focused on self-improvement.

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What does it mean to unleash growth opportunities?

• Design a growth-oriented strategic plan. Your strategic plan is your road map, the document that is supposed to keep your entire team in alignment. Many plans are simply reconducted ongoing initiatives without dedicating enough budget, efforts, or room for new growth initiatives. Organizations need to design a future where innovation becomes a major strategic prong (with calculated risk) and budget is allocated accordingly
• Foster an organizational growth mindset. This means that you not only adopt and embrace a growth mindset, but you sell it to your team, and foster that mindset throughout your company with a focus on creating new processes, leveraging technology and explaining what success looks like, with new key performance indicators.
• Create and build new revenue engines.?Launching new products or services is essential for growth, whether you build them internally, partner with other complementary organizations, or buy smaller innovative companies.
• Innovate new business models. We all know that business models can go stale and gather dust. Innovate business models that are fresh, new, and exciting; something your team will embrace and implement. Fresh and new business models might include different pricing schemes (such as subscription, licensing, bundling, etc.) or a shift in target clientele from B2C to B2B.?
• Create exceptional experiences. There may not be anything more important than this. If your business is not creating good experiences, you are not going to beat the competition. But if you are creating exceptional experiences for your clients, your business will grow, because client satisfaction will match that exceptionalism.
• Repurpose existing talents and assets. I touched on this a bit earlier. This is one of the keys to successfully unleashing your growth opportunities. Because it doesn’t rely on new talent or assets; it looks at new ways to leverage existing talents and repurpose existing assets in the service of a more successful and robust company, where everyone and everything is working at peak performance.

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Our structured approach to unleash growth opportunities:?

Typically, it requires 12-16 weeks to identify, prioritize, select, and launch top-line growth opportunities. We divide this into three phases, so management has the opportunity to opine and approve moving to the next step.

• Phase 1 : Discovery and Opportunities Identification: Situation assessment followed by a high level ideation and prioritization of business ideas that meet the growth goals of our client. In this interactive step, we identify, evaluate, and prioritize as many relevant business ideas as possible (inclusive of quick wins, as well as incremental or broader ideas). The criteria for evaluation and prioritization are high-level metrics such as revenue potential, alignment with our client’s overall strategy, operational feasibility, time to realize financial benefits and potential risks to the organization.
• Phase 2: Opportunities Analysis: In-depth analysis of two to three opportunities that surface from the previous phase and that our client management and/or board want to investigate. The analysis typically includes business model assumptions, a 3-year P&L, required investments, hiring requirements, and high-level risk analysis
• Phase 3: Go-to-Market Plan and Launch: Develop the go-to-market approach for the top idea chosen by our client’s management team and/or board

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Our approach works for different types of organizations, revenues, or stages of development, including:

• Newly funded organizations (Series A and beyond) /Mid-market organizations /business units of Fortune 500, as well as non-profit organizations
• Organizations that seek adding $1M, $10M or $100M in incremental revenues
• Organizations with 3-, 5-, or 10-year outlooks. This approach works regardless of the financial criteria used, such as NPV, ROI, break-even point, or Free cash flow.

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Furthermore, as former entrepreneurs and business-builders ourselves, we are interested in staying engaged with our clients should they choose to include us in the building phase.

Our unique approach to unleashing growth opportunities has produced some great results. The following examples showcase powerful results from four companies we have had the privilege to advise.

Licensing Organization

Through business model innovation, efforts are currently on track to deliver $50-$100 M incremental of EBITDA at maturity. We designed and built on innovation programs by directing and mentoring a strongly matrixed team. We mentored executives in a business model innovation focused on creating:

• new revenue sources?
• new models
• encompassing revenue sharing?
• white labeling joint ventures
• acquisition and investment in start-ups

A US Wireless carrier

We led a go-to-market strategy and business case for this wireless business. We led the building of a team of 15 FTEs that generated $150M in incremental revenues in five years.

Media Company

We directed product and services development in collaboration with an innovative team at this nonprofit media company. They incorporated 800 of our ideas to launch five new digital products within a 24-month period.

These are just some of the success stories Advisors at Aramis have had the privilege to help create. We believe passionately that every company and organization has the potential to unleash growth opportunities beyond their wildest dreams. We would like the opportunity to help your business realize its greatest potential.?

Conclusion

Steve Andriole, Professor of Business Technology in the Villanova School of Business at Villanova University wrote in Forbes, “companies who fail to innovate their business models, organizational structures, and leadership teams find it ‘difficult’ to adjust to news ways of thinking and doing. The fear is driven by uncertainty.”

At Aramis Advisors, we understand the uncertainty we all live with. The pandemic that turned the world on its head two years ago still threatens our global health and rattles the stock market. While people became cautious behind masks, staying home, and avoiding contact, businesses were hurt, and some are continuing to experience the very human reaction to crisis: caution and the instinct to hunker down and hold back. I encourage you to courageously move towards a growth mindset for your business, despite the challenges we all face in these uncertain economic times. In fact, I’ll go a step further and posit that uncertain times require an intentional growth mindset more than ever.?Either grow or be left in the dust.

Jack Welch taught that it is a leader’s job is to look in the future and see the organization not as it is, but as it should be. We aim to do that for our clients.

Aramis Advisors has a culture committed to excellence, our work is peerless; honesty, we only take clients we know we can help; collaboration, we treat our clients as partners; and action, we are not consultants who give you a road map and then walk away. We are entrepreneurs and business builders who stay with our clients to help implement the strategic plan. ?Along with these core cultural values, we are committed to creating social impact through promoting sustainability and environmental responsibility. Our core values drive everything we do, and our social impact commitment is woven into the fiber of our company. By delivering excellence with integrity in a collaborative and action-oriented manner, Aramis Advisors can help your company unleash your growth opportunities today for abundant success tomorrow.?