Growth Drivers

As successful young companies increase in revenues, continued rapid growth becomes more challenging. The key issue for CEOs and their boards at this stage of development is understanding their positioning and what has driven past and current growth in the competitive environment. This requires an understanding of performance characteristics of the company's portfolio of products/services, and raises several questions. How can we leverage our core strengths and capabilities to seek continued growth while very importantly maintaining profitability? Where is additional growth coming from? Is it possible to generate this internally within current regions and markets? Are other growth drivers, such as m&a and global expansion, warranted and appropriate? Companies at this stage are ones for whom GA has had maximum impact.

Frequently continued growth does not necessitate relocation to a totally new market, but rather moving to adjacent markets, expanding to new territories, or considering strategic acquisitions that would leverage existing knowledge and resources. We think of the following as drivers of revenue growth and spend significant time discussing these options with managements as part of overall strategy development:

• The core business / adjacent markets - How do we further mine our current client base, and what product/service extensions can provide profitable growth?
  
• Regional/global expansion - How well does our current business transfer to other markets? What changes are needed by these markets? What partnerships are required?
  
• M&A - Does a targeted acquisition support product extension or a regional expansion strategy? Does it support the core business or does it take us to a new area? We urge our companies to be very careful about jumping into totally new businesses.
  
• Human capital - Do we have the right executives in place? Is there depth in the management team, and is that team provided the right incentives for profitable growth?
  
• Technology - Is technology scalable to support the growth plan, and can it be used to change our business model and/or industry dynamics?
  
• Financial structure - Do we have the financial resources to support our growth strategy? How much balance sheet flexibility do we have for future growth and/or acquisitions?
  
• Personal networks - Do we have access to those who can help transform our business (i.e. clients, influencers, partners, experts)? Does the board provide the expertise we need to grow?