Building Shareholder Value and Business Owner Wealth in 6 Steps

How to Focus and Reconnect with Markets and Customers in Order to Optimize Growth
By: Mark Gaeto – Managing Partner

Why are CEOs failing to realize their expectations around growth and company valuation?

Several studies show that the primary concern of mid-market and small business CEOs is top-line growth. And yet, only 9% of the CEOs interviewed for another study by Bain Consulting actually achieved their growth targets. Despite their best efforts, only one in ten CEOs is reaching his or her growth objective.  So what explains these disappointing results? Are their expectations too high? Are their targets too lofty and unachievable? Do they give their strategy and the change required to implement it enough time? Are they well-funded? Do they communicate their plans and create urgency around growth targets? Do they have the detailed plans to operationalize their strategies – and the management teams to implement and drive them? Or do they simply fall short at leading?

One technology executive that successfully met his growth objectives is Lou Gerstner and grew shareholder value significantly. In his parting letter to shareholders, Gerstner, who as CEO led IBM to a glorious comeback in the 1990s, spoke of a “massive shift” occurring in the technology industry. Technology companies, he explained, must become increasingly “customer-driven” and “services-led” if they are to address the emerging demands of the market.

As he elaborated in his book Who Says Elephants Can’t Dance?, the tech industry maintains a “remarkable detachment” from its customers. It tends “to ignore human behavior, human preferences, human biases, and personal and institutional demands that emanate from the non-technical parts of people’s and companies’ lives.” Gerstner added that if today’s technologists were to truly stand in their customers’ shoes they would find “the promises overblown and the returns more difficult than promised.” This is still true in current times!
As the passage suggests, Gerstner and his team realized that they must face the facts on the ground if they were to successfully lead Big Blue’s turnaround. However, even the best of companies can get disconnected from the market and its opportunities. They lose their focus, and when they do so they tend to lose their way.
We’ve seen some executives get obsessed with developing the next new thing – pouring large sums of money into ideas that have not been meticulously researched and validated. Others reach too far beyond the capabilities of their organization – as in moving from a product to a solutions approach. They create visions and plans that are too complicated. Some get too far ahead of what buyers want. Others just don’t have the experience to take their firms to the next level of execution and performance.

It is the CEO’s challenge to help the firm identify and capitalize on market opportunities. Such leaders need to help their firms get reconnected. But how? By listening to the voices of the market. The answers to growth are out there. Companies need to hear what these voices are saying and accurately interpret their signals.
Here are six steps enterprising firms – and the enterprising executives that lead them – must take to meet their growth objectives in today’s hyper-competitive markets. This strategy, which we call “Opportunity-to- Cash” (O2C), represents a proven method for unlocking the secrets that the market is willing to reveal.
We just need to listen, learn, and take action.

Step One: Uncover Actionable Market Insights. Every company has a vision, but is it based on fact or fantasy? Is it dated? Is it developed in a vacuum — within the four walls of the board room — or within the context and realities of the marketplace? CEOs and their teams need to regularly step back and reexamine where the company is heading so that they can recognize if they are on course or heading into heavy seas.
Most companies need to check their direction quarterly or mid-year, with a major refresh every three years. Many times CEOs take pause due to major competitive events or the departure of a key executive or a revenue miss. A more regular cadence of reviewing the business environment, external and internal trends helps alert executive teams to changes and challenges in the market. It helps them respond more assertively and effectively.
Step Two: Scan the Market for Growth Opportunities. It takes more than an offsite or series of workshops to truly validate company direction – or vision. As mentioned, the challenge of seizing market opportunities begins with a vision that is based on a clear assessment of the existing business environment. That assessment has to be fact-based. Therefore, it’s absolutely critical to begin with research and analysis that generates a strong understanding of key happenings and to seek where unmet customer value might lie. We call this the grounding and bounding process – a process of understanding what restricts and what unleashes your vision.
This phase of an O2C project delivers a detailed external analysis that helps define the market opportunity. This opportunity analysis should identify how value is migrating in the industry. Where do the new sources of value lie? Current and future market opportunity space analysis provides the basis for developing compelling growth strategies. The O2C framework helps re-confirm or re-align a company’s direction and effort based on an understanding of the current market opportunity space.
Step Three: Develop a Clear Statement of Competitive Differentiation and Solution Value Propositions. In this phase of the Opportunity-to-Cash framework, companies identify compelling sources of customer value that can generate long-term growth and profit. The external analysis of Phase Two provides the basis for understanding the market: customer voices, partner voices, competitors’ strategies and positioning, winning business models, and other items that provide the basis for developing the manner in which the company will distinguish itself from the competition over time in order to create a sustained competitive advantage.
In Phase Three, we develop our own unique basis of competition – consistently differentiating our enterprise in the mind of the customer. We create successful value propositions for our offerings! Ones that are relevant to the customer, easily communicated to the market, and that create a compelling reason to buy. As part of the above efforts, we will find ways to enhance the customer’s buying experience and reduce the barriers to buying.
Step Four: Focus and build your plans. At this point, we are prepared to organize for seizing the market spaces that represent the greatest opportunity. Relying on the go-to-market vision, the environmental analysis and value propositions presented above, we can now begin to identify, evaluate and conceptualize go-to-market initiatives or strategies. It is important to understand the cause-effect relationship between various go-to-market initiatives and their objective to effectively align and implement the action plans across the organization.
Go-to-market initiatives are the chief priorities that one’s company must act on in order to realize its go-to- market vision. These initiatives detail the strategies that drive change in a firm’s operations.
Step Five: Drive the change and make it happen – do what you set out to do. In this phase, company executives define the plans, work streams, budgets and resources required to make go-to-market strategies actionable and measurable. Strategic initiatives are assigned to senior management sponsors who oversee the development of plans and their alignment to the vision. Phase Five is about building a well-structured, cross-functional effort.
The CEO needs to ensure that a clear operational project plan is built to set down what gets done, in what order and by whom. This needs to go beyond creating a list of tasks or strategic planning binders. Instead, the team maps the go-to-market initiatives, and fine-tunes project plans to establish time lines with milestones and the resources needed to meet them. The plan needs to be explicit about team and individual employee assignments and accountabilities including their specific objectives and rewards.
Step Six: Execute and measure – and hold everyone accountable! Our O2C framework for making growth happen requires a formal cross-functional governance structure, clearly defined responsibilities and accountability, and performance metrics with appropriate rewards. Most important, senior executives need to use a variety of approaches to communicate and teach new behaviors and procedures.
Senior executives must regularly show the organization that the new approaches offered in Opportunity- to-Cash will help improve performance. Making links between good behavior, process discipline and performance is critical. Through key performance metrics and incentives, you can ensure that the organization is meeting its commitments, generating compelling results and continually improving.
Conclusion: Achieving growth objectives and increased shareholder wealth through better analysis, management and execution
Opportunity-to-Cash represents a smart, rigorous and disciplined way to seize new market opportunities and drive new levels of profitable growth and drive up shareholder value!
Too many companies today act in an analytical vacuum and pursue strategies that are reactive, and not supported by the facts of the day or the capabilities of the firm. Many spend vast amounts of money simply trying to introduce the next new thing. Many don’t clearly understand the marketplace. Many don’t appropriately test or validate their ideas. Many don’t govern initiatives in a way that ensures accountability and progress. Not surprisingly, many fall far short of their business objectives.

Bottom line: We won’t seize our unmet opportunities unless we develop market sensing skills by regularly testing our direction, scanning the market, listening to its various voices, diligently assessing our findings, understanding the value customers seek – and taking decisive action in the marketplace.
Repeatable success will require us to reconnect to our markets, realign our organizations and reposition ourselves for newly identified opportunities. These are the imperatives of today’s hyper-competitive markets. These are the steps we must take to truly differentiate ourselves and deliver enduring growth and propel shareholder wealth to higher levels.
Mark Gaeto is a managing director with Falcon Capital Partners, a leading mergers and acquisitions firm, where he directs their commercial information technology practice. He provides strategic advisory and capital raising services that leverage his deep industry knowledge with extensive execution experience.

Mark can be reached at 610-989-8903 or