Building exceptional boards of directors in growth stage technology businesses litwiller - june 2012
The Search For Growth - Company Directors
Transcript of The Search For Growth - Company Directors
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(“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of
KPMG International. Liability limited by a scheme approved under Professional Standards Legislation.
What are the most critical challenges you
expect to face as CEO over the next three
years? (Top 5 ranked in descending order)
1. Expanding geographically
2. Adapting to government regulation
3. Strengthening our brand*
4. Focusing on operational excellence*
5. Spurring innovation
Is growth on your mind… efficient growth?
“The vast majority of CEOs are optimistic about the economy and their own business
prospects in the coming three years. They see possibilities for ‘efficient growth’ and the
potential to leverage new technologies to enhance customer relationships and streamline
operations.”
John Veihmeyer
Global Chairman, US Chairman and CEO of KPMG
Sourced from KPMG global survey: ‘Setting the course for growth: CEO
Perspectives’
* same value
Which is more important to your
company’s overall well-being?
72%
28%
Overall focus
on growth
Overall focus
on operational
efficiencies
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(“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of
KPMG International. Liability limited by a scheme approved under Professional Standards Legislation.
Developing and implementing a growth strategy
Alexander Osterwalder’s Business Model Canvas*
Cost structure Revenue Streams
Key Resources
Key Activities
Key Partners
Value
Proposition Channels
Customer
Segments
Customer Relationships
At the core of every business is their Value Proposition
*Business Model Generation by Alexander Osterwalder : Paperback John Wiley and Sons Ltd
3 © 2015 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative
(“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of
KPMG International. Liability limited by a scheme approved under Professional Standards Legislation.
Developing and implementing a growth strategy
Alexander Osterwalder’s Business Model Canvas*
Cost structure Revenue Streams
Key Resources
Key Activities
Key Partners
Channels
Customer
Segments
Customer Relationships
At the core of every business is their Value Proposition
Value
Proposition
*Business Model Generation by Alexander Osterwalder : Paperback John Wiley and Sons Ltd
4 © 2015 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative
(“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of
KPMG International. Liability limited by a scheme approved under Professional Standards Legislation.
Common lifecycle and growth phases
.
Source: Informed from the Greiner Growth Model, Larry E Greiner
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(“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of
KPMG International. Liability limited by a scheme approved under Professional Standards Legislation.
Periods of upheaval and turmoil are inevitable
Resolution
of Crisis
• Owner can’t & not
equipped to do
everything
• Staff crave structure
• Owner wants control
• Staff crave autonomy
• Motivation suffers
• Lack of performance
metrics
• Owner feels loss of
control
• Silo based
• New leadership model
• Different capabilities
• Formal structure
Need to evolve organisational
structure Provide more
responsibility Owners need to let go
New way without
reverting back to
centralisation
• Processes
overbearing
• Overheads increase
• Procedure driven
• Streamline processes
• Focus on value add
• Promote problem solving
• Too much internal
management
• Too removed from customer
Symptoms
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KPMG International. Liability limited by a scheme approved under Professional Standards Legislation.
Grill’d Burgers moving into Build phase
• Who is the right leader?
• Who has right skills?
• How can I let go?
• What processes, systems and
structures do I need?
Grill’d
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(“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of
KPMG International. Liability limited by a scheme approved under Professional Standards Legislation.
The goal is to progress efficiently as possible
Foundations for Growth
Growing companies are
always either ahead or behind
in their financial systems.
We started ahead, but more
recently find ourselves
needing an overhaul.
Simon Crowe, Grill’d. BRW Best of the mid market – Unsung Heroes
Grill’d
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(“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of
KPMG International. Liability limited by a scheme approved under Professional Standards Legislation.
Operating model needs to evolve and adapt
How often do you evaluate your operating model?
Leading practice is to
review and adapt your
operating model at least
annually
Sourced from KPMG global: ‘Setting the course for growth:
CEO Perspectives’
9 © 2015 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative
(“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of
KPMG International. Liability limited by a scheme approved under Professional Standards Legislation.
Step back
Manage by exception
Expansion of market
Customer led
Innovation
Continually reviewed
Owner directed
Business plan
Budget established
Direction &
Strategy
Ideas
Creative
Make to sell
Consolidation
Renew strategy
Market & customer focus
Rationalise
Values driven
Team matrix
Problem solving
Customer centric
Owner directed
Formal hierarchy
Formalised roles
Decentralised structure
New leaders
Technical managers
Profit centre structure
Organisation &
People
Head office function
Centralised &
decentralised
Performance & reward
Informal
Owner resourced
Value add
Automated
Leading practice
Simple support processes
introduced from own
knowledge
Internal processes
continue to evolve
Finance metrics
Manual
Process
Formal & documented
processes
Procedure focus
None: fluid
What do the foundations look like for each phase? F
OU
ND
AT
ION
S F
OR
GR
OW
TH
Enterprise structure
Simplified
Work standards
established
Periodic reporting
Action by exception Risk and control
Dedicated resources to
manage entity-wide
controls
None: reactionary
Basic operational &
bookkeeping systems
established
Reliance on existing
systems
Technology
Enterprise wide
Reporting & Business
Intellgience
Limited Forward looking
Analytics
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(“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of
KPMG International. Liability limited by a scheme approved under Professional Standards Legislation.
• Path is not always linear
• Symptoms across a number of
phases
• Foundations are oversized for the
business stage
• Business practices need to adapt
to ‘right size’
Case study: law firm in accelerate phase
• Sense of loss of control
• Silo operations
• Overhead costs increase
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(“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of
KPMG International. Liability limited by a scheme approved under Professional Standards Legislation.
Where to from here – three critical questions
• Where has the organisation been?
• Where are you currently in the growth lifecycle?
• What does this mean for where you are going?
12 © 2015 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative
(“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of
KPMG International. Liability limited by a scheme approved under Professional Standards Legislation.
Developing and implementing a growth strategy
Alexander Osterwalder’s Business Model Canvas*
Cost structure
Key Resources
Key Activities
Key Partners
At the core of every business is their Value Proposition
Revenue Streams
Channels
Customer
Segments
Customer Relationships
Value
Proposition
*Business Model Generation by Alexander Osterwalder : Paperback John Wiley and Sons Ltd
13 © 2015 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative
(“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of
KPMG International. Liability limited by a scheme approved under Professional Standards Legislation.
Developing and implementing a growth strategy
Growth Framework - How to think about strategic initiatives
Customers / segments
Diversified Channels
Markets
Pricing
Strategic Alliance
Acquisition of Competitors
Acquisition of Book
Joint Venture
Products / Services
Option Types Examples
Demographics, Business, Consumer, Industry
Distributors, Online, Face to Face
Bundling to increase client value prop, new offers
New segments, new geographies, new brands
Premium / budget brands, volume play, niche / high
margin play
Pricing, trade spend management, promotional
effectiveness
Corporate overheads (people, T&E etc.), supply chain, stores
Systems streamlining
Inventory, payables / receivables,
Option Types Examples
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(“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of
KPMG International. Liability limited by a scheme approved under Professional Standards Legislation.
There are many options to consider…
Innovation
Products &
services
development
New sales channels
Brand positioning Other options…
Sales channel efficiency
Digital strategy
Promotional strategy
Search engine optimisation
Client segmentation improvements
Repricing
Exploring partnerships
Repositioning value proposition
Multi-channel marketing
Loyalty reward schemes
15 © 2015 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative
(“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of
KPMG International. Liability limited by a scheme approved under Professional Standards Legislation.
Brand positioning: budget, premium or both?
Premium
Somewhere in Between
Budget
“Our future will be a world of
paradoxes and to every megatrend
you can find another smaller trend
which appears to oppose it.”
Patrick Dixon – Futurist
Sales of budget brands AND super-premium brands are both set to grow (www.globalchange.com)
Lower Costs Through:
1. Experience
2. Scale economies
3. Established networks
4. Efficiency, lead costs
FOCUS
5. Capital, technology
6. Intrinsic advantages
Added value through:
+ Product
+ Support
+ Distribution
+ Brand
Porter’s Brand
Positioning Model
Strategy is
about picking
one pathway and
not ending up in
“no mans land”
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(“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of
KPMG International. Liability limited by a scheme approved under Professional Standards Legislation.
New markets via new sales channels
Online Distributor
Emerging Trend
Retail Face 2 Face Contact Centre
Emerging Trend
Diversify to reduce risk
Access new geographies
Access new target markets
Bundle channels for better experience
Client example
Sports shoe retailer
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(“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of
KPMG International. Liability limited by a scheme approved under Professional Standards Legislation.
Product or service development?
The ERRC Grid
Cirque de Soleil ERRC Grid High Competition
Downward
pressure on price
Lowering
margins
Unique Offer
One Stop Shop
‘End to End’
‘Money can’t Buy’
Reduced Risk
Reference - Blue Ocean Strategy: W. Chan Kim and Renée Mauborgne
ELIMINATE
Which factors that the
industry takes for granted
should be eliminated?
RAISE
Which factors should be
raised well above industry
standard?
REDUCE
What actions should be
reduced well below the
industry standards?
CREATE
Which factors should be
created that the industry
has never offered?
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(“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of
KPMG International. Liability limited by a scheme approved under Professional Standards Legislation.
Product or service development?
CLIENT EXAMPLE
Australian Manufacturer CLIENT EXAMPLE
Custom Jewellery Retailer
Cradle to grave
Less downtime
Relationship with end user
Hold price premium
Reduce reliance on distributor
Experiential
Embracing retail
Exclusivity
Partnership
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(“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of
KPMG International. Liability limited by a scheme approved under Professional Standards Legislation.
The rise of the innovative Start-Up
DISRUPTIVE
BUDGET
INNOVATIVE
The Dollar Shave Club
12,000 people signed up in the first 48 hours.
The company has five full-time employees
The Dollar Shave Club has raised USD$1m in ‘seed’
funding from venture-capital firms
Meanwhile, Gillette's own studies have shown men
going to great lengths to keep down the cost of
shaving.
Big companies can't rule out the risk that one of these
ventures takes off – and takes significant market
share
20 © 2015 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative
(“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of
KPMG International. Liability limited by a scheme approved under Professional Standards Legislation.
Do you have a growth strategy?
Considerations
■ Define the organisation’s business goals, direction and objectives
■ Communicate the organisation’s value and differentiation in the market
■ New products, new services, bundled offers to differentiate / create value
■ Sales channels – diversifying to access new markets & geographies
■ Segment your clients/customers into groups to identify growth potential
■ Understand the current situation within the organisation and externally in the market
■ Understand the competitors capabilities and market presence
■ Identify digital tools and channels which can enhance the strategy and Integrate with
advertising and other promotional strategies
■ Review historical sales data to identify growth opportunities
■ Conduct customer surveys / focus groups to deepen understanding of their needs
■ Once Growth Strategy defined, create project plan to support implementation
■ Methodology and process to support the growth strategy in operation
Business Goals
Client Value Proposition
Product & Service Offers
Channels to Market
Customer Segments
SWOT Analysis
Competitive Analysis
Promotion & Market Positioning
Historical Customer Analysis
Tactics
Customer Satisfaction
Develop Action Plan
Implement, Measure & Monitor
The information contained herein is of a general nature and is not intended to address the
specific circumstances of any particular individual or entity.
© 2015 KPMG, an Australian partnership and a member firm of the KPMG network of
independent member firms affiliated with KPMG International Cooperative (“KPMG
International”), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through
complexity" are registered trademarks or trademarks of KPMG International. Liability limited by a
scheme approved under Professional Standards Legislation.
Presenter’s contact details
Toni Jones
Partner
03 9288 6699
Colette Smith
Director
08 8236 3342