How Acquisition-Led Growth Increased Complexity Without Value
Revenue-focused acquisitions increase complexity while distracting focus, resulting in diluted business value & delaying exit horizon.
Case study - Control challenge stage
CEO Knew Clear Focus Needed to Deliver Revenue & Exit Targets
Are:
- Acquisitions causing you to run several businesses with no clear commercial direction?
- Revenue targets agreed but lack decisive action plan?
- You sensing increased complexity is quieting eroding your exit value?
Client Challenge:
In business for 20 years, the core software business remained stable but revenue had plateaued for several years. Multiple acquisitions had increased complexity without materially increasing value. With retirement looming for owners, there was tacit agreement that business value needed to substantially increase prior to seeking a buyer. While discussions on doubling revenue & exiting in 2-3 years were bandied about by the board, there was no clear commitment to action it. Inertia was stalling growth.
With approx. 45 employees across company, each legacy business was managed separately with limited cross-selling opportunities. A lack of coherent vision or strategy, made doubling revenue unlikely. In addition, equity ownership was a mess & had to be resolved before any material changes could be made.
As a shareholder heading towards retirement, the CEO recognised business couldn't scale effectively without resolving fundamental questions around market proposition, strategy, & ownership.
Our solution:
Working with CEO, on a 1-2-1 basis, completed Business Model & Strategy Development workshops:
- Mapped & compared each companies’ business model
- Identified unifying strategic purpose
- Evaluated which businesses strengthened medium-term strategy & which distracted management attention & diluted value
- Identified product/service gaps in ability to deliver strategy
- Clarified ownership complexities & identified path to resolution
On-going strategic advisory support provided CEO the space to identify core issues, craft compelling solutions & how best to influence parties, to support inevitable changes needed to reach their ultimate revenue & exit goals.
Case Study Outcomes
- Rebranded core business, to align with new vision
- Successfully resolved ownership questions
- Created board-level commitment to realistic growth & exit strategy, with firm timelines
- Commenced process of divesting unaligned companies
- Focused investment in products & services aligned to growth strategy
If you’re managing a company between 30 – 70 employees & seeing similar issues, there are usually 2-3 key issues causing them.
We can quickly show you what they are & how they can be addressed.
Otherwise, increasing headcount costs with falling quality may result in loss of clients & financial strain.
“Irial's approach was highly practical, cutting through the noise to help build a framework that made sense for our specific medium-term goals”
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