{"id":137,"date":"2020-01-20T15:37:31","date_gmt":"2020-01-20T15:37:31","guid":{"rendered":"http:\/\/enlightblog.com\/?p=137"},"modified":"2020-05-12T12:47:09","modified_gmt":"2020-05-12T12:47:09","slug":"looking-for-growth-in-all-the-wrong-places-our-value-creation-vector-can-help","status":"publish","type":"post","link":"https:\/\/enlightadvisors.com\/blog\/2020\/01\/20\/looking-for-growth-in-all-the-wrong-places-our-value-creation-vector-can-help\/","title":{"rendered":"Looking For Growth In All The Wrong Places? Our Value Creation Vector Can Help"},"content":{"rendered":"

\"Global<\/p>\n

For nearly 15 years, we have\u00a0been fortunate to serve great clients. Although each situation is unique, most clients seek to grow their company or improve their profitability – or achieve both results at once. \u00a0However, at the beginning of most engagements, the client is often focused on growing the business but doesn’t have a handle on their profitability – or their ability to improve it.\u00a0 Or, perhaps they’re having an internal debate about the importance of growth v. cost cutting v. operational efficiencies.\u00a0 \u00a0Or, maybe they just don’t see a clear path from where they are to where they want the business to be in the future.<\/p>\n

Solving this quandary is where we deliver value.\u00a0 It may sound simple, but\u00a0helping our clients address the right questions at the right time is one of our differentiating skills.\u00a0 What are we trying to accomplish?\u00a0 What are the most important questions to answer first?\u00a0 What data do we need?\u00a0 How can we eliminate irrelevant noise?\u00a0 What questions come next?<\/p>\n

\"valuecreationvector-pedmas\"<\/p>\n

Order Matters<\/strong><\/p>\n

I think of sequencing our client engagements much like the concept of “Order of Operations” in math.\u00a0 Remember that from middle school?\u00a0 (Maybe you learned it in elementary school…I went to public school in rural Kentucky, so cut me some slack!)\u00a0 The image at the left provides a quick refresher in case you’ve blocked out the details.<\/p>\n

Like solving a complex equation, successful consulting engagements pace the questions so clients address the right questions or decisions in the right order.\u00a0 Trying to address everything at once or addressing them out of order can be paralyzing.\u00a0 All too often we find clients – and their executive teams – muddling through questions and decisions, creating a continuous loop of uncertainty.\u00a0 Or worse, they’re stuck in a debate where the loudest, most powerful voice in the room wins, regardless of what is actually best for the business.<\/p>\n

We provide a structured, efficient approach to work through the right stuff at the right time.\u00a0 Laying out an appropriate order of operations simplifies the work.\u00a0 You can almost hear the collective exhale as client teams sigh in relief.\u00a0 \u00a0One of the tools we use is the Value Creation Vector.\u00a0 This tool helps us zero-in on the most important factors for each client, depending on their situation and needs.\u00a0 The Value Creation Vector isolates factors that address profitability, growth and effective management and relates them the opportunity for value creation.<\/p>\n

Why \u201cValue Creation Vector\u201d?<\/h2>\n

\"valuecreationvector-definition\"<\/p>\n

We developed the Value Creation Vector tool to capture an effective order of operations for helping clients drive real results to the bottom line.\u00a0 We focus on the right questions in the right order, taking\u00a0the client\u2019s goals and current performance into account.\u00a0We call it the Value Creation Vector because it assesses both the magnitude and direction of the opportunity.<\/p>\n

Examples of real-life client dilemmas we’ve encountered:<\/h2>\n

Acquisition Allure:<\/strong>\u00a0 We want to grow, and we need a West Coast presence, so let’s acquire ABC company.\u00a0 They seem to be successful, and it would be so easy to make a deal.<\/p>\n

Pricing Problems:<\/strong>\u00a0 We want to grow sales, so we’re going to lower the price of our most popular products.<\/p>\n

Chicken & Egg Growth:<\/strong>\u00a0 The VP of Sales says he can move lots of new products if only the VP of Manufacturing will figure out how to make them.\u00a0 The VP of Manufacturing wants to build a plan for new products before they try to sell them, and thinks the sales team should focus on increasing volume for existing products.<\/p>\n

With the Value Creation Vector, we quickly assess the current state to determine where to start and what to do next.<\/p>\n

\"ValueCreationVector-matrixsimple\"<\/p>\n

The model includes three levers: \u00a0Profit Potential, Growth Potential and Management Tenacity. \u00a0Each lever captures key elements that create value over time.<\/p>\n

Lever 1 | Profit Potential<\/h3>\n

Profitability is the ultimate barometer of a company’s health.\u00a0 Optimizing profitability is the easiest way to assure long-term viability.\u00a0 Job one is to assess the company’s potential to improve profitability.\u00a0 Even if growth is the ultimate goal, why grow something that’s mediocre (or worse), when you can grow something that’s healthy and profitable?\u00a0 I know, I know, improving what you already do may seem boring compared to shiny new objects (growth!\u00a0 innovation!\u00a0 acquisitions!) that are often hard to resist.\u00a0 But, I\u2019ve yet to encounter a company that has maxed-out their existing Profit Potential.<\/p>\n

Lever 2 | Growth Potential<\/h3>\n

Once you\u2019re comfortable that your company is performing at its peak, attention can turn to growing the \u201cmachine.\u201d \u00a0Assessing growth potential in a structured way helps focus energy first on why to grow – then where and how to grow.\u00a0 For example, all too often leadership is fixated on making an acquisition – sometimes they\u2019ve even identified the specific company! – but they can\u2019t articulate \u2018why\u2019 the move is good for the business.\u00a0 Acquisitions that don\u2019t clearly support a company\u2019s existing growth potential never live up to expectations and can ultimately destroy value.<\/p>\n

Lever 3 | Management Tenacity<\/h3>\n

It\u2019s safe to say no one has ever hired us to improve management tenacity. \u00a0And, that\u2019s a crying shame. This is where the low-hanging fruit abounds. Always. \u00a0A few small tweaks to how the management team works have lasting impacts on financial performance, longevity and morale – all with little or no financial risk.\u00a0 Honestly, it doesn’t get much better than that.<\/p>\n

In upcoming blog posts, I’ll outline how we use the Value Creation Vector to quickly get clients on the same page and on the right track.<\/p>\n","protected":false},"excerpt":{"rendered":"

It may sound simple, but\u00a0helping our clients address the right questions at the right time is one of our differentiating skills.\u00a0 What are we trying to accomplish?\u00a0 What are the most important questions to answer first?\u00a0 What data do we need?\u00a0 How can we eliminate irrelevant noise?\u00a0 What questions come next?\u00a0 \u00a0\u00a0With the Value Creation Vector, we quickly assess the current state to determine where to start and what to do next.<\/p>\n","protected":false},"author":2,"featured_media":151,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[2],"tags":[13,32,35],"class_list":["post-137","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-execution","tag-structure","tag-value-creation-vector"],"acf":[],"_links":{"self":[{"href":"https:\/\/enlightadvisors.com\/blog\/wp-json\/wp\/v2\/posts\/137","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/enlightadvisors.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/enlightadvisors.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/enlightadvisors.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/enlightadvisors.com\/blog\/wp-json\/wp\/v2\/comments?post=137"}],"version-history":[{"count":2,"href":"https:\/\/enlightadvisors.com\/blog\/wp-json\/wp\/v2\/posts\/137\/revisions"}],"predecessor-version":[{"id":298,"href":"https:\/\/enlightadvisors.com\/blog\/wp-json\/wp\/v2\/posts\/137\/revisions\/298"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/enlightadvisors.com\/blog\/wp-json\/wp\/v2\/media\/151"}],"wp:attachment":[{"href":"https:\/\/enlightadvisors.com\/blog\/wp-json\/wp\/v2\/media?parent=137"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/enlightadvisors.com\/blog\/wp-json\/wp\/v2\/categories?post=137"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/enlightadvisors.com\/blog\/wp-json\/wp\/v2\/tags?post=137"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}