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Building A Best In Class Strategic Plan

We have found three specific situations when having a best-in-class strategic plan makes a huge, life-changing difference relative to a good plan for growth-focused distributors:

  1. Pre-sale, so you get the best possible multiple.
  2. Post acquisition, when you need to maximize ROI and profitable growth.
  3. A strategic reset, when you know you’re leaving a lot of opportunity on the table and need a reset.

With the distribution space changing faster than ever, leaders at growth-focused distributors are taking a fresh look at how to sustain and accelerate top and bottom-line growth. Developing a thoughtful strategic plan can help your organization deliver above-market growth by helping your company identify, prioritize, resource, and execute on its top growth opportunities.

A critical first step to any strategic planning effort is creating and then aligning your team around a clear vision and strategy. You can accomplish this by putting together a strategic one-pager that covers three key questions:

  • What is our winning aspiration?
  • Where will we play?
  • How will we win?

Your winning aspiration should encompass the purpose of your enterprise and what guides your organization. To answer how you play, you should identify all aspects of your playing field including geographies, product categories, and customer segments. Finally, your “how we will win” statement should capture your unique value proposition and competitive advantage. Your answers to these questions will become the basis of your team’s strategic plan for the next ~3-5 years.

After putting together your one-pager, your organization can identify its best opportunities to get to action on that strategy. First off, make a list of all of your top opportunities for growth. Some examples could be product portfolio expansion, expanded sales enablement technology, or distribution efficiency optimization. In general, you should look for opportunities that tie to your winning aspiration.

You then want to prioritize your top opportunities. Many distributors make the mistake of trying to pursue too many opportunities at the same time. Instead, we recommend picking ~3-5 of your top opportunities to focus on. To get that prioritization right, go back to your list of key opportunity areas and estimate the potential income uplift from each opportunity, taking into consideration the potential upside revenue, related incremental costs (e.g., sales team salaries), and any large investments required. We recommend using consistent assumptions and a standard methodology to do this well. This will help you see which opportunities offer the largest financial impact.

We also recommend taking into consideration an additional variable: your organization’s ability to execute (say on a scale of 1-10) each opportunity. Some opportunities will be easy to execute. Conversely, an opportunity may offer a significant financial opportunity – but be quite challenging for your practice to successfully deliver given the potential changes required to deliver. This opportunity would then have a relatively low ability to execute.

With financial impact and ability to execute for your top potential opportunities, you can prioritize. Based on our experience, we recommend that distributors focus on the top ~3-5 opportunities. Many distributors substantially slow their growth by trying to do too much and not focusing. But it’s best to thoughtfully prioritize and focus on the top opportunities that will really make an impact.

Through this strategic planning process, you can effectively reset your organization’s strategy with a summary of your organization’s ~3-5 year strategy and your key opportunities to execute on that strategy. Apart from utilizing this process for a strategic reset, we help growth-focused, middle-market companies create great strategic plans in two other scenarios: 1) pre-sale, so you get the best possible multiple; and 2) post acquisition, when you need to maximize ROI and profitable growth. With a clear vision for your organization and initiatives to get there, your organization can unlock above-market growth that can grow your top- and bottom-line.

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Written By

John Nantz headshot

John Nantz

Founding Partner, Redwood Advisors

John Nantz has delivered over 75 projects as a management consultant over the last 10 years with a focus on growth strategy and commercial excellence for distributors, manufacturers, and other clients. Former clients include GranQuartz, Ares Private Equity, and McElroy Manufacturing among others. John started his career at McKinsey & Company’s San Francisco office and earned a BA with distinction in Economics and an MS in Management Science & Engineering from Stanford University.

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