By Steve Sheils

I’m the fellow CEO’s call in when they know their company requires a Health Check.

I’ve worked locally and for 20 plus international  companies, raised money for growth, and been on the sale and acquisition side many times.

Regardless of whether your company is earning a few million or a few hundred million, often these days the story from the top sounds something like this;

“Top line growth is slow, margins are shrinking, competition has never been tougher, product development cycles are too compressed, there isn’t enough money for innovation, my Senior Management Team (SMT) is weak and I don’t have the time to  fill the holes, my Board is telling me to create Shareholder Value but I am too busy chasing cash flow.”

Sound familiar? But the Fed’s keep telling us that our economy is fairing better than others in the G8! So, when does it all translate into profits? Seems traditional financing is an elusive quarry and servicing our debt has never been more expensive. And Venture Capital? Forget about it…

This is usually when our conversation turns towards “future Opportunity”.  I inquire, “is the total market for your product or service large, rapidly growing or both?” “Is the industry you are in now expected to become structurally attractive?”

Growth, considered by entrepreneurs and investors alike, should be rapidly growing because it is easier to acquire share than fighting it out in the trenches in a stagnant or mature market.

Remembering our Economic 101 class in University, we must consider the elasticity of the market we are in. It is a tool for measuring the responsiveness of a function to changes in parameters in a unit-less way. Hmmm, what was that?

Frequently used elasticities include price elasticity of demand, price elasticity of supply, income elasticity of demand, elasticity of substitution between factors of production and elasticity of intertemporal substitution.

Well if this is all becoming too heady for you, then let’s just ask the burning question; “What does your Business Plan say you should be doing in the section labeled Contingency Plan?”.

If that plan is a dusty document on the shelf (like so many), does your company have a Plan for Growth for this fiscal year?”.

Or is your SMT rolling with the punches and doing their best to make their numbers?”

Believe me, by the time our first meeting has reached this point, most CEO’s are ready to make changes – and quickly.

Usually an external resource is required to “be the prophet from afar” because while every senior manager is starved for change, the “outsider” has no baggage – only a passion for improvement.

Creating a plan for change, cutting operational expenses, shedding an employee or two and investing in sales and marketing activities is the path to change. And best of all, it will quickly become a positive mantra on everyone’s lips.

In my next post; “Throwing the change-up pitch” that gets the company squarely back in the game.

Reposted from The Brampton Board of Trade blog

Steve Sheils is the CEO of Authentic Vision for Change. Steve’s passion is helping companies make the difficult decisions required to achieve profitable growth in this tough economy.  He can be reached by email steve@sheils.com. Visit www.authentic-vision.com.

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