The Smith Report - Operational Tips for Busy Execs - Weekly

Alignment – the key ingredient of success

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Alignment sounds easy but to articulate a vision that attacks a gap in the market and is then executed with a business model that works is deceptively difficult.

In the year to July 2009 only 1453 UK private companies were acquired out of around 1.3 million. They reckon around 1 in 100 start ups survive more than 2 years.

In other words if you are running a private business that is profitable and running at say $2m to $5m of sales you are in a rarefied atmosphere. A tiny number of entrepreneurs build a business that someone wants to buy.

Assuming therefore that your desire for you and your shareholders is to build a remarkable business, one that has rarity value, one that someone might buy one day – is there a secret sauce, a playbook to beat the odds?

I would make these observations that I’ve noticed in the more successful ventures:

  • Clarity on what the business is good at and what it is not. Skills Alignment.
  • Validation that customers are prepared to pay for the value you provide. Market Alignment.
  • A sales model involving a small dedicated team that is scalable. Business Model aligned with products.
  • Training of staff is a high priority leading to a huge differeniator in the market. Alignment of training needs with successful execution.
  • First versions of products are lavished with an unreasonable amount of time with their early adopters. Deep alignment with customers.
  • Micro-measurement: Everything is measured, graphed and published constantly to influence behavior. Alignment of behavior & success.
  • The language of the business is “Value Achievement” for clients at a profit. Alignment of products and value achieved.
  • Marketing & sales are totally aligned i.e. sales teams actually use the collateral & follow up on leads relentlessly. (scary thought)

Alignment is a game of inches. It is subtle. Good luck!


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About the Author

Smith has been creating remarkable businesses since the early 80s with Thomson (now Thomson Reuters), creating Livingstone Guarantee an early leading investment banking boutique as the second employee, building the FTSE 100 Capita Group in the 90s and more recently turning around software businesses in Boston over the last decade. He formed The Portfolio Partnership in 2010 to help CEOs fulfill the potential of their businesses. Ian’s book, Fulfilling the Potential of Your Business, recently won the Small Biz Book Awards for Management. Still competitive, Ian is ranked #1 in the US at 400m on the track for his age.

Discussion

  1. PFP Cronin  November 19, 2009

    Great note Ian. So true, but so often ignored by mediocre companies. Keep them coming. – Paul

    (reply)
    • Smith Report  November 20, 2009

      Thanks Paul, so many companies could improve their performance with more effort on alignment.

      (reply)

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