Let’s talk about growth…
A central question for many companies, whether private equity-backed or not, is how to grow their business. To tackle this question, David Denious, as moderator, lead the following accomplished panel of private equity-backed CEOs, who are leaders of companies in different industries, of different sizes and in different stages of the life cycle, as they shared their insights on key company growth issues ranging from organic and strategic growth opportunities, challenges influencing their industries and outlook, and their private equity partnerships.
MEET THE EXPERTS
Organic growth or growth through strategic acquisitions?
Businesses look to grow either through organic growth or strategic acquisitions. The path a business chooses, whether organic growth, acquisitions or a combination of the two, is often dependent on the specific business and its role in the relevant marketplace.
For Jyothish Daniel, CEO of Portadam, his company’s growth strategy has been more focused on organic growth rather than acquisitions, which strategy is driven by the specialized nature of Portadam’s services. Portadam’s strategy has focused more on putting in place a network of alliances with firms that can complement its capabilities, which enables the company to provide its customers with a suite of solutions. This approach has served to be more efficient in a specialized industry than a pure acquisition strategy.
As a CEO of a company in a more mature industry and one in which the company is a leader in the marketplace, Peter Madeja, President and CEO of Genex Services, has found that the best strategy for growth is one of both organic growth through the company’s existing client base through an expansion of services and an aggressive acquisition strategy.
At the helm of Harvest Seasonal Grill & Wine Bar, Dave Magrogan has focused on a strategy of organic growth based on finding and opening new locations, while also being open to potential acquisitions, including acquisitions of second generation spaces.
Finding a balance between organic growth and the acquisition opportunity cost tradeoff
As CEOs and management teams navigate their growth strategies, they are often faced with the question of how to balance the tradeoff of opportunity costs associated with managing the time and expense of pursuing acquisitions against organic growth. Our experts shared various suggestions for how they have worked to find that balance:
Human capital challenges and solutions
While human capital is essential to the successful growth of a business, it was unanimously recognized that there are significant challenges associated with the human capital side of almost any business, including, to name a few:
Suggested solutions for overcoming the foregoing challenges included:
Final word: what to look for in a relationship with a private equity partner