Navigating the Value Creation Journey

Confidential© Catapult 2016 © Amplify Growth 2016 catapultgrowth.com

Navigating the Value Creation JourneyAn ISA Webinar

Presented by Richard Aldersea | Evolve [email protected]`

January 26th, 2018

© evolvesolutions llc 2017

What you’ll learn …

• Strategies for navigating barriers to growth

• The 8 critical levers to create value and how to prioritize them based on your firm’s size, goals and circumstances

• How buyers look at and perceive “value” in 2018 relative to value proposition, intellectual property, and other key areas.


Glass Ceilings …

Source: What Stops Consulting Firms from Smashing the Growth Glass Ceilings, Equiteq Ltd 2015


Some of the Biggest Mistakes in Growing a Firm

• Working IN not ON the business

• Innovation distractions

• Value negative diversifications

• Failing to professionalize the business

• Inadequate shareholder alignment

• Not knowing what you don’t know





• How buyers look at and perceive “value” in 2018 relative to value proposition, intellectual property, and other key areas.


All our growth work is based on the Equity Growth Wheel™

Market Proposition

IntellectualProperty

Quality ofFee Income

Sales &MarketingProcess

ConsultantLoyalty

ClientRelationships

Sales &Profit Growth

ManagementQuality

EquityGrowthWheel

Source: Equiteq Ltd 2015

© evolvesolutions llc

Strength of proposition & effectiveness in client sales, reasons why we win & lose

Market positioning, uniqueness & focus

Differentiation from and understanding of competition

The importance to value creation and future buyers:

Buyers are attracted by a focused set of propositions that deliver value into a clearly defined set of needs & hot issues. Such propositions are easily understood and more importantly drive up fee rates & volume

Key messages

•Firms with differentiated value propositions always survive best in difficult times

•Make sure you are part of the client business plan rather than just a cost line in their P&L

•Ensure your offer includes an ROI and, if practical, share in results

•Promote your expertise

7

Make sure you have a Differentiated Value Proposition that fits the current market environment

Market Proposition




ConsultantLoyalty

ClientRelationships


ManagementQuality

EquityGrowthWheel

Market Proposition lever is about:



Consistent, strong, profitable (EBITDA) growth

Day rates, Utilisation and Gross Margin

Organisation structure and leverage model

Contractors’ margins & usage


Strong predictable growth in Revenue, Gross Margin and EBITDA underpinned by well balanced structure with good day rates and utilisation are compelling and highly sought after.

EBITDA value and growth rate drives up the profit multiple, business value and attractiveness

Key Messages

•Drive GM to > 50%

•Drive EBIT to > 20%

•Aim for > 20% pa organic growth

•Manage cash so that growth isn’t constrained

•Ensure predictability

8

Growing or maintaining profit is crucial to both survival and revenue growth

Market Proposition




ConsultantLoyalty

ClientRelationships


ManagementQuality

EquityGrowthWheel

Sales & Profit Growth lever is about:



Client base, buyer position, length of relationship and attrition

Client management & planning, assured quality of delivery with the resulting growth in revenue stream

Protecting corporate relationship assets with appropriate CRM tools and management strategies


A balanced portfolio of quality clients with relationships at a senior level, supported by documented managed account plans, showing growing revenue streams, is highly desirable. The corporate relationships, embedded in CRM, demonstrate a company asset which is managed and scalable.

Key Messages

•Long-term client relationships build equity and sales value

•Maintain those relationships at all times

•Invest in CRM and account management

•Aim to grow clients year-on-year

9

Invest in strategic client relationships

Market Proposition




ConsultantLoyalty

ClientRelationships


ManagementQuality

EquityGrowthWheel

Client Relationship lever is about:



Client and revenue concentration & revenue pareto, growth of client fees from existing & new clients

Duration of projects & contracts, visibility of forward workload, pipeline strength compared with budget

Invoice to cash lead-times and bad debt


A balanced portfolio of existing and new clients with long term contracts delivering predictable revenues, supported by good cash collection, give confidence to shareholders & investors

Key Messages

•Create ways to increase the predictability of leads, sales, profits and cash generation

•Invest in strategic clients and link your fees to client results

•Minimise dependency on any client or sector

•Manage cash collection

10

Ensure you reduce profit growth risk by increasing fee income predictability

Market Proposition




ConsultantLoyalty

ClientRelationships


ManagementQuality

EquityGrowthWheel

Quality of Fees lever is about:



The innovation process for client and internally used IP, codification, storage, location, retrieval & protection of IP assets

Creating competitive differentiation, barriers to entry and clear academic authentication of IP

Sharing, publicising and leveraging IP both internally and externally


The codification of insight, experience, benchmarks, methods and tools into leveragable assets creates clearly scalable knowledge & value

Key Messages

•IP is the difference between selling bodies and selling a service

•If clients see you as sub-contract staff you cannot command premium rates

•Develop IP that drives leverage and annuity relationships

•Make sure your IP is secure

•3 types of IP:

• Market your business

• Deliver your business

• Run your business

11

Intellectual Property (IP) supports high fee rates, profits and equity value

Market Proposition




ConsultantLoyalty

ClientRelationships


ManagementQuality

EquityGrowthWheel

Intellectual Property lever is about:



The method, process and spend on generating leads

The management, effectiveness and predictability of converting leads into billed revenue

Clarity of communication using strongly branded web and presentational materials delivering a proposition value message to target clients


Consistent, predictable & effective sales conversion into targeted client groups is at the core of any potential investor’s interest

Key Messages

•Sales and value growth will only happen if you make prospects aware of your value and are persuasive in winning business

•Focus your services where you have a ‘right to win’

•Proactively drive, measure and manage sales performance

12

Make sure your target audience is aware of your expertise and invest in lead generation and sales

Market Proposition




ConsultantLoyalty

ClientRelationships


ManagementQuality

EquityGrowthWheel

Sales & Marketing Process lever is about:



Employee recruitment, retention, performance management, personal development, training, compensation and equity participation

Staff work/life balance and attrition

Management of sub-contractors


Motivated employees who are clear about their role and purpose, perform well, with appropriate reward and recognition systems, represent a stable and reliable investment

Key Messages

•Maintaining the right quantity and quality of delivery resources is critical to growth

•Make sure you attract, develop and motivate the best quality staff

•Link all compensation to gross margin & profit growth

•Reduce risk through use of contract professionals

13

Proactively manage your delivery capacity and capability to generate profits and value

Market Proposition




ConsultantLoyalty

ClientRelationships


ManagementQuality

EquityGrowthWheel

Consultant Loyalty lever is about:



The experience, balance and capability of the leadership team

Ability of the team to develop a vision and strategy, then plan its execution

Manage effectively the firm’s resources in the execution of the plan and delivery of results in line with expectations


The quality, capability, depth and breadth of the management team are of paramount importance in the eyes of investors. The team is fundamental to building confidence to invest

Key Messages

•Financial investors say they invest in management teams first, firms second

•Be crystal clear on vision and strategy

•Delegate profit targets and manage performance

•Communicate results and empower all to improve

•Balance working ‘on’ and ‘in’ the business

14

Strong leadership and management is key to value growth

Market Proposition




ConsultantLoyalty

ClientRelationships


ManagementQuality

EquityGrowthWheel

Management Quality lever is about:






• How buyers of professional services look at and perceive “value” in 2018 relative to value proposition, intellectual property, and other key areas.

Source: AMCF – Thought Leadership: Cutting Through the Noise to Unlock ValueReproduced with kind permission The Bloom Group

Marketing Led vs. Sales Driven | The Importance of Marketing IP

• Reducing the perceived risk in hiring you

• Making you more "findable"

• Demonstrating expertise

• Enabling your inbound marketing to attract better qualified prospects

• Making your outbound marketing campaigns more effective

Confidential© Catapult 2016 © Amplify Growth 2016 catapultgrowth.com

Navigating the Value Creation JourneyAn ISA Webinar

Presented by Richard Aldersea | Evolve [email protected]`

Navigating the Value Creation Journey

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