Executive Summaries

Executive summaries from our faculty and fellows on research reports and white papers.

  • Organizing for Innovation: Where Middle Market Companies Should Place Their Chips in the Great Game of Innovation

    Management writers who study innovation tend to focus on how companies get the most from individuals and from teams. Such insights are valuable but don't address the larger picture: the innovation infrastructure. Yes, companies want employees and teams to be prolific creators. But where in the organization do these creators reside? Who funds their activities? Who chooses among projects? What are companies' overarching innovation goals?  Read More >

  • Strategies for International Joint Ventures: How to Choose the Right Partner

    With growth slower in the U.S. than in emerging economies and international competitors staking out domestic turf, globalization is rapidly becoming imperative for U.S. businesses. Last year, 82% of Middle Market companies expected more than 20% of their sales growth would come from foreign markets, according to a survey by the National Center for the Middle Market. Furthermore, the U.S. government will be hard-pressed to achieve its goal of doubling exports within five years without the active participation of such firms.  Read More >

  • Multi-Channel Distribution Channel Strategies: Exploiting Direct and Indirect Sales without Channel Friction

    More than 25% of Middle Market companies identify customer acquisition through new channels and markets as their number one source of growth, according to research by the National Center for the Middle Market. With 31% of these businesses involved in manufacturing or wholesale, there exist excellent opportunities to reach new customers through direct sales over the Internet. For consumer-products companies, however, this creates channel friction, as suppliers increasingly compete with their wholesale customers to get everything from ice cream to televisions into the hands of consumers. As boundaries blur between vertical suppliers and horizontal competitors, companies are forced to reevaluate their channel strategies.  Read More >

  • R&D and Manufacturing: Where do they belong in your organization?

    A 2011 survey of Middle Market executives by the National Center for the Middle Market singled out two major challenges: Large corporations achieve better performance when they separate R&D from manufacturing by, for example, using different employees and metrics in the two functions. In contrast, small entrepreneurial firms often have no choice but to house the two functions together, a model that research has indicated benefits them financially.  Read More >

  • Executive Summary: Q3 2013 Middle Market Indicator

    U.S. middle market companies extended their string of solid revenue and employment gains during the third quarter of 2013 and anticipate those trends will continue over the next 12 months, albeit at a decelerating pace. Though markedly improved from the same period a year earlier, revenue increases, employment gains and confidence in the global and local economy all appear to have hit plateaus.  Read More >

  • Informal HR: Building a Smart Workforce on a Tiny Training Budget

    Talent development is critical for growth. Of the top-performing Middle Market companies, 29% emphasize employee training and education compared with 17% of slower-growth firms, according to the NCMM's "Market that Moves America" study. But while companies recognize the importance of developing their employees, close to three-quarters acknowledge difficulty doing so. One problem is cost. The NCMM's Q2 2013 Middle Market Indicator Report shows that only 6% of Middle Market companies would invest an extra dollar in formal training and development programs. In addition, such programs are often too static for firms in dynamic business environments.  Read More >

  • Executive Compensation: Benchmarking Middle Market CEO Pay

    Much has been discussed about the compensation of Fortune 500 CEOs. However, far less is known about executive pay packages at Middle Market companies, many of which remain private and are not required to report that information. Lack of benchmarking data complicates decision-making for the boards of such firms, which compete with large corporations for top talent. As for Middle Market CEOs, many have spent large swaths of their careers - in some cases their entire professional lives - at one firm. Consequently, they have little idea how their compensation stacks up against counterparts in comparably sized and larger companies.  Read More >

  • The Resilient Supply Chain: Competing on the Ability to Come Back from Disaster

    Supply chains are becoming more complex and interconnected just as economic, environmental, political, and technology-related shocks grow more frequent. Research indicates that a majority of companies will face a crisis every four to five years, and of those that do almost 75% will close or suffer a significant long-term impact. The ability of any firm to prosper may depend on how well its managers are prepared to face these challenges.  Read More >

  • Non-bank Financing for Middle Market Firms

    While many forms of financial activity have bounced back from the 2008-09 financial crisis, bank lending to middle market companies remains constrained. A 2012 National Center for the Middle Market (NCMM) survey found that 54 percent of middle market companies said one of their key challenges was gaining access to financing. And as banks face tightening regulations, from Dodd-Frank to Basel III, prospects for opening the lending spigots seem limited. As a result middle market companies need to pay close attention to the availability of financing available from non-bank sources. There are, in fact, a substantial number of institutions that provide funds to middle market companies.  Read More >

  • Managing from the Middle: How to Improve Customer and Supplier Relationships through Supply Chain Integration

    Middle-market companies often lack the resources and bargaining power to influence terms and relationships within their supply chains. Big customers may pressure suppliers to keep large amounts of inventory on hand, which imposes profit-eroding carrying costs. For their part, large suppliers trying to stay lean may take longer to fill mid-sized companies' orders or require those firms to buy more than they need. Middle-market firms report feeling squeezed.  Read More >

  • Rethinking Competitive Advantage: Why Mid-Sized Businesses may have the Advantage

    Competitive advantage is the basis of the superior performance of a firm relative to its competitors. Over the last twenty years or so, the most popular explanation of competitive advantage has been based on the notion that the firm possesses something special in the form of superior resources and capabilities. In other words, firms that possess superior resources and capabilities would have a competitive advantage over their rivals in a given market, and hence they would show extraordinary profits and performance. Fellows of the NCMM, Anand and Lu, challenge this simplistic notion on the grounds that it is difficult to know which firms actually possess superior resources and capabilities until after the evidence of competitive advantage and superior performance is already in.  Read More >

  • A New Case for Acquisitions: Target Firms that Benefit from Financial Synergy

    Middle market interest in mergers and acquisitions is stronger than in recent years, with close to 40% of mid-sized companies at least open to - if not actively seeking - suitors. But, which target to go after? Frequently, the recommendation is to pair up with a target such that the combination will produce operational synergies, whether it is the elimination of redundant costs or new growth through the pooling of their joint capabilities. But, what about financial synergy? Could not a well-endowed acquirer benefit a resource-constrained target, which might otherwise pass on profitable investments? Helping the target to fund these profitable investments could create value for the mutual benefit of the acquirer and target. Therein lies a new recommendation for seeking a target, particularly in the days ahead when surely the Fed's stimulus will end and capital will be harder to obtain.  Read More >

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