The final article in a series based on the National Center for the Middle Market’s in-depth research report, The DNA of Middle Market Growth: The Three Types of Growth Champions and the Factors that Drive Their Success, this post highlights the unique growth model deployed by Efficiency Experts.
An in-depth analysis of the growth experienced by 20,000 middle market businesses shows that, in many cases, reaching new customers and selling more to them is the surest way to grow. But it’s not the only way to realize success. Indeed, we uncovered a segment of fast-growing businesses that build their bottom lines primarily by means of a formal growth strategy: one that strongly emphasizes cost efficiencies. For these companies, which collectively post a year-over-year annual growth rate of 7.4%, outperforming their peers on the blocking and tackling of business has led to notable success.
Efficiency Experts put business growth strategies on paper.
For this group, a formal growth strategy accounts for almost a quarter of the growth model, making that strategy nearly twice as important to these businesses as it is to other types of growers. They set multi-year and annul growth targets, and they track progress toward those goals. They are also likely to communicate growth targets to all levels of the business.
For Efficiency Experts, doing more with the resources they have starts at the top.
Efficiency is about maximizing the useful work produced by your resources. Efficiency Experts are masters at this, and they lead by example, employing and maintaining high-performance management teams. They say they do well at attracting top managerial talent, and they are also committed to keeping their top team members up to date with the latest management techniques.
These efforts often create a top-down effect, raising the standard for employees at all levels of the organization and creating a high performance business culture where contributing at a higher level is embraced by one and all. Signature Consultants®, a top IT staffing firm and one of the Efficiency Experts we talked to, offers the ideal example. The company’s leaders tell us they’ve created a high performance culture where every employee is actively enlisted in the business’ profitability. The work staff members do directly impacts growth, and company growth dictates each department’s budget. So, by doing what’s right and profitable for the organization, employees also influence the depth and breadth of their own opportunities. Thus, they are highly motivated to achieve more.
Developing people internally is more important than finding people with the right skills for Efficiency Experts.
In keeping with their commitment to getting the most out of the resources they have, Efficiency Experts place more emphasis on staff development than other types of growers. Perhaps as a result, they claim that talent management is less of a challenge than their peers: Instead of searching for people with the right skills, they find it much easier (and more efficient) to grow them in house. Efficiency Experts also boast of a highly productive workforce. These companies not only invest in training and education, they are also good at providing career pathing for their people, which likely helps to keep the best talent on board long-term and may contribute to the high performance of the management team.
Efficiency and formalization of growth strategy may come with age.
Of all the types of growers we studied, Efficiency Experts are the oldest. They have an average age of 45.1 years. Just a quarter of Efficiency Experts are 20 years old or younger. These companies likely learn as they grow, identifying and perfecting the strategies that drive the greatest output from each resource.
See the Efficiency Expert’s full growth model.
For more details on how Efficiency Experts grow their revenues, and to explore the other types of middle market Growth Champions, download the Center’s full research report, The DNA of Middle Market Growth: The Three Types of Growth Champions and the Factors that Drive Their Success