A free monthly newsletter on growth, market expansion and profit

Vol 1 No. 6

July 2014

In This Issue

Watch Out: Merging Traffic

Thought From James

The Profitable Growth Race

 

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Catalyst for Action

A sequence of videos providing insight, tips and techniques to dramatically raise individual and organisational performance

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Unprecedented Business Growth Podcast Series


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Welcome to the latest The Race For High Growth Newsletter. Our mission is to help you make wise decisions about identifying and quickly instigating profitable investments in high growth markets and to build a prosperous business. The format is set up to enable you to rapidly apply and adjust the ideas to your own business. As I encourage all my clients, we learn best by doing, not over-thinking a concept or excessive procrastination. Feel free to ask questions and I will happily answer them if your reference TRFHG.

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http://twitter.com/JamesBerkeley

Each week you will find 5-6 pieces of advice for profitable growth personally and professionally. Join the thousands who read these "quick hits" every morning.

Watch Out: Merging Traffic

Driving down a three lane highway, only to be met with flashing signs telling us the road will shortly be reduced to two lanes, forces us to think (1) how do we position ourselves best to keep travelling at optimal speed and (2) how do we avoid endangering ourselves in switching lanes. In business, there aren't formal distance markers or sign posts, we are paid to make our own assumptions, apply good judgement and take action to achieve the right results (AJAR). It necessitates that we run a business with one eye on the horizon and the other eye on the speed and direction we are travelling.

Today many businesses and indeed, many industry sectors are faced with navigating rapidly and safely through converging lanes. The reinsurance business has converging capital providers (capital markets and traditional reinsurance companies). The hospitality business has converging sales approaches (online travel agents encroaching on the terrain of traditional travel agents and hotels' direct booking channels). The gaming business has converging distribution (players can play in "bricks and mortar" casinos, online, mobile and social gaming).

Convergence is accelerated by new competition, new technology, access to new sources of capital and so on. It is epicentre is in the key strategic area that defines your organisation. Acclaimed strategy consultant, Alan Weiss, wrote about this in his seminal work, Best Laid Plans.

  1. Products/services offered
  2. Customer/Client groups served
  3. Markets served
  4. Technology
  5. Production capability
  6. Natural resources
  7. Method of sale
  8. Method of Distribution
  9. Size/Growth
  10. Return/Profit

In an insurance company the "bottleneck" arises in the risk transfer products or risk management services offered. In the hospitality business, it arises in the method of sale. In the gaming business, it arises in the method of distribution. Frustration builds or recedes with the power and influence that businesses and their top managers have to navigate around those convergence points.

The "fear" is getting stuck in the middle lane with no option to move left or right but to slow down and allows others to move first without getting hit or totally losing your patience.

It demands that top management are not only thinking but most importantly, acting strategically.

  1. What are the most powerful forces shaping the future market needs for our products, services and relationships? (globalisation, regulation, demographics, technology, access to capital, media, economies and so on)
  2. What are the market needs we can see (or create) in the next 12, 24 or 36 months?
  3. What must we do to develop and demonstrate our firm's capability to meet those needs?
  4. What must we be passionate about doing in order to create a successful linkage in that process?
  5. What are the risks and rewards with the journey between the status quo and our desired future state?
  6. Where must accountability reside within the business to make sure that what we know we must do actually happens in practice along that journey?

My observation is that with the answers to those six questions, any business in any sector can readily keep moving forward at optimal speed and minimum danger. Convergence actually springs opportunity to leap ahead of the competition for those managers and organisations, who are not dozing at the wheel (Emirates, FedEx and Apple).

That of course, assumes that top management has the skills and volition to be honest with themselves, to consistently ask the right questions, to look beyond the firm's daily or quarterly trading results, to demand accountability from their subordinates, and where necessary, to seek external help.

If you take a look at the Top 10 firms in your sector in 1984 and look where those businesses are in 2014, you will realise how few managers and firms successfully manage their business through critical convergence points. A handful are still steaming along in the fast lane, many are disappearing in the rear view mirror, and for the majority have been forced to abandon their journey long ago.

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Thought From James

Throughout our careers there are converging market needs, which force us to re-invent or re-cast our own value to our customers, shareholders, fellow employees and other communities we serve. Some of us seem to evolve with little or no disruption, and others resemble the blackjack player, enjoying a good run for a solid few years with an employer and then hitting a dry patch. The consequences can be an onset of increasing boredom in a job, actually being made redundant and extended periods out of work. Yet we have greater influence over the situation than many of us in the corporate world imagine. My observation is that it largely stems from our ability to maintain a high-level of self esteem, to be aware of changing market needs, our desire to acquire new skills and to voluntarily challenge ourselves to apply them without fear of failure.

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The Profitable Growth Race

"Anyone watching keenly the stealthy convergence of human lots, sees a slow preparation of effects from one life on another, which tells like a calculated irony on the indifference or the frozen stare with which we look at our unintroduced neighbour." — Middlemarch

Who are the winners or what I term the "GEMS", in today's converging markets? My job here is to point you towards organisations, whether you are looking to sell to these businesses, partner with them or even work within these firms, who I think will benefit from convergence and thrive. My focus is on sectors I follow consistently. My time horizon is short because nobody can reasonably predict what will happen beyond 36 months from now, at best.

Hospitality: Marriott, CTS Hotels, airbnb
Gaming: Caesars Interactive Entertainment, IGT, Betfair
Professional Services: Salesforce, Tricor, Huntswood
Financial Services: Cambridge Associates,
Re/Insurance: Berkshire Hathaway, Guy Carpenter, Prudential
Private Equity Firms: Blackstone, KKR, Lion Capital
Healthcare: Fortis Healthcare, Medtronic, Airtel Health
Education: Donorschoose.org, Knewton, Pearson
Luxury Retail: Brand Alley, Kering, Ralph Lauren

If you like this look out for a new offering I am announcing this month on my website, blog and mailings. A weekly research list of "GEMS" businesses and incisive analysis that I confidently predict will out-perform their superiors, based on the quality of management, quality of employees, the amount of uncertainty and competitive threat.

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