Advice for CEOs

Spotting industry and technology trends and market shifts is key to entrepreneurial success. Changing market dynamics have a constant (if often hard to see) impact on the attractiveness of an emerging growth company’s products and services. Critical determinants of a company’s success-- such as its buying power with its suppliers and its pricing power with its customers-- are also changing all the time. Capital-strapped companies need to define their best approach to understanding the markets in which they compete — so as to optimize their chances to be the disrupter not the disrupted.

Risk is part of the essence of business. It can be defined as everything that would prevent or interfere with the positive outcomes that entrepreneurs, investors and executives seek. Risk management is the way that companies identify, assess, mitigate, transfer (typically via insurance) and manage risks to their business. Only after risks have been identified can resources be allocated to try to minimize them.

The emerging growth and middle market companies our firm serves are typically U.S. companies that initially see their opportunity in domestic markets and customers. As they prove themselves and grow, many come to see compelling opportunities in global markets—but they also see risks in trying to penetrate markets abroad and aren’t sure what approach to take. We asked some of our partners about situations they’ve seen in which companies miss out on opportunities for international expansion. What holds these companies back? Their responses are below.

Talented, committed employees, motivated by the upside they see for themselves in their employer’s success, are the best source of a company’s competitive advantage. But CEOs of emerging growth and middle market companies must face the reality that their workforce is changing rapidly. Workers and employers don’t expect jobs to last as long as they did in earlier generations. Companies can opt for alternatives to permanent employment, such as outsourcing work to an external service provider, deploying short-term contractors or using the services of a professional employer organization (PEO). Talented millennials and other younger workers bring an independent attitude and (often) a freelancer mentality. The internet has transformed recruiting and made it possible for even small firms to tap workers located on the other side of the globe.

Kinky Boots, the currently touring popular Broadway musical, is based on a true story. When I saw it recently, I was not only entertained by an engaging, heartwarming story. I was also struck by an uncanny parallel to the real world of middle market companies that the firm I am part of, Newport Board Group, is involved in every day.

At first glance, what could be more different than General Motors and the emerging growth and lower middle market companies that our firm, Newport Board Group, serves?