Advice for CEOs

Doug Tatum, Chairman of Newport Board Group, will be a featured speaker at an important event for entrepreneurs from 12:30-5pm EST on November 12th at Blair Conference Center at 9079 S. Leroy Road in Westfield Center, OH. The event is co-sponsored by Westfield Bank and Dorman Legacy Advisors.

In earlier blog articles I have looked at issues confronting earlier stage and middle market companies as they traverse what Doug Tatum, our firm’s Chairman, called in his book of the same name: “No Man’s Land.” This is the phase of corporate evolution in which companies are too big to be small and too small to be big.

In earlier articles, I discussed issues confronting early stage and middle market companies. This was in relation to Markets and Model, two of the Four Ms in Newport Board Group’s framework to help companies navigate through No Man’s Land.

In Part 1 of my No Man’s Land “4 Ms” article, I described how changing the model of certain aspects of your business can help accelerate growth. I cited the example of a Texas-based entertainment lighting firm who updated their business model and found success. Please find the conclusion of the firm’s story below.

Doug Tatum’s best-selling business book No Man’s Land explores the misalignments that occur as companies attempt to traverse No Man’s Land, the place where middle market companies falter because they are too big to be small and too small to be big.

In the previous installment of this article, I explained an important aspect of what happens to companies in No Man’s Land: profitability erodes as the company grows. Operating Leverage is a key indicator you can use to predict when you are entering or exiting No Man’s Land. It is a simple diagnostic tool that highlights whether the fundamentals of your business are eroding or improving.