Implementing the Value Blueprint: A Strategic Approach to Unified Business Vision

Value-added partners can help businesses amplify their strengths

Many successful companies make a conscious decision to grow and excel by attracting private equity firms who seek to become value-added partners, rather than merely investors in the business. Helping companies establish a unified vision is one of the first and most important tasks these private equity partners take on as they chart a course towards long-term predictable growth and prosperity.

In this blog post, we describe a key element of Valesco’s Actio performance program–the Value Blueprint–and explain how this unique tool can set businesses on the right course as they develop their unified vision and strategy.

What is the Value Blueprint?

Valesco’s proprietary Value Blueprint is a scoring tool developed to baseline the current operations of a business, evaluating market position, financial performance and management, operational status, sales infrastructure, and leadership characteristics. Distilling the current state of the business into a numerical score makes it easier to identify opportunities for improvement and track progress as development activities are defined and executed.

Strategic decisions are made with the high-level goals and values of the organization in mind. To that end, identifying 3-5 key initiatives is a useful strategy for focusing energy and resources on high-impact areas. These initiatives typically fall into one of three primary categories:

• Execution: It is easier to reach the next level with a highly competent and energized team in place. Execution initiatives build the skills and competencies needed to make lasting changes.
• Process: Growth tactics often call for a revamped set of software tools or foundational systems to unlock business potential and enhance efficiency.
• Performance: Identified opportunities can be an accelerant for the positive traits that have already made the business successful. Improving performance in targeted areas helps build an enduring legacy.

The Value Blueprint creates a unified vision with clear goals that enable a business to establish metrics and track their progress in all financial and operational areas. In this way, changes can be measured over time and course corrections can be completed when necessary to maximize impact.

What does it mean to have a unified business vision?

A unified business vision is an important byproduct of the Value Blueprint, but what does this really mean? In essence, a unified vision is experienced when all employees from C-Level executives on down, as well as the PE partner, understand the goals and aspirations of the company and are continually working towards them. With everyone aligned on their responsibilities and priorities, a unified vision enhances communication, cooperation, and efficiencies between people and departments.

Sharing and propagating the vision throughout the organization is also essential. While signs, slogans, and emails can help to emphasize the key points, communicating the vision effectively also requires live one-on-one and group discussions to emphasize the “why” as well as the “what” and “how” behind the company mission and objectives. Visible leadership support and consistency in change management help to reinforce the importance of the vision over time.

The challenges in growing a successful business

Financial hurdles, family business pressures, work-life balance, supply chain issues, competition, and personnel problems are just a few of the obstacles that can keep business leaders from reaching their potential. At times, a clear vision of the future state can provide a solution for a litany of day-to-day challenges. In other words, what does success look like, and how do you get there?

Valesco’s Actio Value Blueprint helps businesses answer this important question by replacing conjecture and debate with a proven success formula agnostic to company culture, product, or industry. The Value Blueprint applies a consistent numeric grading scale to 36 high-impact criteria, such as:

• Earnings before interest, taxes, depreciation, and amortization (EBITDA) and historical growth, summarizing profitability and financial performance
• Product and service quality as assessed through customer feedback
• Stability and job fit in key leadership and individual contributor positions
• Highly developed system and operational efficiencies
• Effective sales and marketing strategies
• Commitments to diversity and social awareness initiatives

This process helps to identify the business strengths that must be preserved, along with the weaknesses that must be overcome to foster sustainable growth. An effective Value Blueprint also considers the importance of putting the right person in the right seat to enhance retention, morale, and productivity. Consistently reviewing metrics vs the original scores creates a virtuous cycle where quantifiable progress in a few key areas leads to improvement in others.

Actio Value Blueprints in action

Most companies realize it’s best not to go it alone when it comes to ensuring their future success. An experienced third-party can help lead the way, while sharing the risk. Value-added PE partners like Valesco leverage their expertise by deploying proprietary tools such as the Value Blueprint and bringing the fresh perspective and resources necessary to minimize bias, identify gaps, and optimize solutions.

                       Act · io: A Latin term meaning ‘action, execution, process & performance’

Valesco developed the Actio (Latin for ‘Action’) performance program based on 30 years of expertise driving operational excellence and company value. Applying this framework to portfolio companies has yielded quantifiable results, demonstrating the power of strategic growth initiatives guided by a methodical process and experienced team. With a track record of growing revenue by 54% and EBITDA by 51% from investment to exit, the Actio program is a proven model for predictable company growth.

Drug Free Sport case study

Drug Free Sport (DFS) is a provider of drug testing and compliance services for dozens of athletic organizations. The company works with professional and amateur sports leagues, including the NBA, NFL, PGA, and NCAA, to develop customized drug-testing solutions and drug prevention initiatives. When the CEO of DFS made the decision to sell the business, he selected Valesco to ensure the capital, support, and resources needed to carry on the successful legacy would be assured.

With a comprehensive Value Blueprint plotting their trajectory, DFS quickly grew their EBITDA by 114%, increased employment by 181%, and integrated a new ERP system to better suit the complex needs of the business. This analysis also pointed to international expansion as a key initiative, which led to the add-on acquisition of International Doping Tests & Management (IDTM) in Stockholm, Sweden.

T-H Marine case study

As a market leader in recreational marine, boating, and fishing products, T-H Marine Supplies grew from a small family business into a recognized and respected brand over the course of four decades. Seeking the next level of growth, a majority buyout by Valesco in 2019 provided the family with liquidity, while allowing them to remain engaged in strategic initiatives and day-to-day operations.

The Value Blueprint established by the T-H management team in conjunction with Valesco planted the seeds for unprecedented success over the ensuing years. Quantifiable improvements included sales growth of 150%, and aftermarket sales climbing from 30% to 55% of revenue. The company also completed three key executive and management hires.

Conclusion

Success and sustainable growth in competitive markets sometimes seems like the product of good ideas sprinkled with a fair share of luck and good timing, but this is not always the case. Valesco’s proprietary Value Blueprint is among the tools that consistently lead to positive outcomes when deployed correctly, regardless of the company history, challenges, or portfolio. Valesco leverages these proven tools and strategies to ensure ongoing growth and success for partner organizations as they begin the next leg of their journey. The Actio performance program has been designed to continually optimize these useful tools as part of an overall value-building system.