Unique business perspectives become valuable shared assets
The “power of the portfolio” means different things to different people, but most investors associate this term with diversification and risk management fundamentals that keep them from putting all their eggs in one basket. The power of the portfolio takes on new meaning when affiliated organizations leverage their combined knowledge and management experience for the benefit of all.
In this blog post, we review Valesco’s vision to bring like-minded leaders and stakeholders together as a catalyst for standardization and problem-solving. These collaborative forums are woven into the innovative Actio performance program that consistently guides partner organizations toward predictable and sustainable growth.
A blueprint for success
The Actio performance program was established based on 30 years of experience and demonstrated success in building company value and operational excellence. The program utilizes a set of standardized tools, processes, and metrics. While the core processes may be common, the culture, leadership, and history of each company ensure each new application of the Actio approach is unique and enlightening.
Valesco’s proprietary Value Blueprint is the first step, with high-impact areas ranging from market position and financial performance to social awareness and team development evaluated and graded on a numeric scale to baseline current performance and identify key opportunities for improvement. The blueprint highlights important gaps in systems, practices, and talent alignment while helping to create a unified vision to be shared and embraced by all employees. Most importantly, this common vision must be internalized and embodied by the C-suite with a top-down approach to change management.
CEOs meet their match
The Actio program utilizes the Value Blueprint as a roadmap to optimize growth and performance, along with a talent alignment process to put the right person in the right seat. This alignment must also start at the top, as CEOs and people managers synchronize their goals and aspirations with those of the overall business, then filter the approach throughout the organization.
The role of the CEO as a catalyst for success in the Actio program was a driving factor in the establishment of the live roundtable format. These forums bring top executives from Valesco partner organizations together to discuss the unique challenges they face, and share the secrets of their success. The benefits of CEO roundtables also include:
- Firsthand exposure to original thought leadership content
- Vetting of business strategies and proposals without fear of disclosure
- Deep dives into relevant topics, including industry trends, culture development, and talent retention
In general, the CEO roundtable provides an opportunity for business leaders to step outside the box as they collaborate and learn from peers sharing common experiences. The focused and organized setting helps to amplify key Actio principles.
CFOs follow suit
Positive responses to the CEO roundtable provided the impetus to create new forums for other categories of business leaders, such as chief operating officers (COOs) and chief financial officers (CFOs). These roundtables provide similar benefits while incorporating a more tactical focus, with issues like ERP implementation, financial reporting, audit preparation, lean principles, and automation taking center stage.
Implementation of the Actio performance program with multiple companies has given Valesco valuable insights that help to identify the ideal tools, systems, and skills required for each unique situation. The CFO forum is led by the Valesco CFO, which creates an opportunity to share and discuss lessons learned from past and present Actio participants.
Expanding the roundtable
Collaboration platforms augment the Actio advantage by providing an organic forum for best practice sharing and discovery that allows key stakeholders to establish relationships with their peers and brainstorm solutions. This successful formula holds enormous potential for additional applications such as:
- Sales and marketing teams working to reach their target audience and establish appropriate metrics and KPIs.
- Operations leaders establishing lean processes to maximize their capacity.
- Supply chain teams working to overcome rising costs, streamline delivery schedules, and leverage economies of scale.
Live participation, small-group breakout sessions, and thought leadership are among the elements that ensure these forums add value for each participant and deepen each party’s understanding of their own unique challenges. The power of the portfolio also avails solutions when kindred organizations have experienced the same growing pains.
Collaboration as a tool for growth and performance
When conglomerates expand their portfolios by acquiring new subsidiaries, each new entity strengthens the larger organization by spreading financial risk and filling gaps in technology, brand recognition, or market penetration. While the synergy between the partner organizations of private equity firms is not always intentional, it can also become a valuable resource when collaboration between leaders and stakeholders leads to:
- Networking opportunities to forge long-term relationships
- Sharing of resources and information to expedite problem-solving
- Education of employees on new practices they would not otherwise be exposed to
Collaboration also allows businesses at various stages of development to learn by example and model the expansion paths that have been successful for others. The Actio performance program provides a backdrop for discussion topics and growth objectives shared by all organizations.
Measuring the power of the portfolio
The power of the portfolio can be measured in new contacts, ideas, and ready-made solutions, but it can also be quantified through the growing list of success stories that include collaborative leadership forums as part of the Actio performance program. Principal LED, a leading provider of electronic components in North America, grew their sales by 396% during the hold period, while completing four add-on acquisitions to expand their territory. Each of these transactions also became an opportunity for knowledge and efficiency growth through the sharing of ideas, operational best practices, and marketing strategies.
T-H Marine is another noteworthy success story, demonstrating the effectiveness of the Actio program as they transformed from a family-owned and operated business into a recognized market leader in the boating and fishing industry. 150% sales growth and a 175% increase in EBITDA were accompanied by key executive hiring, mentoring, and best practice sharing activities that exemplified the power of the portfolio at work.
Conclusion
The power of the portfolio goes well beyond economies of scale and market penetration when diverse ideas, problem-solving techniques, and business best practices are shared and improved through collaboration. The Actio performance program utilizes baselining and talent alignment to build a foundation for growth and success. CEO and CFO roundtables complement and accelerate the process by providing forums for peer-to-peer discussion and brainstorming. These valuable meetings also allow executives to validate their own decisions while learning from the trials and experiences of others. These practices continue to produce quantifiable results as the culture and vision of each organization evolve.