The Actio Advantage: Driving Predictable Company Growth through Strategic Execution

The pillars of success behind Valesco’s proven Actio performance program

Businesses choose to work with private equity partners for many reasons, including expert guidance, capital infusion, and legacy-building. Organizations and their value-added partners also establish shared goals for business expansion and operational excellence. Achieving these objectives requires careful planning, focus, and most of all, an understanding of what good looks like.

In this blog post, we take a closer look at three pillars of Valesco’s Actio performance program, and explain how these complementary elements work together to drive predictable company growth. We also review some intangible keys to success and quantifiable results that reveal what is possible through the Actio advantage.

Creating a winning formula

If it is true that there is no foolproof formula for growth and prosperity, it is also true that you gain experience and lessons learned through success. This basic premise lies behind Valesco’s Actio performance program to guide partner organizations toward sustainable growth.

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

Thirty years of experience building company value and operational excellence has provided Valesco with plenty of lessons learned, with the Actio program standardizing a set of processes, tools, and metrics. The program augments the instinct and intuition that guides many emerging organizations as they carve out their niche and build a reputation. To create a unified vision and establish tangible goals, the program focuses on high-impact areas that include:

• Demand generation
• Team development
• Finance and accounting
• System improvement
• Growth investment
• Operational efficiency

Reviewing performance from multiple perspectives makes it easier to prioritize initiatives, identify gaps and misalignments in talent, tools, or systems, and establish a controlled growth strategy. This repeatable process includes three distinct elements that continually intersect as each organization moves closer to their growth targets.

1. A Value Blueprint plots the course

The Value Blueprint exercise is the first important step, with 36 high-impact areas evaluated and graded on a numeric scale to baseline current financial performance, operational health, and leadership characteristics, and discover the areas most in need of improvement. This exercise makes it possible to track improvement over time and create company initiatives that align with the unified vision.

The Value Blueprint is likely to identify a long list of potential opportunities, as well as inherent company strengths that must be maintained. To simplify the process and channel resources effectively, a maximum of 3-5 key initiatives are usually selected for immediate action. Typical growth strategy initiatives might include:

• Driving demand through a targeted and measurable digital marketing strategy
• Increasing operational efficiencies by implementing processes and procedures that drive accountability
• Identifying and prioritizing key investment plans (e.g., acquisition targets, expansion opportunities, or investments in infrastructure)

Accountability and collaboration are required to ensure the improvement opportunities are converted into concrete action plans with measurable outcomes. While some initiatives may be limited to a single department, others require cross-functional support from multiple stakeholders, with each team fully aware of their responsibilities.

2. Aligning goals, talent, and business objectives

Even the best laid plans are limited by the talent available to execute critical agenda initiatives. That is why talent alignment is so fundamental to the Actio performance program. The alignment process involves putting the right person in the right seat consistently to ensure each employee has the ability, energy, and capacity to perform at a high level. The Value Blueprint exercise helps to identify personnel gaps or deficiencies in key positions.

Understanding individual goals and aspirations is essential for retaining valuable employees and recruiting talented executives to fill key positions, but the Actio program takes talent alignment a step further. In addition to finding the right role for each employee and creating growth pathways through training and mentorship, talent alignment becomes three-dimensional when the key initiatives of the business are factored in. In this way, the achievements of top performers directly contribute to company growth, allowing employees and the organization to achieve their goals simultaneously.

3. Optimized tools and systems complete the picture

Providing employees with the tools and systems needed to do their jobs effectively is another important consideration. Companies that have experienced success and profitability with outdated sales, enterprise resource planning (ERP), customer relationship management (CRM), or accounting tools may not be aware of the shortcomings, since they have established their systems based on the tools at their disposal.

The Actio performance program includes a comprehensive review of tools and systems to determine where changes are necessary to ensure scalability and optimize employee utilization. While many organizations focus on manufacturing and logistics as they look for ways to automate processes and minimize errors, improved tools and systems can impact almost any aspect of business operations, including:

• Advanced financial software to assist with reporting, forecasting, and auditing tasks
• Sales training processes to standardize call scripts, KPIs, and lead tracking
• Supply chain management software to support supplier qualification and quality monitoring activities

Beginning with the end in mind

Value-added partners like Valesco already understand what good looks like, which makes their active participation essential as the seeds of change begin to bear fruit. Rather than providing a set of pre-packaged activities, the program encourages self-reflection and discovery processes that are unique for each organization.

The financial backing of a private equity partner is important, but the power of the portfolio also provides access to industry expertise, connections, and organized best practice sharing to accelerate decision-making and overcome roadblocks along the path to success.

The Actio advantage brings tangible results

Results obtained through Valesco’s Actio program have been remarkable, with average revenue growth of 54%, and an EBITDA increase of 51% from investment to exit. The tailored approach allows each business to develop a growth strategy that aligns with their strengths and aspirations. While some choose to bolster management teams with key hires, others set their sights on acquisitions or ambitious system overhauls. As the largest operational team in the lower mid-market, Valesco has developed repeatable processes to maximize growth and minimize risk for all business types.

Drug Free Sport (DFS) in Kansas City, MO is among the companies providing evidence of the Actio advantage at work. DFS had already established a successful brand in the professional sports drug testing industry when the CEO sought out Valesco for a majority investment in 2017. By the time the exit was completed seven years later, the company had grown their revenue by 138%, increased employment by 181%, and completed the add-on acquisition of IDTM in Stockholm, Sweden. Like other organizations that have experienced the Actio advantage, DFS found that their expectations had been exceeded by leaps and bounds.

Conclusion

Growth and long-term success in competitive markets is rarely accidental. The Actio performance program distills the most essential elements of what good looks like into standardized practices any business can leverage. Patience is also a key component, since the Value Blueprint exercise provides a roadmap that may take years to fully execute. Beginning with the end in mind gives Valesco the confidence to support partner organizations as they optimize their teams, tools, and systems to reach their ambitious goals. With the power of the portfolio providing the wind at their backs, the Actio advantage is helping these companies to exceed expectations.