Move guide
Start delivering the growth
Your report suggested a move on at least one of these three questions:
- whether there is a next engine of growth a buyer will pay for;
- whether you have started delivering against your growth initiatives;
- whether you have started proving the key parts of your story.
This move guide picks one growth engine and pilots it with measured results. Then it starts the lead initiatives early enough for two quarters of results to show before a sale.
1. When it applies
Use this move guide if your report placed any of these questions at "Red flag" or "Doubtful".
| Question | Where it may sit today | Where this move guide aims |
|---|---|---|
| Is there a next engine of growth and EBITDA upside a buyer will pay for? | Red flag: "Growth has stopped, and the only upside is a buyer fixing our neglect: a discount, not a premium." Doubtful: "Growth ideas exist, none tested; the upside is verbal and nothing connects it to EBITDA." |
Supported: "The engine is piloted with measured results, and each bar of the EBITDA bridge has an initiative and evidence behind it." |
| Have we started delivering against them? | Red flag: "Nothing has started; every initiative begins after the sale." Doubtful: "Initiatives are “underway” with no measurable result yet." |
Supported: "The lead initiatives are delivering measured, attributable results in the run-rate." |
| Have we started proving out the key elements of our equity story? | Red flag: "The story rests on things we have never done: no record of setting a strategy and delivering it, no pilot of the growth we are selling." Doubtful: "We have a strategy on paper; delivery against it has never been measured, and the upside is untested." |
Supported: "A documented record of setting strategy and delivering against it, and the key growth levers piloted with measured results." |
If all three already sit at "Supported" or higher, skip this move guide.
Whether you have started delivering is a warning question on the seller check. A low answer on it moves the report's verdict toward "Slow down". Start early: results need time in the run-rate.
2. What to do
Four steps, over six to twelve months.
- Pick one growth engine. Pilot it this year, and measure the results. Table A below records it.
- Build the earnings bridge from today to full potential, with an initiative and evidence behind every bar.
- Start the lead initiatives now. Measure what each adds to the run-rate for at least two quarters.
- Write down the record of setting strategy and delivering it, year by year.
3. What to produce
One table.
Table A. The growth engine pilot
| The engine | Where it was piloted | What was measured | Result so far | Its bar in the earnings bridge ($) | Owner (name) |
|---|---|---|---|---|---|
An engine with nothing in the fourth column is still an idea.
4. A worked example
Illustrative. Written for this move guide. It describes no client.
A regional chain of physiotherapy clinics wants to sell in two years.
The engine.
- Its growth idea was contracts with large employers for staff injury care. It piloted the idea with two employers in one city.
- After six months, the two contracts filled the clinics' quiet morning sessions. Revenue per clinic rose at the pilot sites.
The bridge and the record.
- The earnings bridge now had a bar for employer contracts, backed by the pilot's numbers.
- The owners wrote down five years of plans against results, including two years they missed.
Two quarters on.
- 1 growth engine piloted, with measured results
- 2 quarters of results in the run-rate
- 5 years of plans set against results
On a retake, all three questions could be answered at "Supported".
What it looked like in our work
From our own work. Figures changed.
For a business software vendor preparing a sale, our due diligence checked whether its growth engine was already running. The engine let its product connect to many more of the systems customers used. We measured how many new customers came from those systems.
The engine was already winning customers, and the numbers showed it. A buyer pays for growth like that.
5. Effort and dependencies
- Chief executivePicks the engine and owns the record of plans against results.
- Initiative ownersEach runs one pilot or initiative and measures it.
- Chief financial officerPuts each result in the run-rate and the bridge.
What you need
- The initiative list from building the plan from the record.
- A way to measure each initiative's results on its own.
How long
- Six to twelve months. Results need two quarters in the run-rate before a sale.
What gets in the way. We have seen this in our own work:
- Launches that did not last. For a branded food maker, part of the forecast growth was new products for a shrinking segment. Most launches there were withdrawn within the year.
6. How will you know it worked?
The test is whether a buyer can see the engine's results in your run-rate. Retake the check after two quarters of results. Each of these should be true when you answer:
| Question | You can answer Supported when | A document alone does not count if |
|---|---|---|
| Whether there is a next engine of growth | The engine is piloted with measured results, and each bar of the earnings bridge has an initiative and evidence behind it. | The engine is a slide with no pilot. |
| Whether you have started delivering | The lead initiatives show measured, attributable results in the run-rate. | The initiatives started this month. |
| Whether you have started proving the story | There is a written record of setting strategy and delivering it, and the main growth levers are piloted. | The record shows only the good years. |
The worked example is illustrative.
Think we've used your work without proper credit? Tell us and we'll fix it.