Insight: Play to the company’s strengths
When a company sets a new course, its greatest priorities should be a long-term strategic plan and total commitment to the new direction, said Patrick Latour, senior vice-president of financing and consulting for the Business Development Bank of Canada in the Prairies and Western Canada.
Evans Consoles, a world leader in the design and manufacture of control room consoles used by such operations as air traffic control and 911 centres, found itself ready to take a new path when Greg Smith and his business partner Bill Burkett bought controlling interest in the company in 2008. Their goal was to expand the company, already established in the U.S. market, and make it a global player.
For any company wanting to make this kind of dramatic change, the starting point is to “play to the company’s strengths,” Mr. Latour said. Ensure a good management team is in place ready to work toward the same goals.
“The right professional advisers are also part of the solution in moving through the steps,” he said, as the leadership makes decisions about entering new markets in Canada or abroad, alone or in partnership. Entrepreneurs are risk-takers by nature, he said, and input from financial institutions can be invaluable when calculating the risk associated with any new moves.
It is important to do solid research before proceeding with any directional change or expansion. And when the decision to change is made, the company needs to dedicate sufficient resources to the new strategy. “You need to invest in equipment, capital, technology and people,” he said.
“One pitfall we see is if entrepreneurs are not fully committed, they tend to invest too little in money, time or people,” Mr. Latour adds. “When you have made a decision to go, you must go wholeheartedly. Even with the current uncertainty in the world, this is a great time to invest in your business and increase your competitiveness. If you don’t, your competitors likely will.”
In the case of Evans Consoles, by going private in a management buyout, the company had the opportunity to “optimize business function and look for new sales opportunities, he said.
“[In cases like these], by controlling the ship themselves, the leadership can create more opportunities for the company. It is a matter of knowing your strengths, prioritizing the steps to be taken, having a clear line of sight that everyone in the company understands and committing to the direction.”