Market Driven Agenda Management: Focus

Market Driven Agenda Management is focused on three specific enablers of stronger performance over time: alignment, competencies/process and insight

1. Leadership Team and Board Alignment on Where to Play

and How to Win

  • Key growth platforms and target markets
     

  • Future resource deployment: restructuring/profit enhancement, growth, shareholders/debtholders
     

  • Mix of organic vs. acquisitive growth
     

  • Portfolio rationalization

  • Goal setting
     

  • ‘Delivery Agenda
     

  • ‘Decision Agenda’
     

  • Zero-based resource allocation
     

  • Strategy deployment and performance management
     

  • Ongoing Center-BU strategy dialogues

2. Continuous

Strategic and Performance Management Process

  • Actionable segmentation
     

  • Concentration of current performance and value creation
     

  • Market structure, profit pools and headroom for growth
     

  • Current competitive positioning and key drivers
     

  • Customer needs and buying behavior

3. Market Driven Understanding of Current Performance and Potential

Linking Strategy, Capital Allocation and Value

Our approach enables a more informed discussion around the performance and value implications associated with alternative strategies, underlying priorities and investment paths

3 Year Valuation ($M)

Enterprise Value Creation Associated with Alternative Strategies and Capital Allocation Choices (Illustration)

Value

Goal

Current

Valuation

Baseline

Selective Rationalization

Portfolio Mix Optimization

Aggressive Organic

Growth

Organic Growth & New Platforms

Investment Platforms/

Strategy

Probability of Success

Re-Invest to Support Business As Is

More Aggressively Streamline and Rationalize Portfolio

Enrich the Mix of Market Participation Across Portfolio

Aggressively Invest Behind Share Gain Strategies in Target Markets

Aggressively Invest Behind Existing and New Markets

  High  

  High  

  Med-High  

  Medium  

  Med-Low  

3 Year EBITDA

Incremental Invested Capital

 $40M  

$50M  

$70M 

$60M

$80M  

$20M  

 $10M  

$50M

$100M 

$400M  

Multiple

5X

 5X  

6X

7X

8X

Agenda Management

Our approach builds management team ownership for a dual set of agendas that reflect the most critical ‘delivery’ and ‘decision’ priorities necessary to maximize value creation

Performance Upside

Strategic Plan

Baseline

Performance

Future Financial Performance

 (Rev, Op Profit, EBITDA EP, Value)

‘Baseline’ reflects assumed future performance based on:

  • Underlying market growth

  • Holding share (unless otherwise noted) in existing market segments

  • Expected impact of existing initiatives already underway (e.g., lean, restructuring, commercial activities, etc)

Delivery Agenda: high priority strategic initiatives that are ‘in the plan’:

  • Clearly defined actions and resource requirements

  • Typically nearer-term oriented

  • Performance targets reflected in next year budget and multi-year plan

  • Additive to the baseline (higher share and/or higher profitability)

"Near-Term

Delivery

Targets"

"Long-Term

Decision Gap"

Decision Agenda: high value at stake opportunities that represent upside to the plan

  • Clear value creation potential but further investigation required

  • Not yet incorporated in the plan

  • Typically requires consideration of alternatives

  • Translated to the Delivery Agenda when highest value alternative agreed and actions defined

© 2018 by TRC Advisory