Page 44 - MetalForming January 2015
P. 44

  Connecting Capabilities
Strategic Growth
For an investment in equipment, technology or skill to be worthwhile,
it must provide significant value to existing or new customers; meet an existing or potential market need; and hold significant margin potential.
If you build it, they will come. That should be a strategic one driven by the or new customers;
growth objectives of the business, not based on which salesperson contacts you most frequently or seems the friendliest.
Based on the fundamental areas of growth for businesses in the metal- forming industry (and remaining sen- sitive to today’s boom or bust econo- my), to ensure sustained business growth we need to apply an approach that will aid us in making timely and effective strategic decisions.
Strategic-Investment Decision Model
I use this model with my clients to help assess opportunities that exist for investments in growth, while still retaining a comprehensive under- standing of those areas most critical to supporting investment. Here’s how the model works.
For an investment in equipment, technology or skill to be worthwhile, it must:
• Provide significant value to existing
used to be the mantra of any busi-
ness flush with cash—not neces- sarily a position held by many in the metalforming industry in today’s feast or famine economy.
Many of my colleagues, and even some of my clients, struggle with where to invest to ensure significant business growth. The decision comes down to three focus areas: Equipment, tech- nology and skill.
Our post-boom economy has brought about changes that would make even the most confident investor nerv- ous. This is where reality sets in, because as they say—if you aren’t growing...
The decision of where to invest
Shawn Casemore, president, Casemore & Co. Inc., helps organizations realize operational excellence through a focus on improvements in the areas of busi- ness strategy, process design and execu- tion, supply-chain management and cultural evolution; 519/470-7697;
• Meet an existing or potential mar- ket need; and
• Hold significant margin potential.
Meeting any two or fewer of these areas will result in the investment being set aside for consideration at a later date, or cancelled completely.
I find that although these three areas are fundamental to investment deci- sions, the approach taken to assessing how well an opportunity stands up in each area is less than strategic.
Here’s an example. Consider for a moment the variations of a poor investment:
• Customer value and market need, but no margin potential = no return on investment.
• Market need and margin potential, without value to the customer = a short-term investment.
• Margin potential and customer value without market need = a sunk investment.
Of course, I am simplifying the pop- ulation of this model for the purposes
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