Last week Three Pillar closed an acquisition that is the first major milestone in the 3 Yr. plan we set forth last December. The plan, dubbed “$50mm in 3 Yrs.”, includes not only revenue growth, but a plan to strategically position the company as the leader in the OPD (outsourced product development) sub-sector of IT Services. We not only believe that this is attainable, we are confident that our strategic plan will get us there.
Growth is a large part of every company’s strategic plan. There are many reasons including the common phrase that “if you’re not moving forward, you’re moving backward”. Increasing shareholder value, creating opportunity for employees, and deepening the value that can be delivered to client’s are all good reasons.
I’m a firm believer that in order to build value, a high growth firm must balance both organic and acquisition growth. Why are both important? A few reasons:
- Organic growth is core to any business. It shows a strong market demand and that the firm is delivering real value. Combined with a strong P&L, it also shows an ability to remain viable and operate as a healthy organization.
- Organic growth provides opportunity for employee growth. Water turns stagnant if it sits still and so do employees. Team members need opportunities to grow, stretch their wings, and take on more responsibility. Organic growth provides a vehicle, and in fact requires, employees to step up.
- Acquisition growth provides the potential for immediate scale and impact. While potentially higher risk, acquisitions can be used to refine a company’s strategy, positioning, and expertise, as well as helping to drive a business value and real economies of scale.