In today’s fast-paced business environment, new opportunities are waiting around every corner—but determining which ones are right for your company isn’t always easy. In fact, it’s often downright difficult.
If you’ve been struggling to determine which opportunities make sense for your company, you’re not alone. In a recent roundtable discussion with public company CEOs from across Alberta, we learned that many of them are often tempted to embark on strategic acquisitions, launch new products and explore new geographical markets, but are hesitant to pull the trigger.
Without the proper research behind you, these endeavours have the potential to do more harm than good—but missing prime opportunities can also set your business back. That’s why it’s important to have a plan in place before they arise—one that includes a clear course of action, proactive preparation and a risk-friendly mindset.
Set a course
When new, exciting business opportunities arise, business owners must be careful to not go into anything without making sure it’s right for the company. For example, according to our roundtable attendees, this can happen when you attempt to address evolving customer sentiments—say, with a new service offering—before your organization has the tools to effectively roll it out. Similarly, given the rapid pace of today’s business environment and the perceived need to diversify, it can be all too easy to jump at a merger opportunity that doesn’t complement your business.
One way to avoid negative outcomes is to set a course—and follow it. This is typically done by clearly defining your organization’s vision and drafting a business strategy that aligns to it. Ideally, your strategy should consider trends that are emerging in your market, new entrants and evolving customer sentiments, and attempt to address them by leveraging your organization’s strengths.
That said, this business plan doesn’t have to be written in stone. It should be flexible enough to accommodate changes as they arise. But it should also give you an idea of what types of opportunities work for you and which ones to pass on.
With a plan in place—and an idea of where you see your business going—it’s also critical to make sure your organization is primed and ready to seize opportunities as they arise.
According to our roundtable attendees, one way to do this is by getting to know your customers and suppliers better. Because these stakeholders’ sentiments often drive the direction of a business or market, it can be helpful to stay abreast of their expectations and proactively steer your organization in that direction.
It can also be helpful to look both within and outside of your market to identify lines of business that could enhance your existing offerings. Because mergers and acquisitions are a quick way to effect a desired change in direction, you’d be well-served to ensure your company is M&A ready—by familiarizing stakeholders with your organization’s strengths and weaknesses, maintaining clean bookkeeping practices and ensuring all important financial information is on-hand before an opportunity presents itself.
For many public companies, risk is a dangerous word. This is likely because a company’s risk tolerance typically falls under the jurisdiction of the board—a group that tends to be risk-averse.
To overcome this challenge, it’s important to educate your board on the changing nature of business and the role risk plays in it. According to our roundtable participants, not only is it necessary to accept more risk if one hopes to survive in today’s environment—given the fast-paced nature of work—but it’s also a critical ingredient for growth.
In fact, if risk is approached in a deliberate manner, it can actually offer a strategic organizational advantage—and that’s a realization that your board, and organization, must acknowledge.
Strike when the iron is hot
Today, public companies have little time to make critical business decisions. To make sure they’re the right ones, it’s important to approach every decision strategically—and ensure you’re ready to answer before opportunity knocks.
To learn more about how Grant Thornton can help your organization seize the right opportunities, contact us.