It behooves every business owner—especially middle market business owners—to understand where their company’s value lies. What is it that the company can deliver to a customer that they can’t get elsewhere? Or, perhaps equally importantly, what makes it a value add to prospective investors and would-be acquirers?
This understanding is especially important for businesses that fall in the mid-tier spectrum of business, according to Robert Olsen, CEO of Whitney, Bradley, and Brown (WBB). “You can’t play in the small business domain anymore,” and you’re not, “…a billion-dollar company that has resources…that they can throw at anything.” Instead, a mid-tier company needs to understand what specialized value they can deliver that larger or smaller competitors can’t match or can’t match as quickly.
Whether your growth strategy is centered around organic growth or expanding via mergers or acquisitions, you need to understand what makes your company uniquely valuable in order to bring in new business, retain existing customers, or reel in a new merger or acquisition.
In the government contracting industry, there are any number of assets that could make a company valuable to government clients. It could be a raft of hard-to-acquire contract vehicles, an exclusive “club card” that unlocks an opportunity to sell to a certain federal agency. Or it could be innovative technologies or intellectual properties that answer longstanding problems in government IT.
But, according to Mr. Olsen, it could also be the unique expertise of one’s employees. And that should not be overlooked as a part of a company’s value.
“We sell intellectual capital, which is our people…that’s what makes us,” told the attendees at ACG National Capital’s June monthly meeting. “[In fact] the talent in our company waters my eyes.”
It’s a key reason why WBB has grown substantially, from a company in 2012 that had only a six month backlog and 30 percent of its portfolio comprised of prime contracts to 70 percent prime and a 3 year backlog, with a, “pipeline in the billions of dollars,” just a few years later.
The value companies can derive from the expertise of their employees is why, “people companies,” such as WBB, need, “a strong human capital strategy,” that helps them retain and grow their pool of talent. How does a company develop an experienced base of expert employees? Mr. Olsen laid out several ways in which WBB has taken steps in that direction, including giving “junior- and mid-level people a runway to…advance at WBB” and a part-time program that lets WBB continue to make use of their experienced personnel once they have retired from full-time work.
Above all though, he emphasized how the company keeps its people passionate about the work that they do – emphasizing the importance of their jobs and their impact on the nation’s security. “When you’re helping the new advanced bomber get fielded, that’s pretty sexy stuff.”
As we’ve seen at previous monthly chapter meetings and at ACG National Capital events generally, growth, and the factors that drive it, can vary as much as the companies themselves. However, even outside of the government contracting industry, business leaders would do well to heed WBB’s example and prioritize a strong human capital strategy. No matter what else makes a company valuable, the expertise of the people that work there has to be a part of the equation.
For more insights from business leaders like Robert Olsen, click here to register for the next ACG national Capital Monthly Meeting.