New Research Shows that a Formal Strategy and Execution Plan Is Key to Middle Market Company Success, But 40 Percent of Companies Don't Have One

COLUMBUS, Ohio, Nov. 29, 2018 /PRNewswire/ -- Strategic planning is a powerful driver of growth for middle market firms. It accounts for nearly 15 percent of revenue growth and companies with well-defined strategies report a 26 percent higher growth rate than companies who focus less clearly on mapping their future. Despite those obvious benefits, nearly 40 percent of middle market businesses lack a clearly defined strategy to guide their business.

The new report, Strategic Planning for Growth: How Middle Market Companies Map Their Futures released today by the National Center for the Middle Market (NCMM), documents the strategy practices of high-performing middle market firms and provides a series of questions that companies can use to build, refine and improve their strategic efforts to ensure success.

The research, which surveyed 400 financial decision makers at middle market companies across a range of industries and geographies, sheds light on how strategic planning can accelerate business growth and profitability. The report finds that organizations with a well-defined strategy have annual growth rates reaching almost 10 percent compared to approximately seven percent for those with less-defined strategies.

The report reveals three key characteristics of strategy development and execution in fast-growing firms:  

• A clear-eyed assessment of their capabilities and the obstacles they face, as well as the resources needed to reach their goals
• Inviting input from all employees across the organization and from outside sources
• Communicating the strategy to all employees and translating it into specific targets, plans, budgets and incentives

"Middle market companies that take a strategic approach are more confident in their business because they know the direction it's heading. They also are able to clearly communicate their businesses value – both critical factors for success," said NCMM Executive Director Thomas A. Stewart. "It's evident from our analysis that the most effective process challenges management's assumptions to strategy planning and allows bottom-up ideas to surface."

A successful strategy depends on a rigorous and inclusive strategy-development process and, equally, on a way to ensure that all employees can see how their work connects to the company's goals.

"That means aligning budgets, incentives and bonuses, and key performance measures to the strategy," said NCMM Managing Director Doug Farren. "It's important for companies to know that a strategy is only as good as its execution. Even a skeletal plan is better than none—but a great plan with no follow-up won't get you anywhere."

About the National Center for the Middle Market (NCMM)

The National Center for the Middle Market is a collaboration between The Ohio State University's Fisher College of Business, SunTrust Banks, Cisco Systems, Inc., and Grant Thornton LLP. It exists for a single purpose: to ensure that the vitality and robustness of Middle Market companies are fully realized as fundamental to our nation's economic outlook and prosperity. The Center is the leading source of knowledge, leadership, and innovative research on the middle market economy, providing critical data analysis, insights, and perspectives for companies, policymakers, and other key stakeholders, to help accelerate growth, increase competitiveness and create jobs in this sector.

Housed at The Ohio State University's Fisher College of Business, the National Center for the Middle Market is the first center of its kind in the nation. The Center enthusiastically serves middle market firms, students, academic researchers, policy makers, the media and other key stakeholders with interests in the health and well-being of the middle market. The Center is fully committed to funding and distributing the most credible open-sourced research, dynamically creating new knowledge, providing programs that drive value for middle market companies, and offering a well-informed outlook on the health and future of the middle market via the Middle Market Indicator.

SOURCE National Center for the Middle Market