Pursuing New Growth Vectors
The management team and Board had identified numerous new growth vectors, but there was no consensus on which of these warranted proactive investments. Health Advances was chosen to lead the executives through a methodical process injected with facts to build consensus on the path forward.
- The management of a specialized reference lab was concerned that the lab was too dependent on a small number of tests vulnerable to reimbursement cuts.
- When considered thoughtfully, the lab enjoyed a long list of core competencies ranging from physical assets like underutilized equipment to a flourishing IT interface with customers to scientific intellectual property.
- Health Advances worked with the management team to identify and evaluate realistic new businesses the lab should consider entering.
Critical Questions to Address
- What are the lab’s core competencies?
- Into which new businesses might these competencies be deployed?
- Will the client be able to compete effectively in these new businesses?
- What investments will be required?
- What is the realistic sales potential of each new business in the near-term?
Health Advances Approach
- Interview each executive to understand his/her perspective on core competencies
- Interview the lab’s longtime customers to hear their perspectives on the client’s strengths vs. competitors
- Based on Health Advances experience, identify new growth vectors to stimulate management’s thinking
- Brainstorm to identify new business opportunities susceptible to the client’s competencies
- Research the most promising new businesses to identify the key success factors and practical ways for the client to enter these segments
- Estimate the financial ramifications of the client entering each business
The management team embraced a few of the new business opportunities and presented a slide similar to the one below to the Board to gain Board approval. The team is currently pursuing two opportunities organically and a third opportunity via M&A.