Documens Boss

A few years ago Document Boss created an advert which was of a character trying to look through a keyhole at the world on the other side of the door with the headline:
 
 “Do you have a restricted view of your market?  Then let Document Boss open the door”.
 
It was one of my personal favourite marketing pieces because it touched upon an important aspect of acquisitions but was illustrated with a simple image.  Many companies, even within their own specialised area, see just a very restricted view of the market. This image captured that idea very effectively. Making something simple from the complex is one of my recurring themes, not sure what that says about me?
 
Meeting senior executives from the ECM sector is one of the most pleasing aspects of my work and I know that is true also for the rest of the team here at Document Boss. It is fascinating to hear how different executives and companies overcome hurdles and capitalise upon opportunities.  The battle stories, if you like, of our industry.
 
One of the benefits I get from such meetings is to spot the trends and common denominators. The most interesting of which are spotting the common characteristics between the various companies in our sector, combined with getting a feel for the sub-sectors within our industry and how well they are doing relative to the other sectors. See sector see mindmap
 
View from the top of the hill
When looking at your business strategy, you need to be able to step back from your business and get the full vista of your business sector.  I find the best definitions for the difference between strategy and tactics are defined in battle terms, which is where I believe the word strategy first came from, being the word for “General” in Greek.
 
Strategy vs. Tactics in battle
How a battle is fought is a matter of tactics. The terms that it is fought on and whether it should be fought at all is a matter of strategy.  In my mind, when thinking about strategy or tactics, I think of the generals up on a hill, looking at the battle field from a distance, looking at the overall movement and terrain, dictating the strategy of the battle while the sergeants leading the troops are on the ground implementing the tactics. A definition of strategy is therefore, “the planning, coordination and general direction of operations to meet overall objectives”. Tactics implement strategy by short-term decisions on the movement of troops and employment of weapons on the field of battle.
 
Knowledge and understanding is key to prevent keyhole strategy
The analogy can easily be transferred to business.  If you have a good view and understanding of your sector, the competitors and drivers, then you are in a good position to put in place a successful strategy that will lead to the creation of the right tactics.
 
However, in order to do this, it is essential that you have solid information and a good view of your business battleground. (Am I starting to sound like Sun Tzu?) Ensure that you have a clear overview of your sector and the businesses that you compete against or which could become competitors.  I am frequently surprised at the limited view companies have of even their own sub-sector within the ECM industry, often missing competitors and seeing competitors that, in reality, aren’t competitors at all. Because you sell the same technology does not mean that you compete.  If you focus upon the SME’s and the other company is focusing upon deals of $500k and above you could even be allies.  There are many such partner opportunities missed in this sector due to lack of knowledge and correct perspective.
 
I am even more amazed on what little evidence business strategies are based.  The keyhole view leads to a keyhole based business strategy which could cause considerable problems if the business is set off in the wrong direction.  Another mistake we come across frequently is companies focusing on what they see as their main “unique” strength and missing their true value proposition. Consequently, it may not be the wrong direction but a lack of market knowledge and as a consequence, they employ the wrong tactics due to their naivety, which can be just as ineffective.
 
Keyhole view leading to wrong fit
When acquiring, it is just as important to have a good understanding of the business sector and this can be challenging if you intend to move into a neighbouring or even, unconnected sector. Many acquisitions set out in pursuit of a few known competitors and then try to shoehorn them to make them fit.  You need to have a good view of the possibilities so you get a “Right Fit.” This is not always obvious, for a number of reasons.
 
Many large ECM companies have made acquisitions of Data Capture companies over recent years as they have seen the capture technology as the “on ramp” to their ECM solutions.  However, I think that they at times have demonstrated a fairly superficial understanding of this area and their acquisitions have subsequently reflected this.  Have they bought what they thought these companies would give them?  I think many have discovered much later that their capabilities still fall short.
 
Future acquisitions
Document Boss has seen a significant increase in M&A activity in just the past six weeks and I see a new spate of acquisitions in this sector on the horizon.  Will the same mistakes be made again where the accountants rule and spreadsheets are their tool.  I do hope not. This sector has immense growth potential and with the previous focus on the top level acquisitions from the largest companies in this sector,  the window is wide open for new stars to make themselves seen. Both vendors and clients are now more educated and many of the most important issues are more clearly understood. It requires more than a superficial knowledge to ensure the right acquisition fit and this is where a more thorough acquisition and informed acquisition strategy is required.
 
For the true business, generals who would like to sit up on the hill and look down on their sector instead of peeking through a keyhole, walk this way..………….
 
Key Points
1. Know your sector; competitors and market trends
2. Don’t base decisions upon a keyhole view of the market and ensure your business plan is based upon solid market knowledge
3. A competitor may not always be visible to your sales and marketing team
4. Don’t shoehorn your requirements to make them fit the opportunity before you
5. Create an M&A strategy that is based upon your business plan and objectives