Seven Traits of MidMarket Leaders
The MidMarket Growth Company has developed a framework called the Growth Potential Framework for measuring a medium-sized business’ ability to grow. It has been developed from extensive research into successful medium-sized enterprises in the UK and Germany, and describes the traits of leading medium-sized businesses.The seven traits are shown in the diagram and explained in brief below.
- Market Focus. Market Focus describes a company’s market strategy. Leading companies select focused, high growth markets and/or very tight, highly specialised niches, which they then seek to dominate. They also have a very clearly defined point of differentiation.
- International Expansion. International Expansion describes a company’s ability to expand internationally either by export, development of international sales and distribution networks and/or moving elements of production abroad. Leading medium-sized companies have exploited globalisation within their niche.
- Sales Engine. Sales Engine describes the go-to-market strategy of and processes that the company has in place to generate predictable revenues. Best practices in this area include use of both inbound and outbound marketing, tight integration between sales and marketing functions, disciplined use of strategic account management and a multi-channel sales strategy that maximises market coverage.
- Closeness to the Customer. Closeness to the Customer describes a company’s ability to maintain and develop long term customer relationships. The leading medium-sized companies have developed interesting and innovative ways of creating “stickiness” with their most valued customers.
- Innovation. Innovation is critical for developing niche market leadership and maintaining above-average margins. Leading medium-sized companies typically spend more than average on R&D, work closely with their largest customers to develop new solutions (products or processes) and are often able to sell on value & quality rather than price.
- Funds for Growth. Growth can be expensive, so medium-sized companies need to have access to sufficient capital to fund their growth. The very best medium-sized companies adopt very conservative financial policies in order to fund their own growth and are therefore self-funding.
- Leadership and Skills. Strong, consistent growth requires clear goals, ambitious leaders, professional governance and access to the right skills. Sometimes, medium-sized companies in the UK are accused of not having ambitious goals. Leading mid-market firms not only have aggressive goals for growth, but also make decisions for the long term and are able to find and attract the people they need.
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