Biggest Challenges for Mid-Market/ Middle-Market / Mid-Sized Companies

by:StuartMorley

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Mid-market companies are some of the worst hit during this global credit crunch, especially in the US and Canada. These businesses represent a significant portion of the employees in the economy but have not been receiving attention in the media or with government. It is particularly noticeable in the challenges these mid-market companies are having in refinancing their businesses and securing additional credit to cope with the significant changes. These mid-market companies also find it tougher to make changes than the smaller or large companies.

"Mid-market leaders must cover a much wider front and cope with much greater uncertainty" according to a white paper on Mid-size Organizations produced by IBM in February 2009. This white paper went on to state that 'mid-market companies must 'master complexity'... for everything is important and change can come from anywhere."

In times of significant change, especially times of adverse change, it is often very difficult for mid-market organizations to make changes. Picking the top three issues is crucial. In the good times the most common strategies for mid-market companies to focus on, according to a study by Deloitte Consulting, are: revenue growth; strengthening the management team; and new products. However in the tough times the top three (according to research by BRS JUMP is the focus needs to be on: rethinking the pricing and product/service offerings; better utilization of key assets; and streamlining decreasing overhead costs to ensuring the long term future for the business. However these strategies require more planning and detailed costing information than is readily available in many mid market organizations.

In the good times, doing nothing can often be the best solution. Management of mid-market organizations hate to make changes - especially when the changes are controversial. Therefore delaying a decision pending more information or delegating so an employee can solve the problem on their own works well in the good times. In the tough times it is a different situation. Now the company needs to focus on what will change and when and by how much will they change. In the tough times the challenges come by the bucket load rather than one at a time and they are seldom the challenges you expect!

Tough times usually mean it is time to button down the hatches and wait until the storm passes. CEOs who practice this approach find that when the good times return, there are competitors who have shot ahead and now dominate the market place. These successful companies decided to dance in the rain rather than run for cover. The successful mid market companies know that making a decision, even when it is a leap of faith has a better chance of success than doing nothing when the businesses is heading for disaster.

Why are CEOs of mid-market companies so surprised when they lose key customers? One explanation is the temptation to spend more time focusing on the state of the general economy or industry trends rather than getting to know their key customer's business better than the customer even knows their own business so they can see the challenges coming long before the customer even realizes the issues. Or the other issue is the CEO sees the changes coming but is reluctant to act until the customer acts and by that time the mid-market company is left scrambling to recover before it is too late.

The two worst situations facing a mid-market business are firstly when the leadership loses interest or enthusiasm for the business because they no longer see the potential upside or benefits of struggling through yet they won't step aside or secondly the leadership becomes obsessed by short term issues and ignores the bigger issues facing the business. We also face situations where the leadership does not know what they want to achieve with the company or they cannot pick a direction for the business. This is easier to rectify if the ego of the leader is such that they can step aside. However, too often the leader can't bear the thought of giving up control and the shareholders or board of directors will not make the tough decision and replace the leader.

Leaders of mid-market organizations often need more outside help than leaders of larger companies during tough times, as the workload increases dramatically when they are dealing with unusual circumstances plus these mid-market companies often lack the management depth to be able to delegate the extra work.

Article source: Author Palace
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About the Author:

Stuart Morley MBA is a recognised authority in advising mid-market companies during their rebuilding phase. Go to his website Rebuilding Middle Market Companies for more information including video clips, articles specifically for mid-market market organizations and order his recently co-authored book (with Gord Griffiths and Morris Slemko) called "Weather the Storm" Survival Guide for Mid Market Organizations.

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Biggest Challenges for Mid-Market/ Middle-Market / Mid-Sized Companies
Category: Management
Keywords:
corporate restructuring,refinancing,turnarounds,rebuilding mid market companies,business leadership,management,strategy,reoganization,change management,family business
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Biggest Challenges for Mid-Market/ Middle-Market / Mid-Sized Companies
Category: Management
corporate restructuring,refinancing,turnarounds,rebuilding mid market companies,business leadership,management,strategy,reoganization,change management,family business

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