Driving organic growth, not M&A, is key, say senior executives
Over half (52%) of interim executives thought that pursuing organic growth should be the key focus area for businesses over the next 12 months, ahead of pursuing M&A opportunities - only 5%. Overseas expansion was next on the list with just 13%, followed by reducing debt with 9%.
Interim Partners’ study was conducted amongst nearly 700 interim executives- managers or senior executives, at or just below board-level, who are recruited on a short to mid-term basis.
Steve Rutherford, Managing Partner at Interim Partners, comments: “Interims are questioning whether M&A should be businesses’ number one priority in order to achieve growth.”
“M&A is one of the quickest tools for businesses to enter into new markets, achieve economies of scale and generate growth. However, even though the value of M&A activity is currently at its highest level since 2007 reaching $1.3 trillion in the first four months of the year, senior managers and executives do question if it should be such a high priority.”
Interim Partners points out that as the UK economy strengthens, reducing debt has steadily become less of a concern for businesses, falling to 9% from 11% in the previous year’s study.
However, Interim Partners says that achieving organic growth could be undermined by a lack of investment in key areas such as R&D, IT and operations.
More than a third (35%) of respondents said that product and service development (including R&D) suffers the most from underinvestment. IT & business infrastructure came second (19%), followed by operations (15%).
Steve Rutherford, Managing Partner at Interim Partners, comments: “Organic growth is now seen as the primary concern for the private sector, but it’s very difficult for businesses to achieve this if they have let investment in new products and service development lag behind their rivals.”
“As the economy continues to recover businesses are all looking at how they can maximise their potential, but if they don’t have sufficient technical or operational infrastructure in place then these businesses may struggle to reach their desired level of growth.”
Interim Partners’ research also found that 40% of interim managers think that management information should be a priority for firms that are looking to upgrade or enhance their IT systems as business prospects improve. Data security was next on the list with 26%, followed by digitalisation with 17%.
Steve Rutherford comments: “Improving the efficiency of senior level staff is seen as a vital goal for companies hoping to pursue organic growth. One method is to make management information easily accessible and well organised so that valuable management time is not wasted trying to navigate through outdated IT systems.”
“Data security is now a growing concern for many businesses especially as they become increasingly driven by the digital world. Protecting intellectual property or your clients’ information should be at the forefront of investments into enhancing IT systems.”