A recent week of multiple meetings with Hunterlodge’s finance team has seen February focus my mind on the future. After a hugely successful year in 2016, it is important to capitalise on this high and look at growth strategies for the future. It’s not something I am looking at implementing immediately, but it’s good to scope out all the possibilities and look at the general direction in which the company is heading.
Each year in November, we carry out a full strategic analysis for business growth that informs our yearly business plan launched in January. This incorporates deep dives into competitor sets, acquisition, golden handshakes, service addition, HR investment and technology audits.
This is supplemented with a second review following the previous year’s final accounts. Thorough ROI analysis takes place, investigating cash investment into new businesses or stocks and shares.
In terms of growth strategies for early 2017, the decision came down to a property portfolio or a managed fund – however, when we factored in yields, returns and hassle, it was decided to opt for a managed fund.
Next, we needed to look at longer-term growth strategies. Unlike a product-led company, growth strategies in the service industry can’t necessarily rely on product expansion or diversification. This is particularly true within the advertising industry – developing a new service within such a specialised and knowledge-based arena takes a long time and a huge investment – and there are a number of inherent risks. Does it fit with our brand? Will it fit naturally into our service portfolio? Will it detract from our existing services or take the focus off other key elements of the business?
Historically, the evolution of Hunterlodge has seen this type of organic growth, moving from a print-led company in the 1990s through to the full service, integrated agency that it is today. Recent years have seen us define our offering more clearly to include standalone strategic consultancy and data services however, this was as a direct result of existing expertise and capabilities within the company. Implementing a completely new service is a high-risk activity that needs huge time input that is arguably better spent elsewhere.
Another potential growth strategy could be through mergers or acquisitions – a popular strategy within the advertising industry. Independent agencies of a certain size appear to be a dying breed, with Karmarama even being bought out last year by consulting giant Accenture in a move that surprised many within the industry.
However, with the fast past of technological change and the rise of technologies such as adblockers that put the choice back in the hands of consumers, both agencies and the huge consultancies that are snapping them up are having to rethink positioning within the market.
At present, selling Hunterlodge isn’t in my DNA – although I have considered buying up complimentary agencies that could possibility add strength and depth to our offering. However, at this stage, there are too many risks to this strategy and would prove too big a distraction in terms of both time and resource. Strategic alliances might prove to be a more beneficial route, so this is something that might be worth adding to the board agenda over the coming years.
Our success over the past years has come from our people and our dedication to CPD. Creating a highly-trained, engaged and committed workforce has led to the provision of a much more effective advertising solution for our clients, greater client satisfaction and the ability to create more revenue from both existing clients and the creation of new business. So, perhaps we should be turning to our staff to drive our growth strategy.
Despite rapid growth in staff numbers in 2016, there are still areas of the business that could be developed with the right employees on board. We certainly haven’t reached saturation point with our existing service offerings so this is an area which we are looking to develop over the next few years. Our focus will be on key hires to drive the business forward, strengthen and maximise our existing capabilities. It’s not a quick solution but it is a longer-term, more sustainable solution for Hunterlodge that fits more closely to our development culture.