Last month, in Part 3 of our series The Artemis Approach: New Product Development, we walked through one of the most critical steps in New Product Development (“NPD”) initiatives, the challenges of NPD in founder-owned manufacturing businesses, and how Artemis fuels innovation at our Industrial Tech portfolio companies. In this fourth and final piece on the Artemis Approach, we highlight the importance of building a team to the success of NPD, maintaining the culture of the business, and ultimately transitioning into a larger organization.
Over the course of this series, we have highlighted some of the most challenging aspects of business ownership in the lower middle market. We have discussed the right questions to ask as a manufacturing company seeks to keep their product offering ahead of the competition. We broke down the importance of culture to the identity and success of businesses in our industrial tech industry. We also, spoke to transition periods in the ownership of a business and the uncertainty decisions like this can bring. If you haven’t read those, head back and check them out (links at the bottom of the page) before we wrap this series up and look to the next series.
Team building can often appear to be a straightforward process. In reality, over the course of several decades, the waters can often become much more muddied than a simple step-by-step process. It is however, incredibly essential to almost every aspect of achieving success as a business owner. Often difficult questions can impact the short and long-term trajectory of a company. Questions like: As original team members leave for other opportunities or retirement, how do you onboard new team members into traditional company customs of communication and accountability without stifling the new ideas that they may bring to the table? As the company makes strategic adjustments, how do you align a diverse team to new objectives, practices, or systems? How do you balance your hiring objectives to simultaneously seek team wide cohesion and diversity?
This is something that we at Artemis believe to be absolutely fundamental to the success of our portfolio companies. We have said it before and we’ll say it again, but, at the end of the day, our job is to empower our portfolio companies to achieve growth, impact, and customer satisfaction. Through strategic guidance, resources, and M&A, we are able to attract the highest quality talent to our portfolio companies – building teams that are agile, collaborative, and successful.
Creating innovative teams capable of continuous New Product Development can be challenging, but important to the long-term success of a business. At Artemis we look for companies that have built diverse and mission-oriented teams so that we can then continue to develop the talent and ideas of our employees and augment leadership teams with personnel that bring industry expertise, strategic alignment, and fresh ideas.
While culture building may have been historically less of a focus for owners more interested in measuring and building profits, more recently it “has become a strategic priority with impact on the bottom line.” New corporate culture-building models are ascribing influence and accountability for the development and maintenance of the company culture more laterally and equitably and these practices begin from the ground up as employees are onboarded, promoted, and transitioned.
Lastly, as noted in pages 17-22 of this Deloitte Perspectives release including both “Taking the lead during a merger” and “Stacking the deck”, the importance of adequately constructing and implementing the leadership dynamics of both the acquiring and acquired teams cannot be understated. This is one of the reasons that senior leadership teams can be a first (and informal) point of diligence for Artemis as a buyer of Industrial Tech manufacturers and a highly strategic value creation lever for Artemis as the seller.
Overall, this series about the Artemis Approach has broken down just a few aspects of our differentiated approach to the traditional Private Equity Model. At the end of the day, all of our strategies and models mean nothing without the incredible employees, from the ground up, that build our industrial tech products, empowered by shared values, and a dedication to creating a healthier, safer, and more productive future.