Building Business Value | Corporate Management Strategies

Curve Ball: Throwing Good Money After Bad Revenues

Major league strategies for mid-market CEOs

Love 'em or hate 'em, the New York Yankees just won their twenty-seventh World Series championship title.

That's nearly three times as many as the number two team, the St. Louis Cardinals (just 10), almost four times as many as the Yankees' Beantown rivals, the Boston Red Sox (just seven titles since 1903).

Sure, the Yankees have paid ballplayers huge salaries the last 10 years. But, they've only won World Series championships in 2000 and 2009. So, what is it that makes the Yankees such a winning team, perhaps the most valuable franchise in professional sports?

They don't chase every ball and every high-priced ballplayer, only ones that build value for the team's long-term efforts to win World Series.

Successful mid-market companies work the same way and mid-market CEOs need to pay heed.

Three strikes and you're out

Consider these minor league mistakes many mid-market companies make:

• Swinging at every pitch

Not every customer is the right customer for your business. If they're not core to your business, you'll soon find it costs more to service those "bad revenue" customers shrinking your profit margins in the process.

• Taking your eye off the ball

As a member of the Board of Advisors at the University of Maryland, Baltimore County Business Incubator, I see pitches-funding pitches-all the time. The ones that consistently get funded beyond the angel investing stage are the ones clear in their market.

• Swinging for the fences every time

It's expensive and inefficient to have a team full of cleanup batters. Mid-market companies that spend too much time and money supporting infrastructure that is outdated or unnecessary and can't be supported efficiently, increase their operational costs and miss opportunities to gain efficiencies.

It's tempting to try to hit a home run every time you come to bat. But, for mid-market CEOs focus and discipline are key. Keep your eyes on the prize - your target market - and resist the temptation to waiver under market pressure.