Case Study - Sonix

Client Situation.

A manufacturer of ultrasound testing equipment, Sonix had developed a unique niche and approach in the market. Their strengths were in providing a customized product and a fully integrated product offering. Four founders had successfully run the company for years but were looking for a growth strategy that increased the value of their company and offered them options to personally exit the business.

Challenges.

  1. The four founding partners and owners of Sonix had a good sense of their market and their products, but tended to project the business and revenues in one-year timelines. Growth planning was more opportunistic.

  2. The elements of a strong story existed in the company's almost 10-year history, but the story itself had not been crafted for outside audiences.

  3. No succession plan was in place for the company should any of its founders choose to leave or become incapacitated. Each founder held largely in his head the full knowledge base for the part of the company for which he took responsibility. No formal, documented operations processes existed.

  4. To various degrees each partner wanted the option of an exit from the business, but the value of the company was still very much wrapped up in each individual's role in it.

Lighthouse Role.

In partnership with management, Lighthouse planned and executed a step-by-step process to evaluate the company's status, shape its message, and prepare it for its future. This included the following:

  1. Evaluation of the company's status, strengths and market potential. Lighthouse examined the company's business history, conducted extensive interviews of its staff at all levels, and interviewed its customers to gain a true sense of the value inherent in the company.

  2. Assessment of each partners goals, personally and for the business. Lighthouse also perceived that the long-term goals of the partners were not necessarily in alignment. In-depth personal interviews with each partner were conducted and the results laid out in a series of strategic meetings, arriving at a mutually acceptable and openly acknowledged path. The absence of this had been a key stumbling block to dealing with the future.

  3. Development of a company story to communicate value to the outside world. Lots of good work but no consistent or coherent message to the outside world made it hard for Sonix to communicate value to potential investors. Lighthouse developed, in layman's terms, a clear and compelling story that allowed others to see the value the partners had created.

  4. Documentation of processes for each department to provide a sustainable path and plan. Lighthouse then set about, with the help of the company's own managers, to define how the company did what it did so that it could be improved on, expanded, and ultimately transferred to other managers.

  5. Initiation of a recruiting process to spread out responsibility and initiate the potential for succession. As a final internal step, Lighthouse helped define the gaps in management that needed to be filled in order to allow the company profile and value to develop distinction from the personalities of the four founders. A recruiting plan was developed to support this growth plan.

  6. Marketing of the company. Finally, the company began to spread the word of its newly minted story and prepared to back it up with new processes in order to attract new customers, partners and ultimately acquirers.

Successes.

The estimated value of the company went up 50% after these actions by Lighthouse and the Sonix team. The company quickly received interest form numerous outside purchasers and was ultimately sold to Danaher Corporation. Each partner was also able to achieve the option of complete exit from the business in addition to financial exit and each made their desired transition to roles inside or outside the company.

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