Why Some Companies Grow — And Others Get Stuck

 

Over 40 years of consulting at The Mead Consulting Group with hundreds of private companies, I've seen a clear pattern: industry, size, and the economy aren't what determine success. The real difference comes down to how companies are led and built.  Here are 8 traits that separate growth companies from the rest:  1. Be clear: Lifestyle or Equity Value? Are you running the business for cash flow and personal flexibility — or building something with scalable, sellable value? Neither is wrong, but straddling both guarantees you'll underperform on each. See the article Which Do You Have – a Lifestyle Business or an Equity Value Business? It’s Important to Know the Difference  2. Empower your employees. Companies can't grow beyond a certain point if all real decisions stay with the owner. Growth companies build cultures where people can make decisions — and learn from mistakes.  3. Hire for the next level. Don't just hire for today's needs. Bring in talent that can manage 1–2 levels higher. Paying more for top talent more than pays for itself.  4. Develop flexible strategies you can execute well. Ditch the rigid annual plan. Some companies revisit strategy every 8–12 weeks. The best companies rehearse responses to multiple future scenarios through periodic scenario planning exercises.  5. Build an adaptable organization. Create a culture and leadership team that can react quickly and course-correct when the market shifts.  6. Focus on a superior customer experience. Call it "emotionally connected" clients or "under-promise, over-deliver." Growth companies build systems to wow the customer at every touchpoint.  7. Play offense, not defense. Years of cost-cutting creates a culture of "NO." Growth companies replace it with "HOW" - constantly testing new models, products, and projects.  8. Develop a Board of Advisors to help you think through key decisions.  The bottom line: Examine your company honestly. Are you living these traits — or just surviving?  ________________________    The Mead Consulting Group helps dozens of companies and organizations -like yours - every year with both strategic planning & execution, strategic business coaching, and preparing to maximize value in an exit. Clients that utilize these processes consistently outperform their competition.  If you would like to discuss your situation, please contact me to set up a complimentary meeting. Dave Mead at (303)660-8135 or meaddp@meadconsultinggroup.com.   Best regards, Dave Mead

Which Do You Have – a Lifestyle Business or an Equity Value Business?

 It’s Important to Know the Difference

In speaking to a group of business owners recently about defining their business vision, I suggested that they be clear about whether they want an "equity value business" or a "lifestyle business", because the way they approach building a business would be very different depending on how they will define success. 

 The Lifestyle Business. The term “lifestyle entrepreneur” was coined in 1987 by William Wetzel, a director emeritus of the Center for Venture Research at the University of New Hampshire. Mr. Wetzel was using it then to describe ventures unlikely to generate economic returns robust enough to interest outside investors. In financial jargon, “there's no upside potential for creating wealth," he explains.

 "Lifestyle ventures are usually ventures that are run by people who like being their own bosses," Wetzel says. "But they're in it for the income as well. Indeed, lifestyle entrepreneurs offer a different...view of success than those who are mainly focused on longer-term wealth accumulation.

 Lifestyle businesses are businesses that are set up and run by their founders primarily with the aim of sustaining a particular level of income and little more; or to provide a foundation from which to enjoy a particular lifestyle. Some types of enterprises are more accessible than others to the would-be lifestyle business person. Those requiring extensive capital are difficult to launch and sustain on a lifestyle basis; others such as small “creative” businesses are more practical for sole practitioners or small groups such as husband-and-wife teams.

 Lifestyle businesses typically have limited scalability and potential for growth. In conventional business terms, lifestyle businesses typically have limited scalability and potential for growth because such growth would impair the lifestyle for which their owner-managers set them up. However, a lifestyle business can and do win awards and provide satisfaction to its owners and customers. These are firms that depend heavily on founder skills, personality, energy, and contacts. Often their founders create them to exercise personal talent or skills, achieve a flexible schedule, work with other family members, remain in a desired geographic area, or simply to express themselves. But without the founder’s deep personal involvement, such businesses are likely to, well, founder. Professional investors therefore rarely get involved with lifestyle businesses. A lifestyle business is also one that can allow the owner to call his/her own shots and to move at his/her own pace. It’s a business that fits his/her current way of living rather than dictating how things ought to be done. For millions of people, these sorts of small ventures are an excellent way to “do what you love.”

 The Equity or Value Business. Equity can be defined as: A company's assets, less its liabilities, which are the property of the owner or shareholders.  Popularly, equities are stocks and shares which do not pay interest at fixed rates but pay dividends based on the company's performance. The value of equities tends to rise over the long term, but in the short term they are a risk investment because prices can fall as well as rise.

 An equity or value business is one where the owner intends to build real assets with a grow-able, tangible value that can be bought and sold - either as shares or the entire business. Success would be defined as the increase in value of the business over time. These businesses by definition will be built to succeed without the presence of the owner(s). In many cases, current lifestyle of the founder/owner is sacrificed in order to build significant long term value. In equity value businesses, owners focus more on building value as seen by potential buyers: sustained improvements in revenue/EBITDA, strong management team that can operate and grow the business without the owner’s constant involvement,

By contrast, a lifestyle business is one where the entrepreneur seeks to generate an "adequate" income while living where s/he wants, doing what s/he loves, or having the flexibility to be around when the kids or grandkids come home from school or take long weekends in the winter to go skiing. Success would be defined as an increase in satisfaction with one's life over time.

It’s imperative to decide which one you are. These are very different scenarios. "Equity value or lifestyle" is one of those fundamental decisions you should make early in your company’s history. If you're contemplating going into business with a partner, determine if you both would answer the same way. So why is it important to decide? Businesses that do not have a clear understanding of the type of business they want – and are prepared to suffer inferior returns. Going down a path that straddles both lifestyle and equity value camps is sure to generate both lower current cash (compensation for the owners) as well as lower growth and value potential (lower equity value). Consider one company with an innovative product in the education products space. The founder had a stated goal of building a value business. However, actions demonstrated to key employees and managers that the true motives of the founder were to facilitate lifestyle. A confused culture prevailed. Top employees and managers interested in growth left the company, leaving a cadre of lower performers, interested in maintaining the status quo. The company growth and profitability lagged and the company ceded its leadership position to more aggressive competitors. In the end this company accomplished neither growth in value nor an exceptional lifestyle for the owners.

 Be honest with yourself about your appetite for risk, your need for autonomy, your desire for current compensation. In the end, neither is good or bad. It's just, which one is for you?

 

The next selling cycle may be near

[Editor’s Note: The M&A market for lower middle market and middle market companies (under $250M in revenue) has been relatively stagnant for the past two years. With professionals expecting two to three rate cuts this year, plus the enormous amount of capital on the sidelines (both private equity and strategic), late 2026 and 2027 look very promising for well-prepared companies looking to go to market.              -dpm]

The exit sales process may take longer than you think. With credit markets still tight and many buyers sitting on the sidelines, it may seem counter-intuitive to be writing about preparing your company to be ready to sell. However, there are record levels of capital, sitting as dry powder, and interest rates are coming down. Many professionals believe the next major sales cycle will begin during 2026 and extend through 2027.

While some business owners may believe they can pull the string when they are ready to sell, the truth is, for many business owners, the exit sales cycle may take several years to execute. In order to sell at highest value, the process includes time to get ready, 1 year for the transaction, and then you may have to spend 3 years or more with the company after the sale.

Much of the preparation can be accomplished in advance. Companies can focus on making fundamental improvements to their business that will help them be healthier and more prepared than their competitors.

1. Focus on customer net profitability

2. Upgrade management

3. Cleanup business processes

4. Develop a strategic growth and execution plan

 Focus on customer net profitability. The tendency for many business owners is to cling to any customers and revenue no matter the profitability level. A common comment is that “at least they absorb overhead.” The notion of unprofitable business absorbing overhead may be one of the greatest false beliefs in business. In many cases, overhead that has been viewed as fixed is really a cost that can be minimized or shed. Carrying unprofitable business will be a continuing cash drain that may inhibit your business’ ability to continue to grow. Additionally, removing unprofitable business adds to your EBITDA.

Upgrade management. While velocity is slow in the labor market today, there is a great supply of good talent stuck in their current companies. In many cases this may be talent that would not be available in better times. Take advantage of the opportunity to improve. Similarly, this is a great opportunity to review all of your employees and weed out those with below average performance, poor potential, or unrealized potential. Our clients use a simple tool to rank all employees in terms of potential and performance – the results make it very clear which ones have been a drag on the company.

Cleanup business processes. During boom times, some companies claim they are too busy to scrutinize business processes, to make improvements, and to streamline workflow in order to increase throughput. That “excuse” leads to suboptimal performance.

Develop a strategic growth and execution plan. You need a plan that will allow you to be agile enough to take advantage of opportunities and will be attractive to a prospective buyer.

Take a lesson from the Boy Scouts: Be prepared. These steps can add value to your business. Your business can accelerate faster and be well- positioned. Well-prepared businesses are always more attractive and sell first as the market heats up. Those businesses will find a hungry group of buyers and investors who have been sitting on their hands during 2023, 2024, and 2025.

____________________

 The Mead Consulting Group helps dozens of companies and organizations -like yours - every year with both strategic planning & execution, strategic business coaching, and preparing to maximize value in an exit. Clients that utilize these processes consistently outperform their competition.

 If you would like to discuss your situation, please contact me to set up a complimentary meeting. Dave Mead at (303)660-8135 or meaddp@meadconsultinggroup.com.

The Importance of Experience When Teaming with AI in Strategic Planning for Lower Middle Market Companies

[Editor's Note: Lower Middle market companies have unique characteristics that require critical thinking and experience to yield the best results when using AI in strategic planning. We hope you find this article useful - dpm] Artificial intelligence is rapidly reshaping how companies approach strategic planning. From market analysis to scenario modeling, AI tools promise faster insights, broader perspectives, and more data-driven decision-making. For lower middle market companies—often operating with lean teams, limited resources, and high execution risk, the appeal is clear. Yet AI is not a strategist. In the lower middle market, experience is essential when using AI in strategic planning, and that experience often comes not only from internal leadership but from an experienced strategic planning consultant who understands both the tools and the terrain. The strongest outcomes emerge when AI is paired with seasoned judgment—internally and externally.  AI Is a tool, not a decision-maker or a substitute for judgement. AI excels at processing large volumes of information, identifying trends, and generating strategic options. It can evaluate markets, analyze customers, model pricing, and stress-test assumptions far faster than traditional approaches. What AI cannot do well is understand organizational culture, leadership dynamics, or execution realities. It lacks awareness of past initiatives, informal decision-making structures, and the human factors that often determine whether a strategy succeeds or fails. Experienced leaders—and experienced consultants—know that strategy rarely fails because of poor analysis and often fails because of misalignment, timing, or execution. AI informs decisions; experience determines whether those decisions are realistic and actionable. Lower middle market companies have some unique characteristics. Many AI tools are trained on generalized datasets reflecting public companies or large enterprises. Lower middle market firms operate under very different conditions where customer concentration is higher, management teams are lean, systems and data are imperfect, and capital decisions can be existential. An experienced strategic planning consultant brings pattern recognition from dozens of similar companies and situations. They understand that what might work at scale often breaks at $20–$100 million in revenue. Their role is to translate AI-generated insight into strategies that fit the company’s true constraints—leadership bandwidth, cash flow sensitivity, and owner risk tolerance. Experience shapes better questions. AI’s usefulness depends heavily on the quality of the questions (prompts) it is asked. Knowing which questions matter—and which assumptions to challenge—is a function of experience. Seasoned consultants help leadership teams: ·    Frame the right strategic questions. ·    Identify blind spots in internal thinking. ·    Challenge data that looks precise but is directionally wrong. ·    Focus on decisions that will actually move the needle and add value. For example, AI may suggest aggressive geographic expansion based on market growth data. An experienced consultant may recognize that talent limitations, customer service risk, or operational complexity make that path dangerous. Experience reframes the discussion from “Where can we grow?” to “Where can we grow without breaking the business?”  Pattern recognition matters more than prediction. AI is effective at prediction based on historical data. Experienced consultants contribute something different: pattern recognition shaped by real outcomes across multiple companies and cycles. They have seen: ·    Strategies that looked compelling but failed in execution. ·    Growth initiatives that strained culture or cash flow ·    M&A plans that underestimated and inadequately planned for integration risk. This perspective allows consultants to act as a strategic filter—helping teams avoid attractive but unwise paths. In the lower middle market, avoiding the wrong move can be as valuable as selecting the right one. Speed requires judgment and facilitation. AI dramatically accelerates strategic planning by enabling teams to test more scenarios in less time. However, speed without judgment increases risk. An experienced consultant plays a critical facilitation role by: ·    Slowing decisions that require alignment. ·    Helping teams prioritize clarity over optimization. ·    Ensuring strategy translates into executable initiatives with clear accountability. They use AI to broaden thinking and pressure-test assumptions, while applying experience to determine what deserves action. This balance is essential in environments where recovery from a bad decision is costly. Strategy is also about Trust and Alignment. In many lower middle market companies, strategy is a trust exercise involving boards, lenders, family owners, and employees. Data alone does not create confidence. Experienced consultants bring credibility, objectivity, and the ability to translate AI-driven analysis into clear, human narratives. They help to align stakeholders, manage differing agendas, and ensure the strategy is understood and owned—not just approved. The future of strategic planning in the lower middle market is not AI-driven or consultant-driven—it is collaborative. The strongest results come when leadership teams, experienced consultants, and AI tools work together. Companies that succeed will not be those that adopt AI fastest, but those that integrate it thoughtfully with seasoned leadership and external perspective. We can help.  Mead Consulting Group has worked with scores of organizations and leaders to help them move to develop a highly- functioning management team that plans and acts strategically and accomplishes its goals. If you would like to learn more about how we can help your organization, please contact me at meaddp@meadconsultinggroup.com or (303)660-8135. For more information, see some of our success stories with organizations from $10M to $250M.  Best regards, Dave Mead

Cleaning up data is the critical prerequisite for AI Adoption

[Editor's Note: Artificial intelligence (AI) is often heralded as the next frontier for business transformation. From predictive analytics to automated decision-making, AI promises efficiency, insight, and competitive advantage. the true foundation for AI adoption, however, lies in something less glamorous but infinitely more critical: clean, reliable data. Don't spend money and resources on AI until you do this first. We hope you find this article useful. dpm]

Why Data Quality Matters Before AI

AI systems thrive on data. These tools all require large volumes of accurate, consistent, and well-structured information. If the underlying data is riddled with errors, duplicates, or inconsistencies, the outputs will be flawed. In short: garbage in, garbage out.

For lower middle market companies, which often operate with lean resources and fragmented systems, the risks of poor data hygiene are amplified. Unlike large enterprises with dedicated data governance teams, these companies may rely on legacy systems, manual processes, or siloed databases. Without a deliberate effort to clean and standardize data, AI initiatives can stall or fail outright.

Common Data Challenges

Several recurring issues plague data environments in the middle market:

•           Fragmented Systems: Customer, financial, and operational data often reside in separate platforms with little integration.

•           Manual Entry Errors: Reliance on spreadsheets or manual input increases the likelihood of typos, duplicates, and missing fields.

•           Inconsistent Standards: Different departments may use varying formats for dates, product codes, or customer identifiers.

•           Legacy Infrastructure: Older ERP or CRM systems may lack modern APIs or data export capabilities.

•           Limited Data Governance: Few companies in this tier have formal data governance policies, leading to ad hoc practices.

These challenges create a data environment that is messy, unreliable, and ill-suited for AI-driven insights.

 

Cleaning up data is not just a technical exercise—it is a strategic imperative. Data cleanup is the bridge between current operations and future AI-driven transformation.

•           Improved Decision-Making: Reliable data enables accurate forecasting, pricing strategies, and customer segmentation.

•           Operational Efficiency: Eliminating duplicates and errors reduces wasted time and resources.

•           Regulatory Compliance: Clean, auditable data supports compliance with financial reporting and privacy regulations.

•           Enhanced Customer Experience: Consistent customer records allow for personalized marketing and seamless service.

•           AI Readiness: Most importantly, clean data provides the foundation for machine learning models to deliver meaningful insights.

Steps to Effective Data Cleanup

1.         Audit Existing Data - Begin with a comprehensive inventory of all data sources—ERP systems, CRMs, spreadsheets, and external feeds. Identify redundancies, inconsistencies, and gaps.

2.         Define Standards – Establish company-wide rules for formats, naming conventions, and validation.

3.         De-duplicate and Normalize – Use tools to eliminate duplicate records and standardize values.

4.         Implement Validation Rules – Automate checks to prevent errors at the point of entry.

5.         Integrate Systems – Connect disparate systems through APIs or middleware to reduce silos.

6.         Establish Data Governance – Assign data stewards to oversee quality and enforce standards.

7.         Monitor Continuously – Implement ongoing monitoring and periodic audits to maintain quality.

Technology can help with data cleanup

Fortunately, technology solutions are increasingly accessible to lower middle market firms. Cloud-based data management platforms, ETL (extract, transform, load) tools, and AI-powered cleansing software can automate much of the heavy lifting. Many vendors now offer scalable solutions tailored to mid-sized businesses, reducing the need for large upfront investments.

Data cleanup is not solely a technical challenge—it requires cultural buy-in. Employees must understand the importance of accurate data and commit to following standards. Leadership should frame data quality as a strategic priority, linking it directly to growth, efficiency, and AI readiness. Training and communication are essential to embed data hygiene into daily operations.

The Strategic Payoff: AI as a Growth and Productivity Lever

Once data is clean, AI can deliver transformative benefits for lower middle market companies:

•           Predictive Analytics: Forecast demand, optimize pricing, and anticipate customer churn.

•           Process Automation: Streamline repetitive tasks in finance, HR, and operations.

•           Customer Insights: Personalize marketing campaigns and improve retention.

•           Risk Management: Detect anomalies in financial transactions or supply chain disruptions.

 

For lower middle market companies, the promise of AI is real—but it cannot be realized without clean data. Data cleanup is the prerequisite, the foundation, and the non-negotiable first step. By auditing, standardizing, and governing their data, firms position themselves to harness AI as a genuine engine of growth and efficiency. In the race toward digital transformation, the winners will not be those who adopt AI first, but those who prepare their data best.

 

We can help.  Mead Consulting Group has worked with scores of organizations and leaders to help them move to develop a highly- functioning management team that plans and acts strategically and accomplishes its goals. If you would like to learn more about how we can help your organization, please contact me at meaddp@meadconsultinggroup.com or (303)660-8135.

For more information, see some of our success stories with organizations from $10M to $250M.

Five New Approaches CEOs Are Adopting to Strategic Planning: How Lower Middle Market Leaders Are Reimagining Strategy with AI

[Editor's Note: With all the hype around AI, itis difficult for Lower middle market leaders to know how to proceed. Some are moving forward with Operational efficiency initiatives. Leading firms are utilizing AI to reimagine strategic planning. I hope you find this article useful. dpm]

1. Move from Annual to Rolling Strategy

Leading lower middle market firms are moving away from rigid, once-a-year strategic plans. Instead, they are embracing rolling 12- or 18-month roadmaps. These evolving plans are reviewed and updated periodically, typically with quarterly check-ins. By leveraging AI dashboards, leadership can now monitor key leading indicators such as sales velocity, customer churn, and working capital trends. These systems automatically highlight deviations from the plan, enabling real-time adjustments rather than waiting for an annual offsite review. As a result, strategy becomes a dynamic, ongoing process rather than a static event.



2. Use AI-Driven Scenario Modeling

Generative and predictive AI tools are now capable of simulating thousands of "what if" scenarios within seconds. For example, leaders can instantly evaluate outcomes such as, "What happens if we raise prices by 3%?" Rather than relying on static spreadsheets, CEOs receive a range of possibilities, each supported by data-driven probabilities. This approach transforms the planning process, taking it from speculative guessing to informed simulation.

3. Run AI-Augmented Strategy Workshops

The next generation of strategic planning sessions integrates AI as an active participant. Imagine uploading company data—such as profit and loss trends, customer segments, and regional performance—into an AI model designed to uncover new opportunities. The AI might identify which markets offer the highest profit velocity, suggest where pricing or discount structures can be optimized, or highlight internal inefficiencies that are quietly reducing margins. The leadership team then reviews and interprets these insights. Importantly, AI does not replace human judgment; it helps sharpen and focus it.

4. Establish Governance and Explainability

As AI becomes more embedded in decision-making, transparency is critical. Stakeholders such as boards, lenders, family owners, and private equity owners need to understand how AI is influencing choices and how its recommendations are validated. Establishing basic governance practices—like documenting data sources, validating models, and ensuring human review—builds trust in AI-driven decisions. This also ensures the company remains compliant and protects its reputation as AI's role expands.

5. Measure AI’s Impact Like Any Other Investment

AI should be treated as a strategic asset, not just an experiment. To do this, CEOs set clear metrics to evaluate AI’s effectiveness, such as improvement in forecast accuracy, reduction in planning cycle time, the return on investment of AI-informed initiatives, and efficiency gains in decision-making. Ultimately, it needs to lead to better execution. When these measurements show positive results, adoption of AI naturally accelerates across all business functions.

The Leadership Shift

AI doesn’t eliminate the need for leadership - it amplifies it.

For CEOs in the lower middle market, the most significant change is not technological, but cultural. This shift means moving from plans to learning systems, from certainty to experimentation, from forecasting to sensing, and from control to agility. AI can make an organization smarter, but only if its leaders become more adaptive—willing to adjust, test, and refine their approach continuously.

• From Plans to learning systems
• From Certainty to experimentation
• From Forecasting to sensing
• From Control to agility

The best-performing firms will be those where AI is not only part of the technology stack but also embedded in how the CEO and leadership team think about thinking.



The Bottom Line – It’s all about results!

The lower middle market is grounded in pragmatism, valuing execution over hype and results over rhetoric. This pragmatic approach makes it an ideal environment for AI adoption.

The focus is not on futuristic automation or replacing people, but on enhancing decision-making, improving foresight, and enabling agility in a fast-moving market where both risks and opportunities abound.

Companies that view AI as a strategic partner, rather than just a cost-saving tool, will be better equipped to plan effectively, pivot quickly, execute with better focus, and build a lasting competitive advantage. 

We can help.  Mead Consulting Group has worked with scores of organizations and leaders to help them move to develop a highly- functioning management team that plans and acts strategically and accomplishes its goals. If you would like to learn more about how we can help your organization, please contact me at meaddp@meadconsultinggroup.com or (303)660-8135.

For more information, see some of our success stories with organizations from $10M to $250M.

Best regards,

Dave Mead   

Six CEO traits that inhibit growth

 Six CEO traits that inhibit growth

[Editor’s Note: Many small and lower middle market businesses have early success due to the personalities, vision, and skills of the Founder or CEO. However, some of the very traits that may help build early success, can prevent the organization from being able to scale. This is an excerpt from Chief Executive magazine (8/26/2025) -dpm]

 Below are six CEO traits that inhibit a business’ ability to scale. The symptoms include: 

1.     Micromanagement. Difficulty delegating tasks or trusting others with decision-making.

2.     Resistance to change. Reluctance to adopt new systems, processes or leadership structures.

3.     Identity fusion. The founder or CEO sees the organization as an extension of themselves, making objective decisions difficult.

4.     Over-centralization. All decisions funnel through the founder or CEO, slowing down operations.

5.     Poor succession planning. Avoidance of planning for leadership transitions or grooming successors.

6.     Emotional decision-making. Decisions driven by personal attachment rather than strategic thinking. 



During periods of uncertainty and stress, organizations can revert to known behavior and may have a tendency to centralize decision-making or other counter-productive traits.

We can help.  Mead Consulting Group has worked with scores of organizations and leaders to help them move beyond these traits to develop a highly- functioning management team that plans and acts strategically and accomplishes its goals. If you would like to learn more about how we can help your organization, please contact me at meaddp@meadconsultinggroup.com or (303)660-8135.

For more information, see some of our success stories with organizations from $10M to $250M.