Strategy, particularly in the middle market, is under attack from many sides. This article outlines the benefits to middle market leaders, investors and other key stakeholders in making the commitment to a strategic mindset.

1. Middle Market Strategy in the Age of
Disruption
July 2019

2. “You must understand that there is more than one path
to the top of the mountain”
‒ Miyamoto Musashi, The Book of Five Rings
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3. Overview
Strategy offers leadership, boards of
directors, investors, and other
stakeholders a framework for filtering out
the noise of the moment and remaining
focused on the optimal value
maximization path for an individual
company.
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Disruption is inevitable, but the reaction to it is not. Strategy-minded organizations are
best positioned to recognize disruption early and make the necessary adjustments.
Source: Burst

4. Core Elements of Strategy
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• Self-Awareness: A value creation mindset
focused on an understanding of the character
of a business. Having the right question while
knowing that the answer is likely to change.
• Business Model: Testable hypothesis of the
key drivers of a business and a commitment to
foster continued improvement in those
drivers.
• Goal: Plan to achieve an objective outcome or
set of outcomes that incorporates resource
limitations, known obstacles (competitors,
market volatility, etc.) and the likelihood of
unknown challenges.
Self-
Awareness
Business
Model
Goal
Strategy is a process, not an endpoint

5. General Motors
Alfred Sloan’s reorganization of
General Motors, leading to a century
of dominance in the U.S. auto
market.
Lego Microsoft
Jorgen Vig Knudstorp’s turnaround
of Lego Group, fostered by an
understanding of the organization’s
intrinsic strengths.
Satya Nadella repositioning
Microsoft for a cloud-centric future.
Strategy in Action
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6. Abraxas Group LLC 6
Innovation Dislocation
Change is, by its very nature, Janus-faced; with new capabilities and business models
on one hand, and dislocation and value destruction on the other. While the pace is
uncertain, change is inevitable.
The Nature of Change
Source: Wikimedia

7. Threat of Disruption
Capital
Providers
Threatens to undermine investment thesis, resulting in significantly
diminished upside or outright losses.
Employees Endangers career prospects as opportunities for advancement shrink.
Suppliers Imposes significant opportunity costs through lost growth prospects.
Disruption represents different but equally terrifying threats to the varying constituencies in a company:
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Leadership Challenges ability to achieve performance goals.

8. Abraxas Group LLC 8
Disruptive Change
Source: London School of Economics

9. The Cost of Waiting
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Source: McKinsey & Company
Source: BCG Henderson Institute
Cost of Disruption Benefits of Preemption
Though change via disruption is inevitable, it is within the power of a leadership team to
determine how an organization will face change, when and in whatever form it comes.

10. David Johnson is a career change agent who has served as interim manager or financial
advisor on over $5 Billion of middle market transactions.
In his 20+ year career, David has served as an advisor, board member, interim manager,
and operator at organizations ranging in size from pre-revenue startups to Fortune 500
organizations.
David has several publications to his credit and is a regular speaker on the topics of
change management, performance improvement, turnaround, restructuring and value
creation. He received his MBA from the University of Chicago and completed his
undergraduate studies at Fairleigh Dickinson University.
Role Highlights
• Developed and led execution of a
strategic turnaround plan
• Developed growth strategy in
support of an M&A process
• Supported leadership in strategic
plan development and execution
• Interim CFO, Construction Company
(Sponsor-Backed)
• Financial Advisor, Industrial Staffing
Company
• Strategic Chair, Behavioral
Healthcare Organization
Email: david@abraxasgp.com
Ph: 312-505-7238
www.abraxasgp.com
Background
David Johnson
Abraxas Group LLC