The failure mode in middle market companies is rarely a shortage of ideas. It is the opposite. Owners and leadership teams sit on a list of genuinely attractive moves: new markets, adjacent product lines, an acquisition someone brought to the table, a hire that would open a channel. Each one survives scrutiny on its own merits. What none of them survives is arithmetic. There is one management team, one balance sheet, and one calendar. Walt Gilligan, founder of the independent advisory firm In Position, builds his entire approach around that constraint rather than around the ideas themselves. “Most middle market companies have more good options than they have the capacity to pursue well,” he says. “That is what makes the strategy hard. Every real choice costs you something else.” That sentence reframes the advisory problem. The work is not generating options. It is killing them, deliberately, and concentrating what remains.
The Value of Saying It Out Loud
The first move in Gilligan’s sequence is to distill, which he defines as separating what matters from what demands attention. The distinction is sharper than it sounds. Most of what occupies a leadership team’s week is legitimate. It has a customer attached, or a deadline, or a board member who asked about it. Legitimacy is not the test. Consequence is. The question Gilligan puts in front of a team is which two or three things genuinely move enterprise value, and everything failing that filter is noise regardless of how reasonable it looks in isolation.
What makes this harder than a prioritisation exercise is the second half of what he describes: “What they need is someone to help them see which two or three things genuinely move enterprise value, and to say the rest out loud so it stops consuming your calendar.” Saying the rest out loud is the part organisations skip. Deprioritised initiatives rarely die. They go quiet, keep a sponsor, keep a slice of someone’s week, and reappear at the next planning cycle with the same case attached. Naming them explicitly as things the company is not doing is the only mechanism that truly frees the capacity. Gilligan is careful about where the value of an outsider sits in this. “Most leadership teams already know their business better than any advisor will,” he says. The advisor is not there to supply knowledge. He is there to force the choice that people who work inside the business every day have every incentive to defer.
Ambition Has to Meet Capacity Somewhere
Allocation follows, and Gilligan’s definition of it is broader than the one most finance functions use: “We allocate capital, we allocate capabilities, and we allocate management attention. Those are scarce resources.” Capital gets governed. Capability and attention almost never do, and they are usually the binding constraint. A company can fund three initiatives comfortably and still fail all three because the same operator is accountable for each, or because the one team that can execute is already committed. Treating attention as a budget line with a hard ceiling changes which plans survive.
Then comes the test that most strategy processes are designed to avoid. “We test those choices honestly and rigorously against what the organisation can actually execute. Ambition and capacity, they have to meet somewhere.” That meeting point is uncomfortable by design, and it is where advisory work either earns its fee or becomes decoration. A plan that assumes an organisation will operate at a standard it has never demonstrated is not a plan; it is a forecast of a different company. Gilligan’s phrasing implies the reverse discipline: size the ambition to the machine you have, or be explicit that building the machine is itself one of the two or three things. Concentration is the point. Resources go behind the choices with the greatest consequence, which is only possible once distillation has established what those are.
Advantage is the Thing a Buyer Cannot Copy
The third stage is where the sequence pays off. Gilligan defines advantage tightly: “Advantage is a capability or position that competitors find hard to reproduce.” Difficulty of reproduction is the whole test. Performance that a competitor can match by spending money or hiring people is a result, not an advantage, and it does not hold its value under scrutiny. What is hard to copy is what converts into “higher margins, durability, and options.” Margin without durability is a good year. Durability is what turns a good year into a multiple.
The last piece is the one owners tend to underweight. “It shows up in what a buyer will pay and just as much in the freedom to hold, invest, or wait.” Value creation is usually framed around exit, as if the number only exists at the moment of sale. Gilligan’s framing separates the two. Optionality is the real asset, because a company with genuine advantage is never negotiating from need. It can transact, or decline to, and both are live choices. That freedom is not produced by an event or a process run in the final year before a sale. “Enterprise value accumulates through those choices made along the way,” he says. Distill, allocate, advantage, value, in that order, because each stage is worthless without the one before it. Allocation without distillation just spreads resources across everything. Advantage without allocation never gets built. And value, in Gilligan’s account, is not something a company pursues directly. It is the residue of a long series of decisions about what not to do.
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