In our work with Business Leaders change is inevitably on their radar. Whether it is change due to market conditions, competitor moves or the increasing realisation of just how fast & how much technology is disrupting the status quo. Often too succession is a challenge and at a time when the the tempo of change is increasing owners of businesses are looking at how they get out. Do they sell it or retain it under management. Could they? should they?
A business is not truly valuable until it is at stage that it is not reliant upon the owner/s. If key parts of the business have a founder who is a critical success factor either working in a day to day Management role or as the main member of the Board of Directors then it becomes challenging to sell & is a barrier to maximising the value if is to be sold. Often the owner/s & founders are in the way of the business moving to the next level. Some common reasons for this;
- An ego that won’t allow others to lead in different ways. This prevents the business getting a different outcome.
- Doing the same things over and over again……and guaranteeing the that same outcome.
- Getting good advice from their Board, trusted advisors and their management team…….and largely ignoring it.
- Getting involved at all levels of the business (Governance, Management level & at line manager level) despite paying good people to do own it. This shuts innovation down, causes frustration, confusion & disengages good talented staff.
- Continuing to make decisions based on gut feeling rather than good Key Indicators based on data & interpretation.
- A lack of planning (Strategic, Operational and contingency planning). This creates a company that is continually reactive rather than proactive & one that has a short term focus.
- Not addressing the big elephants in the room. Missed opportunity, poor performance, lack of direction, succession planning are all left out of discussions creating speculation, ambiguity and mediocrity.
- No clear roles and performance measures which allows the business to be an “average” performer.
- Ignoring systems & processes that have been introduced to streamline Finance, Operations, Sales and to allow the business to scale through consistency.
- Assuming that the Voice of the Customer of the future will be the same as it has in the past and never seeking real feedback.
- A lack of innovative thinking, ideas and development leads to ageing & mediocre products, services & Intellectual Property.
- Lack of investment into the future leaders of the company through training, mentoring and coaching. This adds to the succession problem & dooms the company to always having to seek senior leaders from outside the company.
- Create friction within the team that actively takes the focus of core business. The modern business environment is complex enough without fighting those who are on your side.
Without doubt, as a Business owner it can be very hard to recognise the issues that need to be addresses and to then start the process of getting out of the way. In fact it often does not begin until a crisis looms (such as a health scare, a major disruption to the industry, a change in the economic environment, a new competitor entering the market or the loss of a key client etc). Generally what has got the business to its current point in time will not get it to where it needs to go in the future.
The number businesses seeking to break this cycle is truly staggering & it is not for lack of understanding of the need to change. The barrier is actually “taking the action” (actually doing something about it) and being brave enough to actually get out of the way of the business and to let others lead the business to the next level.
It is not until Business Owners understand what needs to happen and start to actively get out of the way of their own business & talented staff that the magic begins to happen.
It seems everyone has a story to tell about this. They have either been that person who needed to get out of the way, or worked for them, or have been involved with someone who needs to.
What is your story?