A key checklist item on your path to building the value, or worth, of your company and being able to command a premium valuation at time of exit, is to ensure you are aligned with key managers around the strategic direction for your business.
As we work with clients on their pathway to a future euphoric exit event, a common question is this – “are the bonus plans you offer any of your employees directly linked to what you’re trying to accomplish in your strategic plan?” Said another way, are bonus plans driving employee behaviors that you know are directly linked to what you’re wanting to accomplish with your business strategy?
Commonly, the answer we get is no and this is a missed opportunity for a better engagement and alignment of your people to your strategy and to building the long-term valuation of your business.
Here are questions to help facilitate opportunities to link your bonus plans with your strategic plan:
- What are the top KPI’s (key performance indicators) for the business and are my key managers aligned with me on them? And is there a KPI I’d like to include as part of their annual bonus?
- As I think about each department within my company, what are the top KPI’s for each and am I aligned with the department manager around these? And is there an important department level KPI I could build in to their bonus plan?
- Have I aligned my team (key managers and perhaps all employees) around what the top 3 strategic priorities are for our company in the period ahead and have I factored any of these into their bonus plans?
Each of these questions is an opportunity for you to think about how to bridge the behaviors and focus of key employees and perhaps even your broader workforce to what you’re trying to achieve with your business. Lacking this alignment is a missed opportunity to protect and build the current and future valuation of your company to help make you euphoric at time of exit.
