Develop a strategic thinking muscle amongst your team to build company worth
The first step in preparing your business for a future successful exit, that will make you euphoric, is to ask yourself this question - Are me and my team thinking and dialoging at a truly strategic level or are we more tactical than we should be?
This question seems obvious and many leaders of private companies would quickly say yes, we are thinking strategically. But don’t answer too quickly. Are you truly discussing challenging near term and long term strategic questions or are you guiding the business using short term, tactical thinking that is based on information and knowledge that could be out of touch with reality.
President and General Dwight Eisenhower once said, “Plans are nothing. Planning is everything.” And more recently Mike Tyson wisely shared, “Everyone has a plan until they get punched in the face.”
The essence of these famous quotes is simply this. The real power of strategic planning is in the thinking, not the act of documenting the plan or planning. The planning aspect is simply the tactical piece that captures your thinking in a document so you can act. I’d be more willing to invest in a business where the team is excellent at thinking strategically and fair at the actual documentation/planning aspect versus a team that is weaker at the strategic thinking but great at documenting/planning their tactical thinking. Planning isn’t what is going to build the worth of your business long term, but strategic thinking can be game-changing to your company future worth.
Here are just a few strategic thinking questions to help you think more deeply about this muscle at your business:Do you clearly know the top 5-7 things a future acquirer will look at your business to see if it possesses and these top things will drive their valuation of your business?Do you clearly know the top 5-7 things a future acquirer will look at your business to see if it possesses and these top things will drive their valuation of your business?
- Do you clearly know the top 5-7 things a future acquirer will look at your business to see if it possesses and these top things will drive their valuation of your business?
- Are you clear on where your company brand and product/service offering are truly positioned in your served market – is your view of this positioning the same perception as your target customer?
- What are the top 5 decision criteria that your target customer thinks through in deciding whether to issue your company a purchase order? Have these criteria changed since COVID and might trends in your industry change them yet again?
- What step could an existing or new competitor take that could disrupt your business?
- What step could your team take that could disrupt your competitors?
- What’s your plan for the period ahead to drive more productivity out of your team/process and improve margins?
- How are specific technologies being applied in your industry and how do you anticipate they will be applied in the next several years to impact your business positively or negatively?
- Of the markets we serve (and want to serve), what is the growth trajectory of each? And what is our unique capability versus competitors that is of value to our target customers?
- What steps could we take to become “stickier” with our customers? Could we build our stickiness either as a result of a uniqueness in our product or service and/or through the customer experience we deliver?
Don’t rush in to planning, which is ultimately just documenting your thinking. Focus on THINKING strategically first. Start by identifying strategic questions you have about your business that your answers need to be refreshed or you realize you don’t have effective answers for. Building the long-term worth of your business doesn’t just happen by luck. If you’re looking to be euphoric one day by a third party paying you handsomely for your company, then start today with building the strategic thinking muscle of yourself and your key managers. Reward your future self by building the gift of strategic thinking today.