Tuesday, January 10, 2023

Don't miss the opportunity to sell during the next upturn

 [Editor's note: The boom market for sellers may be over. Interest rates are climbing, the stock market is down. The good, experienced Investment bankers and M&A professionals tell us that unless you have a high-performing company in a highly desirable market, this is NOT the time to sell your business, as valuations continue to fall for companies other than those top performers. They advise companies to spend the time during 2022 and 2023 getting the company in the best shape so that you are ready for the next good M&A market in 2024 -2025.


Some folks believe we are already in a recession. If not yet, many economists expect the next downturn as early as 2023. No one knows for sure. However, there is one thing for sure - if you missed the favorable opportunity to sell once, do not let it happen again.   -DPM]

 Don't miss the opportunity to sell during the next upturn

The full exit sales process may take several years. With credit markets tightening, the economy likely heading into recession, and uncertainty everywhere, it may seem counter-intuitive to be writing about preparing your company to be ready to sell during the next economic upturn.

While some business owners may believe they can pull the string when they are ready, the truth is, for many business owners, the exit sales cycle may take several years to execute. Professionals will tell you that in order to sell at highest value, the process includes 1-2 years to get ready, up to 1 year for the transaction, and then you may have to spend another 3 years with the company after the sale.

Much of the preparation can be accomplished during a down cycle. Companies can focus on making fundamental improvements to their business during the downturn that will help them emerge faster and healthier than their competitors.
1. Focus on customer net profitability
2. Upgrade management
3. Cleanup business processes
4. Develop a strategic growth and execution plan
5. Position the company for the upturn
6. Never waste the opportunity of a good downturn

Customer net profitability.
The tendency during a downturn is to cling to any customers and revenue no matter the profitability level. A common comment is that "at least they absorb overhead." The notion of unprofitable business absorbing overhead may be one of the greatest false beliefs in business. In many cases, overhead that has been viewed as fixed, is really a cost that can be minimized or shed. Carrying unprofitable business will be a continuing cash drain that may inhibit your business' ability to grow as the economy improves.

Upgrade management.
There may be a better supply of good talent available in the marketplace as the economy sours. In many cases, this may be talent that has not be available in better times. Take advantage of the opportunity to improve. This is also a great opportunity to review all of your employees and weed out those with below average performance, poor potential, or unrealized potential. Our clients use a simple tool to rank all employees in terms of potential and performance - the results make it very clear which ones have been a drag on the company.

Cleanup business processes. During boom times, many companies claim they are too busy to scrutinize business processes to make improvements and streamline to increase throughput. That "excuse" typically does not apply during a downturn.

Develop a strategic growth and execution plan. You need a plan not only to help you survive the downturn, but also that will allow you to be agile enough to take advantage of opportunities in the recovering marketplace. There may be market segments that will be slow to come back; some may never come back the same way. Other market segments, however, may present huge new opportunities. Your organization needs to develop a plan and be prepared to execute.

Position your company for the next upturn.
The most significant competitive gains are made during a downturn. Companies that are prepared and well-positioned can accelerate very quickly as he markets healthy. Competitors that are under stress during the downturn will actually be under greater stress as the economy improves. Cash demands can be low when demand is low. Cash needs, however, will increase as the economy improves. Companies will need cash to hire more people, invest in inventory and equipment, etc. 

Never waste the opportunity of a good downturn
During downturns, companies have the opportunity to examine everything, reduce unnecessary expenses, trim those under-performers, examine unprofitable business, streamline business processes, etc. 

Take a lesson from the Boy Scouts: Be prepared.
These steps can add value to your business - even during a downturn. When the economy improves, your business can accelerate faster and be well- positioned. The market for selling a business will be ripe in late 2010 and 2011. Those businesses that are ready will find a hungry group of buyers and investors who have been sitting on their hands during the recession.
_______________________ 
What's the old saying - "Miss your chance once, it's a shame; Miss twice, shame on you!"

We can help. If you have not yet prepared your company ready for sale, we can help. The Mead Consulting Group has been helping companies prepare to maximize value for exit for many years. We have helped over 60 client companies successfully sell outright or recapitalize their business to take "chips off the table." See what some clients have said about their experience with Mead Consulting.

Sunday, January 8, 2023

Barrier#6: Lack of true accountability - Overcoming Barriers to Planning and Execution

 [Editor's Note: In Issues for Growth Vol. 31, No.11, we asked the question, "Are there barriers blocking your successful growth and execution?" We then listed the Barriers to successful Planning and the Barriers to successful Execution. We are continuing a series of Issues for Growth where we will tackle each of these barriers and identify ways to overcome each. We continue with Barrier #6. -dpm]

Overcoming Barriers to Planning and Execution -
Barrier#6: Lack of true accountability
Over time, every organization will create barriers to success. The very things that made you successful as a startup or growing organization may prevent you from being successful at the next level.

Barriers to Planning Success
  •          History of only partially developing plans
  •          History of unreasonable expectations and unachievable goals
  •          Lack of internal understanding about customers, competitors, and the market
 
Barriers to Execution Success
  •          Gaps in management depth
  •          History of abandoning projects
  •          History of lack of openness and poor communications
  •          History of poor delegation and leadership development
  •          Lack of true accountability

Barrier#6: Lack of True Accountability
We have a saying at Mead Consulting: " A good plan flawlessly executed beats an excellent plan poorly executed every time"

What are the characteristics of this barrier in an organization? Do any of these look familiar?

  • Unclear Vision and Direction: Employees do not know keys to company success- or they all have different views as to what they are.
  • Goals may be unclear, confusing, or there are too many different goals
  • "We keep adding initiatives and projects and never take anything off the list."

  • Micromanaging or Command and control: Employees do not feel they have control over how to deliver results

  • Lack of Job Understanding or Training: "I have never been shown what is expected"; "I didn't receive any training"

  • Employees don't know where to go for help

  • Employees feel Undervalued: "No one cares about my opinion." People do not feel their opinion is valued - that is, every employee

  • People do not feel comfortable delivering bad news such as the "project is behind schedule" or "we have a major quality problem." So they ignore or sugarcoat things.

  • People do not feel trusted.
  • "I am not confident my efforts will be rewarded"
  •  "I suspect that my manager (or the company leader) may take advantage of me"
  • "I question my manager's (or the company leader's) motives"
  • "I am sure they will take credit for my accomplishments"

  • Departments do not cooperate with each other. We constantly practice the "blame game"

  • Employees are Not Engaged - "People do just enough to get through the day."

  • Loyalty and seniority are valued higher than performance


The impact on an organization - A lack of accountability can paralyze an organization

Overcoming this barrier - Strategic Planning and establishing action plans is not worth much in an organization that lacks accountability. Why spend time and resources developing strategic initiatives if you can't hold the organization accountable for achieving them. The Mead Consulting Group doesn't start strategic planning and execution in an organization without a clear path to accountability.

Additional Resources -We ran a series of articles in 2018 on Accountability
 

Identifying the barriers to planning and execution is critical. Companies that have addressed the barriers are amazed at how much more their management teams are engaged and how the process energizes the entire organization. CEOs of companies that have had years of poor planning and execution history, find that their organizations are far more capable than they ever imagined of achieving superior results.

The Mead Consulting Group has helped many companies identify and overcome the barriers to successful planning and execution.
Our Customer Forward TM Strategic Growth & Execution process is simple and effective at uncovering the key obstacles and barriers and developing recommendations for improvement - then laying out the best strategic path. Finally, validating that strategic growth & execution plan with customers and the market.

If you would like to have a conversation about this, please contact Dave Mead at (303)660-8135 or meaddp@meadconsultinggroup.com.

Monday, January 2, 2023

Barrier # 5: History of lack of openness and poor communications - Overcoming Barriers to Planning and Execution

 

[Editor's Note: In Issues for Growth Vol. 31, No.11, we asked the question, "Are there barriers blocking your successful growth and execution?" We then listed the Barriers to successful Planning and the Barriers to successful Execution. We are continuing a series of Issues for Growth where we will tackle each of these barriers and identify ways to overcome each. We continue with Barrier #5. -dpm]


 

Over time, every organization will create barriers to success. The very things that made you successful as a startup or growing organization may prevent you from being successful at the next level.



Barriers to Planning Success

·              History of only partially developing plans

·              History of unreasonable expectations and unachievable goals

·              Lack of internal understanding about customers, competitors, and the market

 Barriers to Execution Success

·              Gaps in management depth

·              History of abandoning projects

·              History of lack of openness and poor communications

·              History of poor delegation and leadership development

·              Lack of true accountability

 Barrier#5: History of lack of openness and poor communications

Solid execution of a strategic plan ultimately comes down to each member of the team doing his/her part to support the key strategic imperatives. To accomplish that each team member must have a clear understanding of how they fit.

Companies with a history of a lack of openness and poor communications typically fail to communicate to all levels of the organization in simple, direct terms, and to follow-up to ensure that goals and objectives at each level align with the key strategies. They also fail to reinforce these key strategies with constant communication - using multiple means - to keep the important direction in front of all employees.

 What are the characteristics of this barrier in an organization?

·     Ask various employees what the top three goals of the organization and you will get the following responses: "I don't know"; "To make money" or a mixed bag of other responses that do not match those developed at the top of the organization.

 The impact on an organization

·     Disengaged employees, or those with oars rowing in different directions.

Overcoming this barrier

·     Change your planning and execution process to include:

·     Involve multiple levels in the planning process

·     Align strategies with company vision

·     Communicate strategies in understandable language

·     Integrate strategic plans, annual performance plans and goals, and other relevant budget, finance, and acquisition plans

·     Contain measurable and observable performance targets

·     Establish means for frequent communication, reinforcement and feedback

 Identifying the barriers to planning and execution is critical. Companies that have addressed the barriers are amazed at how much more their management teams are engaged and how the process energizes the entire organization. CEOs of companies that have had years of poor planning and execution history, find that their organizations are far more capable than they ever imagined of achieving superior results.

 The Mead Consulting Group has helped many companies identify and overcome the barriers to successful planning and execution.

Our Customer ForwardTM Strategic Growth & Execution process is simple and effective at uncovering the key obstacles and barriers and developing recommendations for improvement - then laying out the best strategic path. Finally, validating that strategic growth & execution plan with customers and the market.

 If you would like to have a conversation about this, please contact Dave Mead at (303)660-8135 or meaddp@meadconsultinggroup.com

 


Saturday, December 10, 2022

Barrier#4: Lack of internal understanding about customers, competitors, and the market

 

Barrier#4: Lack of internal understanding about customers, competitors, and the market    

Overcoming Barriers to Planning and Execution 

Over time, every organization will create barriers to success. The very things that made you successful as a startup or growing organization may prevent you from being successful at the next level.

Barriers to Planning Success
  •          History of only partially developing plans
  •          History of unreasonable expectations and unachievable goals
  •          Lack of internal understanding about customers, competitors, and the market
 
Barriers to Execution Success
  •          Gaps in management depth
  •          History of abandoning projects
  •          History of lack of openness and poor communications
  •          History of poor delegation and leadership development
  •          Lack of true accountability

Barrier#4: Lack of internal understanding about customers, competitors, and the market
Developing a strategic plan without a good understanding of customers, competitors and markets is venturing off into the woods, blind-folded, hoping to avoid trees, boulders, and cliffs. Chances for success - slim to none!
Important pieces of information or questions to ask:

  • Customers
  • What do they like about your current products and services
  • Where are the holes in your offerings? What are your customers' biggest problems/needs? How might customers respond to your strategic initiatives?
  • Competitors
  • What is your competitive position? Can you take independent actions without potential negatives consequences at the hands of competitors (Very few companies can do this)
  • How are competitors positioned? What are their strengths and weaknesses? How will they respond to your strategic initiatives?
  • Markets
  • What are the holes in the market?
  • What/Who are the potential disrupters? The category leaders of tomorrow are likely not from your current industry. New technologies, new approaches (think Apple iPhones, Netflix, Tesla) The list of one-time category leaders who were either arrogant or oblivious is lengthy.

What are the characteristics of this barrier in an organization?
  • Classic example:" Keep doing what your doing...Just work harder and do it better." The Plan just adds x% growth to revenue and profit without any substantial changes in strategy or tactics
  • Employees don't believe it is realistic and don't see it as achievable.

The impact on an organization
  • Smart employees will begin to question what the leadership is doing and will not be fully committed to execution.
  • Some might leave, or worse some may stay and be half-hearted

Overcoming this barrier
  • Establish ways to solicit and review customer feedback on products and services - and review it at the highest levels. This should include win/loss analysis. Find ways to uncover unmet customer needs.
  • Regular reviews of the competitive environment. What do customers like/dislike about competitors?
  • Reward/recognize employees that are close to customers and competitors to look for and communicate field intelligence
  • Conduct scenario planning to identify trends/technologies that might provide early indications of potential disrupters
  • Utilize a planning and execution process that validates your approaches with customers, the competitive environment and the market

Identifying the barriers to planning and execution is critical. Companies that have addressed the barriers are amazed at how much more their management teams are engaged and how the process energizes the entire organization. CEOs of companies that have had years of poor planning and execution history, find that their organizations are far more capable than they ever imagined of achieving superior results.

The Mead Consulting Group has helped many companies identify and overcome the barriers to successful planning and execution.
Our Customer Forward TM Strategic Growth & Execution process is simple and effective at uncovering the key obstacles and barriers and developing recommendations for improvement - then laying out the best strategic path. Finally, validating that strategic growth & execution plan with customers and the market.

If you would like to have a conversation about this, please contact Dave Mead at (303)660-8135 or meaddp@meadconsultinggroup.com
Please comment 

Best regards,
Dave Mead      

Wednesday, November 30, 2022

Overcoming Barriers to Planning and Execution -Barrier#3: History of unreasonable expectations & unachievable goals

 [Editor's Note: In Issues for Growth Vol. 31, No.11, we asked the question, "Are there barriers blocking your successful growth and execution?" We then listed the Barriers to succesful Planning and the Barriers to succesful Execution.We are continuing a series of Issues for Growth where we will tackle each of these barriers and identify ways to overcome each. We continue with Barrier #3. -dpm]


Overcoming Barriers to Planning and Execution -Barrier#3: History of unreasonable expectations & unachievable goals

Over time, every organization will create barriers to success. The very things that made you successful as a startup or growing organization may prevent you from being successful at the next level.

Barriers to Planning Success
  •          History of only partially developing plans
  •          History of unreasonable expectations and unachievable goals
  •          Lack of internal understanding about customers, competitors, and the market
 
Barriers to Execution Success
  •          Gaps in management depth
  •          History of abandoning projects
  •          History of lack of openness and poor communications
  •          History of poor delegation and leadership development
  •          Lack of true accountability

Barrier#3: History of unreasonable expectations & unachievable goals

Again as stated- Many business owners and senior managers are brimming with creative ideas. Some time ago, we were asked by a business owner of a $75MM business to "validate" the company's new strategic plan. There were 14 initiatives on an 11x14 sheet - with small font. All initiatives had year one deadlines. This was a company that had not grown significantly in several years, had a thin management team, and there was no plan to significantly increase resources. What could go wrong with this picture?

What are the characteristics of this barrier in an organization?
  • Too many ideas; Too many goals
  • Unrealistic deadlines
  • Every goal is a BHAG( Big Hairy Audacious Goal) 
  • Each senior manager has a different set of priorities - No consensus on focus    
      
So one quarter, an organization is headed in one direction, and then abruptly next quarter, stop doing that - there is a new, "better" direction. Some times it is the tendency to chase the next "shiny rock"; in others, it's the CEO listening to another business owner in a peer group that has a "better" idea.

The impact on an organization is an organizational "eye roll." It's great to set a BHAG (Big Hairy Audacious Goal) for the organization. But too many strategies and goals overwhelm an organization and every person thinks "another rabbit hole; this won't work; here we go again!"

Overcoming this barrier - No more than 3 strategies
Overcoming this barrier is relatively straightforward. Going through a facilitated structured planning process can ensure that an organization is focused on a few priorities that can really move the company. We have found that organizations that develop 3 strategies - with clear action plans to achieve the desired results - are far more successful than organizations with 10 or 14 strategies and initiatives.

Develop a "What we are not going to do now" list. The most difficult thing for many companies to do is prioritize. Even more difficult is to establish a list of projects or strategies that will not get done now, - and to stick to that list. Smart companies will insist that in order to take something off the "Not Now" list, they must take something off the "Do Now" list.

Identifying the barriers to planning and execution is critical. Companies that have addressed the barriers are amazed at how much more their management teams are engaged and how the process energizes the entire organization. CEOs of companies that have had years of poor planning and execution history, find that their organizations are far more capable than they ever imagined of achieving superior results.

The Mead Consulting Group has helped many companies identify and overcome the barriers to successful planning and execution. Our Customer Forward TM Strategic Growth & Execution process is simple and effective at uncovering the key obstacles and barriers and developing recommendations for improvement - then laying out the best strategic path.

If you would like to have a conversation about this, please contact Dave Mead at (303)660-8135 or meaddp@meadconsultinggroup.com

Sunday, November 13, 2022

Overcoming Barriers to Planning and Execution - Barrier #2: History of abandoning projects

[Editor's Note: In Issues for Growth Vol. 31, No.11, we asked the question, "Are there barriers blocking your successful growth and execution?" We then listed the Barriers to succesful Planning and the Barriers to succesful Execution.We are continuing a series of Issues for Growth where we will tackle each of these barriers and identify ways to overcome each. -dpm]

Overcoming Barriers to Planning and Execution
Barrier #2: History of abandoning projects

Over time, every organization will create barriers to success. The very things that made you successful as a startup or growing organization may prevent you from being successful at the next level.

Barriers to Planning Success
  •          History of only partially developing plans
  •          History of unreasonable expectations and unachievable goals
  •          Lack of internal understanding about customers, competitors, and the market
 
Barriers to Execution Success
  •          Gaps in management depth
  •          History of abandoning projects
  •          History of lack of openness and poor communications
  •          History of poor delegation and leadership development
  •          Lack of true accountability

Barrier #1: History of abandoning projects

Many business owners and senior managers are brimming with creative ideas. In some cases, each idea may have its own merits, but an organization can drown in a constant sea of ideas. Some organizations start many projects and directions, only to have them superceded by the next new projects. Some folks call it, "the CEO read a new book" syndrome.

So one quarter, an organization is headed in one direction, and then abruptly next quarter, there is a new, "better" direction. Some times it is the tendency to chase the next "shiny rock"; in others, it's listening to another business owner in a peer group that has a better idea.

The impact on an organization is paralysis. Managers and employees become conditioned that there will be a next new thing. So they duck down and wait for the current one to be "bow over" or be abandoned. No one gets seriously committed because they don't expect the direction or project to survive the test of time. No one can be expected to go above and beyond if they expect their efforts will never see completion. It facilitates a sort of "quiet quitting" or lack of engagement.
The result is at worst failure of the plan; at best, its execution is woefully suboptimal.

Overcoming this barrier is relatively straightforward - Going through a facilitated structured planning process can ensure that an organization has its bases covered before getting started with execution. We have found that organizations that develop 3 strategies - with clear action plans to achieve the desired result - are far more successful than organizations with 10 strategies.

Develop a "What we are not going to do now" list. The most difficult thing for many companies to do is prioritize. Even more difficult is to establish a list of projects or strategies that will not get done now, - and to stick to that list. Smart companies will insist that in order to take of the "NotNow" list, they must take something off the "Do Now" list.

Understanding the barriers to planning and execution is critical. Companies that have addressed the barriers are amazed at how much more their management teams are engaged and how the process energizes the entire organization. CEOs of companies that have had years of poor planning and execution history, find that their organizations are far more capable than they ever imagined of achieving superior results.

The Mead Consulting Group has helped many companies identify and overcome the barriers to successful planning and execution. Our Customer ForwardTMStrategic Growth & Execution  process is simple and effective at uncovering the key obstacles and barriers and developing recommendations for improvement. If you would like to have a conversation about this, please contact Dave Mead at (303)660-8135 or meaddp@meadconsultinggroup.com

Please comment 

Best regards,
Dave Mead