2009 is going to be a breakthrough year for many of us.
The breakthroughs will not necessarily be about maximizing revenues, because getting rich is not every business owner’s ultimate dream. For some truly Wealthy Companies, improving our environment, fostering a great culture, maximizing cash flow, or creating more free time may have greater value than acquiring more material goods.
Before you sally forth into the new year, consider some basic Wealth Building rules.
Rule #1: Welcome confrontation.
When I work with growth company CEO’s, I ask them to stop doing certain things that no longer serve their business. For the first time in their company’s history, they will be developing a written growth plan.
One of my top clients averted the development of a business or marketing plan for 20 years—and still grew their organization to $16M in revenues. Our EnergizeGrowth™ planning process helped them get more focused, improve cash flow, and expand globally.
Rule #2: Procrastination and paralysis are part of the journey.
Hay Group research presents a compelling argument for improving your action orientation and resilience. They teamed up with La Sorbonne and tracked the successes and failures of 100 of the largest European mergers and acquisitions. Their survey revealed that more than ninety percent of corporate mergers are deemed a failure. They found that the management of intangible assets and the role of leadership are often ignored during the due diligence process. “Intangible assets”—which Ocean Tomo LLC claims comprise a full 73 percent of a company’s valuation—include a company’s organizational structure, agility, and governance, brand identity, client loyalty, and human capital (such as leadership, engagement, employee productivity, and level of team commitment versus compliance).
Understanding change management is an essential skill to help you successfully navigate the legal, business, financial, integration, and personnel issues that result from growth, mergers, or exits.
English poet William Blake once said, “Execution is the chariot of genius.” Many merger and acquisition experts agree that it is easy to announce a major change such as an acquisition. It is another thing to actually celebrate a successful integration two years later.
Rule #3: You will only see results if you write down the ideas you want to implement.
People often submit cool new ideas to me. Many of these ideas never see the light of day. One participant in my recent Portland workshop wanted to share her new company strategy with us. She prefaced her question with “Here’s what I’m thinking about.” I stopped her right away, and said, “When you have written down your idea, come back and we’ll listen.” Although her business had taken an entirely new direction, she would not take fifteen minutes to record her thoughts. How could anyone in the room–let alone her most trusted peers–ever help her move forward?
Rule #4: Know your risk tolerance.
It is easy to ignore the risks associated with the change our growth plans represent. Most of my clients are natural born optimists. Unfortunately, it’s easy for visionaries and optimists to think big, set several lofty goals at once, and then lose interest before they ever complete them.
Here is an example from a software client I worked with several years ago. They hired me to help the worldwide leadership team develop an action plan to close some major sales their top customers. After our successful planning session, Alex, the CEO, addressed the group. She announced a comprehensive plan to turn the company around. She then proceeded to present a thirty-six point turnaround strategy. The strategy was very resource-intensive. Furthermore, it distracted them from their number one priority—growing and retaining their customer base.
Within one year, this distressed firm was sold to a holding company for pennies on the dollar. Alex’s high-flying strategy never left the runway.
Rule #5: Ask the right people for help.
Start by designing the profile of the perfect advisory team. Consider these traits: Be sure they have consistently launched or managed profitable businesses. They should communicate with empathy. One of the most basic human needs is the need to be accepted, and corporate leaders are no exception. Great advisors are tuned in to what motivates others. They are decisive. And finally, they tell the truth — no matter what. The Dalai Lama says: “A true friend is someone who tells you what you don’t want to hear.” So is an effective advisor.
Given the changes afoot in our world economy, it is time to start thinking differently about strategic marketing planning. Understanding your own limitations is the first step to protecting yourself against the biggest economic threat of all – yourself.