Every business owner thinks about exiting their business. Some hope to sell. Others may have plans for somebody to ‘take over’ (e.g., next generation; partner/co-owner; employees via employee stock ownership plans; etc.). Maybe the plan is to step away slowly and continue to take an income or profit. Regardless of the plan, the success of each is largely contingent upon the health of the business.
Any buyer will want some assurance of continuing revenue, as well as the ability to continue operations at a profit. The likelihood of recurring revenue lessens when the ‘Selling CEO’ exits and there is no team in place to drive sales. Let’s assume there is a sales and marketing team to drive revenue. Is there an operating system with the accountability in place to execute on delivering the products and services sold? Does the system measure the effectiveness of those responsible? Do you have trusted relationships with suppliers? How well documented are your systems and processes?
It might seem counterintuitive, but a good test of this happens with a passive CEO. What happens when you (the owner/CEO) take time off? Imagine taking a two-week vacation with no access to your phone or computer. Would the business thrive or would you come back to a firestorm? Take it a step further. Does your management team have a clear direction for the next 3-5 years? Are your vision, values, and goals clear? Would they share the same view of that long-term goal in your absence?
Based on our collective experience in leading Peer Advisory Boards (Mastermind Groups) and one-on-one executive coaching, if the answer is ‘no’, it’s unlikely the team will be able to provide strategic direction, much less daily tactical direction.
The following article shares similar guidance. Please tell us about your experience, as you dream about exit and begin to move closer to leaving your business.
Why Many Small Businesses Cannot Be Sold (NY TImes)
The primary goal of leadership is to have influence. Leaders should have the answers. They don’t need help. Right?
Wrong. Attaining leadership is more complicated than it might seem. How about leading through power and authority? Lead the way. This, too, has inherent limitations.
Why? What if he doesn’t know the way? What if this (whatever-it-is) has never been done? Power and authority only get you so far. They have a limited sphere of influence. They can maintain the status quo and strengthen boundaries. They might even extend borders, build strong walls, control or mitigate bad outcomes, contain and constrain you-name-it. A leader who wields power and authority to get stuff done inherently imposes his ‘way’, which is, by definition, limited.
On the other hand, the leader who has the courage to be vulnerable immediately creates opportunity for all possibilities. She opens the door to the unknown. She invites change, collaboration, discovery, evolution, growth, innovation, invention, questioning, transformation, and transparency.
The leader’s job is to enable this environment and provide a framework within which her team can influence reaching whatever goal lies ahead.
Are you courageous enough to be vulnerable?
Courtesy: Glenn Lopis at Entrepreneur
In this article by the Boston Consulting Group (BCG), they share a study by Harvard Business School reporting that CEOs spend 60% of their time in meetings and 25% on the phone and events, with the balance (15%) going to everything else. Whether your ‘free’ time is 15% or 50%, how you spend it is key to whether you are investing it or simply spending it. Now is the time for reflection.
We, too, have found that time can be spent unwisely, with limiting decisions (from poor planning) that lead to unclear goals and lack of clarity. This quickly turns into lots of questions, is often accompanied by low energy. Fear eventually takes over, resulting in a reaction plan.
On the contrary, empowering decisions that invest in the future typically lead to higher energy and a sense of gratitude about the situation. This clarity on the end goal is accompanied by strategic questions and the courage (determination, faith) to take decisive action that moves ever closer to the end goal.
You might ask, what is the common denominator between thought and reflection (as highlighted by BCG) and an investment in empowering decisions? The answer: an investment is foundational and long-term, whereas ‘solving immediate problems’ is situational and short-term (i.e., putting out fires).
BCG notes the value in allowing some structure and schedule to allow time to step back and consider the big picture and long term. In so doing, having the perspective from an outsider (whether it be a trusted partner from within your industry or an advisory board from outside your industry) helps provide a level of honesty and accountability that goes beyond the immediate ‘need’ to put out (forest) fires, helps avoid fires in the first place, and may even chart a path beyond the edge of that forest to whatever it is that you dream about achieving.
Please read further to enjoy The Rewards of CEO Reflection.