Posts tagged with: strategic CEO
When you want to sell your business, you want to command the highest possible value. For your business to merit the highest valuation, you must prove to the business appraiser and your prospective buyer that the value is in your business, not in you the owner. That means transforming you as an Operational President to become a Strategic CEO.
To start and launch a successful business, it is common for the owner/founder to ‘do whatever it takes’ to make it happen. That drive and commitment to move the business forward is essential to achieve your goals and objectives.
The control to achieve your goals and projections is often concentrated in you the owner, acting as the operational president. However, this must change for you to successfully transition out of the business and be compensated for the true worth of the business. Letting go of day-to-day operations is a tall order for many owners. To become a more strategic CEO and demonstrate that the business value is in the business itself, here are some suggestions to work yourself out of any day-to-day operational role:
- Create systems for everything. If you have systems, be sure they are documented. Document everything you do for the business (for every hat you wear). Anything that can be systematized and is repeatable can now be assigned to someone else. Once documented it can be assigned to someone else and come off your plate.
- Delegate everything. When your business can operate day-in and day-out without your hands-on oversight, you have a money-making machine that will attract buyers. This one change takes time, not days or weeks, but years. Identify the three things you absolutely love to do in your business and the three things only you can do. Delegate the rest. Be vigilant.
- Develop a succession plan throughout the company. Succession is not just for family businesses. Target and create a succession plan for your top people in every department and at every level. Groom them for the next step up and two steps up at all times. By building depth within the business, you add value for the buyer and secure their long term employment even under new ownership.
- Plan for scalability. Any business that is scalable has more value. Demonstrate that you are scaling successfully, even before the sale; now your business model can command even greater value.
When you apply these four suggestions diligently, you will work yourself out of the job of Operational President. You will free up your time to be a Strategic CEO and to focus on the things you love and what only you can do to grow your business to make it both buyer ready and buyer attractive.
Our new program, Build Your Business Value, helps you enhance the value of your business with 48 value drivers in 12 areas while improving your strategic position in the market.
When you decide to sell/scale or pass on your business to a successor, you can’t abdicate and retire on the job. Your continued leadership is essential to achieve the best result for you, your team and the business. Your exit skill set must include leadership. Your leadership, not management, will attract ideal buyers.
Great leadership is the key to success. Great communication is the key to great leadership. Think of any great leader in modern time: Gandhi, Martin Luther King, Jr., and John F. Kennedy come to mind immediately. They were powerful leaders because they could inspire people to follow them. It was their ability to articulate their vision that made them successful in achieving their goals.
What will it take to transform you from an operational President to a strategic CEO? What will it take to lead your business to conclude the best possible exit to guarantee your reinvention?
In your organization you must be the leader who inspires the team to great heights. To get them to follow you, be sure they are listening to your values and your vision, and then establish the right environment for them to thrive and grow.
When I mention values, everyone nods their heads as if to say ‘of course, Kerri, that’s obvious’. But, when I check up on this piece, I find the last time they discussed their values – personal and professional– with their team, was often in the interview before their people were even hired.
You must clearly know your personal values and your organization values to lead effectively. For example, do the answers to these questions come readily to mind?
- What do you stand for?
- What is most important to you?
- What would you like your life to demonstrate?
- What is your personal mission in life?
- What do you stand for?
- What are you willing to do to get new business/maximize profits/sell the business?
- What are you not willing to do?
- Do you have a professional mission statement?
Quality leaders don’t change their values over time or to achieve short-term success. Consistent core organizational value systems form the strong foundation for long-term success.
A simple definition is that your values are the rules by which you play the game. A well-defined value system makes all decisions easier and encourages your team to go where you lead.
In the area of skill sets struggling strategic CEOs lack, do you experience any of these?
- No time to plan
- Can’t stick to the plan
- Can’t delegate/afraid to delegate
- Stuck in systems and tools that hold you back
- Still using systems and structures you have long outgrown
- Trying to wear all the hats
- No control of financials
- Trying to be the technician and the visionary
- Never enough time for your most important activities
- No time for strategy and planning
- No tracking/monitoring/measuring
- No accountability in the organization
- Poor time management skills
- Mismatch between market needs and company capacity to serve and respond
- Use/misuse/lack of automation or relevant technologies
- Too much operational responsibility to focus on CEO oversight role
- No development of management or grooming of successors
If any of these is a challenge, then you are still working too much in your business. Instead, you need to prioritize working on your business. You need to build up your strategic skill set. These are the core responsibilities you will be responsible for in exit planning.
To take on more strategic responsibilities and help the organization morph into a structure and business model that can grow to fulfill its true potential, you must delegate operational roles, responsibilities, tasks and control. This does not happen overnight. This transition goes hand-in-glove with your exploring your exit goals and exit options.