Don’t Miss this Opportunity to Get Sale Ready
South Africa’s current economic downturn is not all bad news, if you are a business owner who is considering selling your company. Here’s why: The best time to get your company ‘sale ready’ is very often during a downturn. Quality employees are easier to recruit, resources are less expensive, and competition is less intense.
‘Sale ready’ is a description of the state of your business. Should you choose to sell, you will be able to command a decent price. This process always starts with a plan for the business, but definitely not a rigid business plan. Such plans lock one into a pre-set, invariant process which is — much like a highway without exits — devoid of options. The best plan is far closer to a hypothesis that you work on until it doesn’t produce the desired results, and then you correct it. This yields a plan that is specifically adapted to extract maximum benefit from the unique aspects of your company and the particular context within which it operates.
Operating a business requires a very different set of skills to those needed to start a business. A great operator ‘makes the trains run on time’, which is hugely important since terrible things can happen to a business if the ‘trains are not running on time’.
The truth is that what moves businesses forward is not ideas that result from tremendous creative insight. As a strategist I know that ideas are necessary, but execution is everything. It is the masterful execution of creative insights that wins – every time.
Andy Grove was one of the founders and the CEO of Intel. He was pivotal to the transformation of Intel into the world’s largest manufacturer of semiconductors. The method he promulgated was the deceptively simple OKR (objectives and key results), a profoundly effective business tool that became the lifeblood of Intel.
The OKR method drives execution. An ‘objective’ is simply what is to be achieved by the organization or the unit, no more and no less. As Yogi Berra pithily said: “If you don’t know where you’re going, you might not get there.”
The ‘key results’, benchmark and monitor how we get to the objective. ‘Key results’ and ‘key performance indicators’ are very different. I may really be impressed that you performed well, but your efforts are only useful if you achieved the results I need.
Marissa Mayer would say of OKRs, “It’s not a key result unless it has a number.” With a number attached, OKRs are either met or not met. There is no grey area, no room for doubt. The time frame for an OKR can vary from a month to a quarter or more, but at the end of the period, they have either been met or they have not.
In a meta-analysis of seventy studies of companies with a high commitment to managing by OKRs, a productivity increase of 56% was recorded. Where that commitment was low, productivity increases were a mere 6%.
OKRs are especially beneficial in a thinking environment. Here the challenge for many is separating the person from the activity. All too often, feedback becomes very personal, so many managers avoid confronting non-performance. When the focus is on unequivocal results that can be tracked, then non-performance can move to an analytical discussion. After all, a performance management system is a tool, not a weapon.
There is no most effective way of implementing OKRs, only the highly distinctive way that works best for your business. A good way to start is with the premise that everything is a project.
Don’t go it alone
Having a business ‘consigliere’ is close to a necessity. If you think that the talented don’t need coaching and only the weak do, it is worth knowing that leading business executives such as Steve Jobs of Apple, Jeff Bezos of Amazon, and Larry Page of Google and more, all did use consiglieri, or still do.
These three executives used ex-university sports coach and investor, Bill Campbell. Their description of Campbell provides a good guide for your choice of a consigliere: he was effective, insightful, hardworking, humble, trusted, and loyal.
My personal experience with the process of making your company ‘sale ready’ is best summed up by actress Mae West’s famous statement: “I never said it would be easy, I only said it would be worth it.”
Take advantage of this an positive opportunity in the midst of an otherwise negative economic atmosphere.
Ian Mann of Gateways consults internationally on strategy and implementation and is the author of ‘Strategy that Works’ and ‘The Executive Update.’