Part 3 – Overcoming Barriers to Growth and Improving Business Valuations
Management team effectiveness is a very large part of the assessment of business valuation by business buyers and investors such as private equity firms.
Critical areas that teams typically address to reduce dysfunction include:
Understanding how each member communicates and then how to effectively communicate and resolve conflicts within the team
- Personal behavior
Understanding one’s personal behaviors and how those behaviors impact the team’s Collective Effectiveness
- Team problem solving
Understanding how the team works to move an idea to an efficiently implemented result.
By working together on these areas, rather than sending individuals to sessions separately, the team improves their interactions and dynamics. This raises the management team’s Collective Effectiveness by developing behaviors that allow the team to perform more effectively, not just know each other better. Improving team performance raises organizational performance.
Define competencies and behaviors critical to the strategy
Behaviors not aligned with the growth strategy create an organization pulling in different directions, reducing the likelihood of achieving goals and eroding financial performance. Assuring that organizational behaviors meet the needs of the strategic plan is a critical success ingredient. It is not enough to create new tactics around marketing, sales, and production without addressing the “people” issues surrounding execution. Competencies – the capabilities the organization must possess to succeed – and behaviors – how individuals display those competencies day to day – must support the plan.
Expecting to achieve new strategic goals without identifying the required changes in individual and team behaviors will only lead to frustration. The organization will act as it always has; yet expect different results to occur.
Leaders shaping strategy therefore must define the “gaps” that exist between the behavioral requirements implicit in the strategic plan and the organization’s current culture and behaviors.