Part 4 – Overcoming Barriers to Growth to Improve Business Valuation
Maximizing the business valuation involves improving the management team performance when it comes to planning and executing the strategic plan. The valuation of the business by buyers and investors such as private equity depends on how well the president or CEO has addressed the issues such as these disconnects between strategy and the performance of the management team. It is one of the primary valuation drivers identified in the Invest-Ability Index™.
These disconnects must be analyzed for root cause and a plan developed to shape and nurture the individual and organizational behaviors needed for the growth strategy to succeed. Diagnostic tools such as the DiSC® personal profile system, team C.A.R.E. profile, and a listening profile can accelerate identification of the gaps between management’s current competencies and behaviors and those required by the strategic plan.
Once the strategic behaviors needed to implement the strategic plan are developed and communicated, and the differences from current behaviors are identified, the management team must put a process in place that sustains meaningful behavior alignment and continually seeks to improve performance.
One tool in that process can be 360 º Feedback.
360º Feedback provides input to individuals on the behaviors they exhibit with subordinates, peers, and superiors in customized categories that are critical to the organization’s success. This feedback can be used to develop individual goals and action plans to improve individual and organizational effectiveness. On going use of the
360º Feedback process permits monitoring of individual and group progress over time. As the feedback categories are linked to organization success factors, 360º Feedback strengthens organizational, as well as individual capabilities.
Organizations that incorporate behavioral change opportunities into their growth strategies can realize substantial bottom line benefits if they effectively define expectations and communicate them throughout the organization. By aligning behaviors with their strategic goals in a continuous improvement process, the company has the opportunity to gain significant sustainable strategic advantage over its competitors.
Achieving the Growth Imperative
Experienced leaders understand growth is essential to add value, provide opportunities, and ensure the future. While appropriate attention will be paid to identifying new markets, products, and services, and must be paid to execution of the plan, eliminating barriers to growth and preventing re-occurrence is a critical responsibility of leadership.
Building a valuable company in order to maximize the valuation for an eventual ownership transition, whether it is recapitalization, private equity investor infusion, or sale to a financial buyer or strategic buyer fundamentally depends on the exceptional performance of the management team. Addressing behavioral changes that either inhibit or need to be further leveraged is a critical part of the equation to improving the Invest-Ability Index™ score.