Every executive we work with is interested in increasing the value of the business. Whether a small closely-held business with an owner who might want to sell the business or exit with an ESOP or a private-equity backed company aiming to achieve the ideal exit strategy per the private equity agreement or a large, complex organization working to increase shareholder value, increasing the value of the business remains a unanimous top priority.
Understanding this objective is quite different from fulfilling it. There is a reason the most successful businesses have teams of people instead of a single owner who has to come up with every idea – it is certainly more sustainable! So, what are ways to encourage these ideas? Here are several ways we’ve seen achieve success consistently over 25+ years in both the corporate and the consulting world with manufacturers and distributors.
- Engage your employees – Definitely one of the “easier said than done” items; however, it is also one of the most consistently successful. As the Gallop polls show, those companies with a higher percentage of engaged employees significantly outperform the rest.
- Involve your customers – Who can better generate ideas that will ensure a superior customer experience while increasing the value of the company if not your customers? Don’t just go to your top 10 customers in volume. Think about your long-term customers. It can be worth it to turn a few customers on the brink of being an unprofitable customer to prompt ideas to turn it around or end the relationship on a “good note”. You never know what might happen. We’ve seen dramatic turnarounds, just as often as we’ve seen the rest of the company improve when getting rid of the “rotten apple customer”.
- Collaborate with your suppliers – Aside from your customers, who else might have a substantial impact on your performance? Your suppliers! If you can devise new win-win approaches together, imagine the possibilities. For example, when I was a VP of Operations and Supply Chain for a mid-market manufacturer, we collaborated with suppliers to develop a new material so that we could reduce our usage (increasing our profit) and provide a benefit to our customers (better performance/ higher value for them). We become a closer partner with our supplier and grew each of our businesses and profits while enhancing the value to our mutual customer. A win-win-win.
- Ask colleagues outside of your area of expertise – Just because your colleague is in a different function doesn’t mean he/she won’t have a great idea. Take the time to explain an important project to related colleagues outside of the project or your area of expertise. Ask for their thoughts, watch-outs and the like. You never know where the next great idea will come from.
- Consult with experts / advisors – Attend trade association meetings; dig into industry journals; ask questions of LinkedIn groups; pursue alumni colleagues; consult with an advisor, consultant or financial expert; join a peer group.
There is no doubt that the most successful executives utilize all of these techniques to make sure they generate a seemingly never-ending stream of ideas to increase the value of their business. Will you set aside time on a daily, weekly and monthly basis to priorities these activities? Do not expect an immediate payoff; however, if you are consistent, you’ll find overnight success one day down-the-road.