As The Leader
Founder, entrepreneur, business owner, operator working towards selling your life’s work as the transferable asset we’re building together. Author and speaker, John Maxwell opines 21 Irrefutable Laws of Leadership he’s leveraged his knowledge, skills, abilities and USP to generate $10MM revenue pipeline – yeah, well he didn’t invent it! 14th-century English philosopher and Catholic priest, William of Ockham, the problem-solving guru of the day opined the principle of parsimony – when presented with competing hypotheses of same or similar prediction and both have equal explanation, one should prefer the hypothesis requiring the fewest assumptions – alas Occam’s Razor. Why 21 when 7 will do?!
What Does that Have to Do with Selling My Business, you ask? Simply put, you have two choices, 1) develop a management team to operate your life’s work without you, or 2) plan to stick around after your business case trades, the wire’s in the bank and you’re committed to hanging around for 6 to 24 months. Why do I have to stick around? Ensuring the transition is smooth for both buyer and former employees, provide certainty there’s little to no hiccups moving forward and demonstrating your leadership as being close to the same guy who sold his business. Here’s why you must adopt, employ and live these 7 Irrefutable Principles leading up to your sale regardless if you have a dedicated management team or not…you will be graded!
“If I give you a check for $20MM today, you’re not the same guy tomorrow!” – David Reed
Where We Are Going
You clearly articulated your desired end state. Whether that was in the years leading up to and in preparation to sell, moving through the process of selling the most valuable asset or ensuring successful integration of two formidable assets in hopes of ‘a second bite of the apple.’ Your leadership is defined in specific terms, demonstrating where OldCo is going, how it is to be supported with your lead or the management team’s in NewCo, and how your leadership is shared so it’s top of mind with every employee engaged. Where is simply alignment! Without shared buy in and shared vision, your run up to sell and the NewCo combination will absolutely fail 100% of the time.
Influence with Impact
Your people are a reflection of your leadership, good and bad. How business is executed, or ‘gets done here’ is a direct result of how you demonstrate influence with your employees, customers and vendors. No different than a parent, you are showing everyone who comes in contact with you what’s acceptable, what the boundaries are and what the standards and expectations of ‘how we expect work gets done.’ While every employees interpretation of your culture is within their frame, influencing culture where different leadership and follower styles are integrated in achieving the expected results.
Buy in is 100% required. Without alignment there can be no buy-in aka respect. Some of that post-closing time you’re in attendance is about demonstrating how ‘we imagine’, customer imagines, and the end users see and feel about the combination. We’re surfacing all issues and go forward directions now (ahead of a transaction) and the many variables involved. Together, we’re identifying problems and opportunities on the horizon to be proactive in resolving, predicting what may happen next and how we can prevent potential issues along the way.
No Where to Hide
The answer to a premium exit is having your business so prepared that it’s the most attractive opportunity in the market at the time. There is a tight link between sell-side due diligence and buyer-led integration processes. There is no where to hide when you and your team invested in the process of preparation. When you have most of the answers to the buyer’s questions, you’ve severely minimized risk and greatly increased the buyer’s trust of you and your people. The powerful combination results in a deal anywhere between 2 -4.5X turn on the multiple.
We build the work streams upfront, wrap around the synergies we know of the buyer that the acquisition creates with an aligned group of people makes Day One move faster. No one likes surprises! You don’t like surprises when the buyer uncovers some horrifying issue that costs you hundreds of thousands of dollars, or worse millions. The buyer hates surprises when they find a pimple on the ass of your business (although they don’t mind reducing your purchase price; also costing you hundreds of thousands or worse). We bring the functional experts of the how-to’s to ensure we capture those hundred thousand dollar bills and more.
“Without clear direction, leadership doesn’t matter” – Scott Spector
Communicate Simply & Powerfully
Communicating clearly, concisely and in a compelling manner that forges and develops relationships, builds and moves organizations forward and keeps organizations aligned is what matters most. Delivering a clear, concise and compelling message is communicating effectively and efficiently in a simple, practical and powerful manner. Your communication is as much an organizational system as is sales, operations and R&D. Formal and informal channels of communication ensures employees receive a consistent relevant message. As a leader you must say what you mean in as few words as practical and still convey your message in an informational, educational and inspirational manner moving the organization forward.
Communication results are based on less what you say and more of what you do, how you act, how you make decisions, how you treat people, how you respond when it hits the fan and how you deal with failure. Thoughtful details add color to who has the juice within your organization that’s part and parcel of the informal communication network. It’s assignment, alignment and execution! There’s depth to the shiny new toy the buyer sees in your case and a meaningful ecosystem of direct and indirect people associated with your organization. The result is a positive outcome where the buyer doesn’t have to extend more effort on the acquisition and integration as you and the team have done the heavy lifting.
Leverage Shared Learning
Creating a learning organization along the way has allowed your employees to wear their own hat – means you’re not hand holding and you’re not interrupting and taking over because they’re fully capable and confident to perform. Documented processes, process disciplines and oversight lead your organization in a highly favorable position relative to similar businesses like yours. When you’re thinking like a buyer, you’re adding more minutes to the multiple turn. Building capabilities and implementation muscle isn’t necessarily common in similar businesses as yours. It’s about engaging and mobilizing your people to perform their job at a higher level of proficiency.
When you go deeper with your team, the dynamics of collaboration are like letting the clutch out on a Ferrari California. They will go farther and faster because you gave them the tools and resources then got the hell outta the way! You applied the tools of communicating simply and powerfully, removed the roadblocks, deepened their trust of you as the leader because you didn’t kill them for making a mistake. Your power is in your leadership margin!
“If the buyer believes they have to be on a plane every other Monday for six months, then they’re likely going to pass on your deal as it’s too much effort.” – David Reed
Smoke Out & Ignite
Identifying potential issues and roadblocks ahead of time ensures your deal stays on time and on target. What we don’t want are delays due to slow seller response, fear of being found out or a buyer’s rep response of ‘we’ll deal with it in post’ (usually costs thousands of dollars at best). Worst of all is the Red Circle of Doom aka ‘pencils down, we’re done.’ Your demeanor must be that of James Bond in Casino Royale. Your people already know what mood you’re in everyday, and any sense of fear, uncertainty or doubt is more of a deal killer than owing the state for a year’s worth of taxes.
There’s a potential giant mind field under the legal and tax workstreams. It’s another ‘how you handle yourself’ during the depth of adversity is not to simply uncover problems as an issue spotter, but to solve it. One reason we enter early is to solve the problems on your behalf, we’re not the bad guy here. Be transparent about where the bodies are buried – we can fix it when we know what we’re up against. By smoking out the snakes and lighting them on fire, we can solve what you thought was a deal killer. Perhaps it is bad, but it’s never impossible. If you want a seat at the adult table with the generational wealth for dessert, then we need a process review to evaluate and recommend a course of action. It’s never as bad as you think AND keep your composure!
Its All About Relationships
Relationships matter! It’s not about getting something out of someone; that is a transaction and why we hate using that word. Too many people consider relationships and transactions as equal. Along the same context, we’ve become a global community of superficial connections, friends and followers. Your friends aren’t on Facebook. You don’t connect with one another on LinkedIn, and you can’t have a conversation on X or Insta. You’ve built a community within your organization. As the leader, the Chief Relationship Builder, you set the pace and the example of what’s accepted and tolerated!
We live it everyday by hand-selecting you as a client just as you hand-selected us to represent you. Your personal and professional reputation is proven daily by your relationships; and, your success in both realms is largely based upon the quality of those relationships. As the leader, you lead through the mine field first and eat last. As you earn right to advance and by having humility throughout the process, we defend your position with every potential buyer. We’re not negotiating with a company. We are dealing with people, individuals with families with all sorts of embedded interests, perceptions and POV.
“You want 10 and I want 10. When we do this right our 10’s can become 15 each if we do it together.” – Managing Director, Chicago Private Equity firm
