Guest Blog Post by David Shavzin;  Partner, ITB Partners

A laser focus on key business TRANSFERABLE Value Drivers will maximize your exit. When I speak on exit and succession planning, I talk about four high-level steps. My last two blogs covered the first two steps: Step 1: Exit Planning / Succession Planning is a TEAM SPORT and Step 2: Knowing Your Business Value and Step 4: Business Exit Options.







Step 3: Understanding TRANSFERABLE Value and Value Drivers
First, let’s discuss Transferable Value

I usually put it this way: “What would happen if you left your business for three months, headed down to an island with absolutely no way to communicate?”
If you get back and the business is humming along well, even thriving, you may well be on your way to significant transferable value.

If sales didn’t happen, if bills were not paid, if your products or services were not delivered, if 2 key employees quit and if the leaking roof completely fell in – because you were not there – you probably don’t have much transferable value.

The company’s dependence on you for success limits Transferable Value to a buyer. A buyer does not want to see a significant amount of knowledge walk out the door upon purchasing your business. If that’s the case, they will pay you a lot less than you want for it.
Perhaps the extremes of 1) or 2) above don’t apply to you, but the reality is that most businesses have a long way to go to optimize transferable value.
The big goal: make yourself irrelevant to the business. “But, but…” I hear you start to protest. Get over it! If your goal is to have the money that you need/want for yourself and your family, you need to raise your business like a child, preparing it to live life on its own…without you.

Now, the Top Ten Drivers of Transferable Value
These are not necessarily in priority order and should all be addressed as you work on growth, succession, and exit. Develop a plan that truly addresses these ten items, and start working the plan now:
• Your revenue will improve immediately.
• You will feel better and enjoy the business.
• Your value will start to grow quickly.

1. Sustainable, Recurring Revenue.
2. Written Business Processes: update them regularly, train to them regularly. Repeatable, consistent operating systems drive the customer experience and sustainable cash flow.
3. A Technology infrastructure that supports your plan and value drivers, while staying current!
4. Management Team and senior staff who are trained and motivated. Make sure that your employees are Knowledgeable and Engaged.
5. Sustainable, Competitive Advantage: Is there something that is truly different about you? If not, find it! Don’t be a commodity and don’t tell me “we have great customer service”!
6. Scalability: are you ready to take on a new customer that adds 50% to your revenue? 100%?
7. Diversified Customer Base: Is one customer more than 20% of your revenue? And how often do customers leave you?
8. Customer Experience: Do you truly know how your customers experience your products and services?
9. Financial Performance: Sustainable, Growing Cash Flow and Financial Controls.
10. Written Growth Plan

The Bottom Line on Transferable Value
The business needs to thrive – without you! Develop and work a plan that addresses the top ten value drivers. Start today, measure your progress and adjust your tactics if you get off track on your exit planning.

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More Reading:
Step 1: Exit Planning / Succession Planning is a TEAM SPORT
Step 2: Knowing Your Business Value
Step 4: Business Exit Options.
Transferable Business Value and What Drives It:
http://www.forbes.com/sites/johnbrown/2016/06/30/transferable-business-value-and-what-drives-it/#22c215fe7241
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David Shavzin, CMC
Partner, ITB Partners
Shavzin and Associates, Inc.
Valuation, Succession Planning / Exit Planning, Building Value for Sale
Atlanta, Georgia
770-329-5224

Thank you for visiting my blog.  I hope you enjoyed my point of view and would like to receive regular posts directly to your email inbox. Toward this end, put your contact information on my mailing list.Your feedback helps me continue to publish articles that you want to read. Your input is important to me so; please leave a comment.

Jim Weber, President

New Century Dynamics Executive Search

Author of: Fighting Alligators: Job Search Strategy For The New Normal

JimWeber@NewCenturyDynamics.com

Current Assignments

1. COO- Atlanta-based Casual Dining Restaurant Company – New

2. Controller – Atlanta-based Consumer Products – Digital Company – Offer Accepted

3. Director of Biz Dev, Atlanta-based B2B Professional Services Company:    Completed

4. Payroll-Benefits Manager, Atlanta-based Retail Company:  Complete

5. Senior Accounting Manager – Atlanta-based Manufacturer. Complete

6. Controller – Atlanta-based Restaurant Company: New

7. Outplacement Assignment – Atlanta-based Manufacturer:  Complete

My most recent posts have extolled the virtue of employing a social media strategy for talent acquisition.  This week I decided to do some further research in this connection. I begin with phone calls to a couple of my clients.  I wanted their input and to learn what they’re doing. After a few conversations, I began visiting their websites and social media pages.  I even built an Excel Spreadsheet to capture the data I thought might be relevant.  What I learned was most interesting, leading me to believe that I must pursue this line of analysis further.

As I have a somewhat diverse client base, I was able to see top line results across various industry sectors.  My clients range from retail to consumer packaged goods,  business to business services, and manufacturing.  All of these companies are using their websites to attract potential employees. Some have a more robust presence than others in this regard, however, all are posting jobs and providing a vehicle to take applications from job seekers.  A few of the consumer brands are using their website to build a community of career minded followers. It was interesting to note, however, that none of these companies provided a compelling reason for anyone to join their team. There was no call to action.    It was as if to say; yeah we have positions to fill, and we might be interested in talking with you if you want to talk to us.  That was common across all platforms.

With one exception, all of my clients are using LinkedIn to promote their company. There is a wide range of effort in this area, but it is fair to say that none has a particularly strong presence on LinkedIn. Again, there was no evidence of a strategic message for talent acquisition by any of these brands.

Only one of these companies, a manufacturer, doesn’t have a presence on Facebook.  Otherwise, there is substantial evidence that they are making good use of social media. There is a lot of variation in the frequency of their messaging, but they are all working to develop a community of engaged followers.

SEND ME THE FREE EXECUTIVE RESUME CHEAT SHEET!

All of these brands are active on Twitter as well.  The consumer oriented brands are generating the most activity and followers. The manufacturing company scored lowest on activity level whereas the CPG brand is “rocking it.”  With the exception of the manufacturing company, each of these firms also maintains a presence on Instagram and Pinterest.  That was a pleasant surprise, but understandable as those platforms are consumer oriented.

My Clients recognize the importance of leveraging their presence on the Web to support their talent acquisition goals.   Some are further along than others, however, each has established a beachhead. They have extended their reach and are becoming more experienced.  I suspect there is a budget issue in play here as well.  Generally speaking, the larger companies have a bigger social media footprint.  They must recognize the value of this medium and have resourced their efforts.  A notable exception is the smallest company which has made the greatest commitment to social media.  Of course, that could be because it is a CPG-Digital company that markets its products on the Web. Even so, it is most curious that they don’t offer a compelling message to attract potential employees.  They provide the process to make it easy for the motivated job seeker to make an application or to send a resume but offer little encouragement.  None offered a compelling reason to consider a career with their company.  Their message is directed toward their retail customer and prospective customers, but not prospective employees.

I found this to be a very useful exercise which requires further investigation.  I made an effort to follow each of these companies on Twitter and LinkedIn.  I also gave them my email address to receive their marketing communication.  I am eager to learn about their messaging.  It will be fun to watch their progress.

Thank you for visiting my blog.  I hope you enjoyed my point of view and would like to receive regular posts directly to your email inbox. Toward this end, put your contact information on my mailing list.Your feedback helps me continue to publish articles that you want to read. Your input is important to me so; please leave a comment.

Jim Weber, President

New Century Dynamics Executive Search
JimWeber@NewCenturyDynamics.com
Author of: Fighting Alligators: Job Search Strategy For The New Normal

Current Assignments
1. COO- Atlanta-based Casual Dining Restaurant Company – New
2. Controller – Atlanta-based Consumer Products – Digital Company – New
3. Director of Biz Dev, Atlanta-based B2B Professional Services Company:    Completed
4. Payroll-Benefits Manager, Atlanta-based Retail Company:  Complete
5. Senior Accounting Manager – Atlanta-based Manufacturer. Complete
6. Controller – Atlanta-based Restaurant Company: New

A week ago Thursday, my colleague David introduced me to the principals of a small design-build company. These folks have a bit of a conundrum. Last year they hired an individual to fill a key position, however that person is not performing to their standards.  He requires too much supervision and follow-up. The principals are having to cover much of his workload. They’ve decided to replace him and wanted to talk to me about conducting a confidential search. These folks have never hired an executive recruiter so they are curious as to my background and method of operation. They also want to know the cost of my services.

During our meeting, they spent a lot of time talking about their expectations for successful job performance and the shortfalls of the incumbent. They talked about the process they used to recruit him, including compensation and qualifications. It was clear to me that there was a major disconnect between the strategic importance of the position, the experience and skill set required, and their compensation package. Frankly, this is not uncommon for a small company.

Note: Successful companies are always recruiting talent, even if it’s nothing more than networking and cataloging potential hires.

The following Monday morning, David called to advise me that the prospective client had been presented with the employee’s resignation. Now they are really in a pickle. This is a key position that needs to be filled immediately.   Productivity will suffer along with customer satisfaction.  Their P&L is sure to be affected.  They are serious about a search engagement and wanted to schedule a phone call with me to finalize an agreement.

The fact that the incumbent offered his resignation came as no surprise to me. When the relationship between employer and employee becomes strained it is mutual.  Surprisingly, many employers fail to grasp this fact.  I am equally confident that if I was to do an exit interview with this employee, he would say the job wasn’t what he expected either.

When we had our conversation later that day, I got a clearer picture as to their thinking and how they wanted to proceed.  I learned that they want to pursue a parallel path evaluating the acquisition of a W-2, regular employee, or a 1099 contractor. They also gave me a sense as to their cash flow situation and budget parameters for the search.  I told them that I would outline a proposal for their review before noon the next day.

The smaller the company, the more critical turnover becomes.  They typically have little excess staff.  They are totally focused on work at hand and business development to the exclusion of an active recruiting program. This is understandable, if not something of an extreme case.  An active recruiting program is an effective insurance program.

SEND ME THE FREE EXECUTIVE RESUME CHEAT SHEET!

Larger, more stable companies have the same issues as my perspective client. Working on an engagement last year, I quickly learned that the client underutilized the talent acquisition value of their web-site.  They did not feature a “careers” tab prominently on their main menu.  In fact, it was inconspicuously buried as a sub menu item. This company has had difficulty with ongoing recruiting, yet failed to put out a welcome sign for prospective team members. This was easy to correct. The follow-on step was to add a plug-in that collected resumes and job applications from interested candidates.

Minimizing the risk of turnover should be a priority for all organizations.  Putting out a welcome sign to attract prospective employees is the starting point.  A prominent page on the company website and on social media is ideal.

Thank you for visiting my blog.  I hope you enjoyed my point of view and would like to receive regular posts directly to your email inbox. Toward this end, put your contact information on my mailing list.Your feedback helps me continue to publish articles that you want to read. Your input is important to me so; please leave a comment.

Jim Weber, President
New Century Dynamics Executive Search
JimWeber@NewCenturyDynamics.com
Author of: Fighting Alligators: Job Search Strategy For The New Normal

Current Assignments
1. COO- Atlanta-based Casual Dining Restaurant Company – New
2. Controller – Atlanta-based Consumer Products – Digital Company – New
3. Director of Biz Dev, Atlanta-based B2B Professional Services Company:    Completed
4. Payroll-Benefits Manager, Atlanta-based Retail Company:  Complete
5. Senior Accounting Manager – Atlanta-based Manufacturer. Complete
6. Controller – Atlanta-based Restaurant Company: New
7. Outplacement Assignment – Atlanta-based Manufacturer:  New

Well, the obvious answer is so that you know how much to ask for it when you are ready to sell.
But what about today? Do you know what it is worth right now? When I ask business owners about their business value, I often get an answer that goes something like this: “Oh I don’t know, I have at least a few years to go before I am ready to sell. So, why should I care about that now.”
Having an exit plan is critical. With your advisors in place, the next step is to know what your business is worth today.

• What if someone approached you today with an offer to buy your business? Would you know if it was a fair offer? (And don’t say you wouldn’t sell! If that check was big enough…)
• What if you have to sell before you are “ready”? Accidents happen, health issues happen, the economy has its ups and downs.
• If you have a target value in mind, how do you know if you are on track to achieving that business value for your exit? Understanding your value today can serve as a benchmark to track growth toward your target exit value…and signal a problem if you are not growing as you need to for an exit when you want to leave.

The Bottom Line
Know your business value! Get a simple valuation done and develop a game plan with specific targets and timelines. Implement each step in the plan and monitor results at least monthly to ensure you are on track. Update the valuation annually to make sure you are ready when the time and money are right for YOU!

It isn’t easy managing human resources in the new normal!

In the past year, I’ve been involved in consulting engagements to help small to midsize companies improve their team building efforts.  These folks are finding it difficult to attract talent, especially as the market has tightened.  They need help, but they’re reluctant to engage professional help.

In this connection, I had an interesting discussion with a senior executive for a major financial services company located in the northern suburbs of Atlanta. He is having difficulty attracting new agents and keeping existing employees engaged. I listened to his frustrations for ninety minutes.  What I found most interesting was not what he said, but what he didn’t say. He did not speak of a recruiting strategy using social media.  As we were closing our discussion, I suggested that his company would be well served by treating employees and recruits as customers. His feedback to that comment was entirely nonverbal, a blank stare indicating total confusion. If I was to draw a cartoon image of the encounter the caption over his head would’ve read “tilt.” He failed to make the connection.

Major companies have the resources to support their recruiting program and to understand the needs of their labor force. They actively manage their culture and invest in tools to achieve their recruiting and selection goals. They monitor the attitudes of their employees and respond to their needs. They treat their employees like customers.

I am reminded of a former employer before I started my recruiting business. It was a major consumer products company that placed a high value on manpower planning. In many respects, they set the standard for creating a highly productive, engaged workforce. One year they did a climate survey of the corporate office staff which generated some interesting results. The employees complained that they worked so many hours that they had little time for mundane personal tasks like banking or Dry Cleaning. This company, being highly responsive to the needs of their internal customers remodeled the corporate office adding a branch bank and laundry service. Clearly, their heart was in the right place, even if they missed the point of the feedback. The employees wanted their company to dial back the workload so they could choose how to improve their quality of life.  Now I must admit that this is third-hand information so it could be erroneous, however, based on my time working for this company, this story rings true.   I am confident that their response today is more on target.

Smaller companies have a more difficult time with recruiting, selection, onboarding,  and retention. They’re focused on client acquisition, but don’t quite understand how to maintain a highly productive workforce while minimizing turnover.  Most have had little training in the fundamentals of interviewing or making effective hiring decisions.

Much of the labor pool is composed of millennials who Baby-Boomers find difficult to understand. They have a distinct set of values and expectations from employment. They must be recruited and managed differently. Social media can be a very powerful  tool in this regard.

Many mid-caps are out of phase with the labor market in the new normal. They may be making a heroic effort toward consumer outreach, but they are old-school in the way they recruit new employees. In fact, many don’t understand the new employment dynamic.  They are using outdated strategies that just don’t work.

Most companies are doing well with their digital marketing efforts to attract new customers. To be competitive at talent acquisition they must employ the same strategies.  They should be developing communities of prospective employees and keep them interested in the opportunity for employment. The goal is to generate a continuous flow of job seekers, minimizing the need for outside recruiters. To support this strategy, training is recommended to become better interviewers and to improve candidate selection decisions.  To minimize turnover and to keep employees engaged, customer loyalty programs should be developed for employees. 

Treat job seekers as customers for successful talent acquisition in The New Normal.

Thank you for visiting my blog.  I hope you enjoyed my point of view and would like to receive regular posts directly to your email inbox. Toward this end, put your contact information on my mailing list.

Your feedback helps me continue to publish articles that you want to read. Your input is important to me so; please leave a comment.

Jim Weber, President
New Century Dynamics Executive Search
JimWeber@NewCenturyDynamics.com
Author of: Fighting Alligators: Job Search Strategy For The New Normal

Current Assignments
1. COO- Atlanta-based Casual Dining Restaurant Company – New
2. Controller – Atlanta-based Consumer Products – Digital Company – New
3. Director of Biz Dev, Atlanta-based B2B Professional Services Company:    Completed
4. Payroll-Benefits Manager, Atlanta-based Retail Company:  Complete
5. Senior Accounting Manager – Atlanta-based Manufacturer. Complete
6. Controller – Atlanta-based Restaurant Company: New
7. Outplacement Assignment – Atlanta-based Manufacturer:  New

New Century Dynamics is pleased to announce a new search assignment for a Financial Controller.  The Client is an Atlanta-based, CPG-digital company.
This position reports directly to the President and CEO and has responsibility for overseeing the Human Resources functions.

This position is part of the company’s leadership team.  It is responsible for interfacing with financial systems to ensure that financial and operational data are available in a meaningful format to support timely decisions. The function’s strategic component centers around developing new ideas, systems, and technology, while analyzing and improving on old ones.  Areas of primary concern include inventory and supply chain, relationships with professional and financial services providers, and providing leadership.

Position Requirements:
Must have a minimum of 10 years of strong operational experience: ideally has worked in a senior management role for two years in a small business or startup. Experience working for a consumer product or E commerce company is strongly preferred.
Demonstrated experience in financial planning and analysis with previous experience overseeing human resources, information technology, and legal.
Skills should include organizational development, personnel management, budget and resource development, and strategic planning.

For more information and your referrals contact me at:

James E. Weber, President

NEW CENTURY DYNAMICS EXECUTIVE SEARCH

Experts in the Confidential Search!

770-649-7051

JimWeber@newcenturydynamics.com

www.newcenturydynamics.com

Blog:  FIGHTING ALLIGATORS