A clear growth strategy, great customer service, an experienced management team and a longstanding customer base are all among the drivers that build business value, but are there underlying factors that steer you from obtaining them? Doeren Mayhew’s recent business boot camp featuring Shareholder Jennifer Mailhes and Insperity’s CJ Coolidge revealed some common pitfalls that undermine business value:
Lacking a clear, compelling and communicated purpose. No growth strategy can be carried out if your team doesn’t know why the business exists and why their contributions matter. We find that entrepreneurs often have a vision in their head that doesn’t get clearly articulated. Communicate your vision to your management team and employees – and often – so they continuously understand the overall goal and what must be collectively achieved to get there. Annual strategic planning with your management team can help you develop and document your vision and build consensus on how to reach it.
Relying on past success. The greatest barrier to future success is relying on the past. What has “always worked” for the business may not work at all today. Seek new ways to grow and innovate, and be flexible with processes and procedures as the need for change arises. Consider using a SWOT analysis to explore the strengths, weaknesses, opportunities and threats for your business as a way to engage your team in identifying areas for improvement.
Working on too many initiatives. Avoid the “myth of multitasking”: trying to do it all and accomplishing nothing. Doeren Mayhew’s business advisors see it often in our work with clients, especially busy accounting departments – so many projects are on the list that many of them are touched but not completed, or not completed well. Equally important, ask yourself if your team is focusing on the right projects – how relevant are they to overall goals?
Needing to know it all. A high-value business is one that can run successfully when the owner leaves it. Trying to maintain a hold on every part of your organization not only takes your focus away from the strategic matters, it doesn’t allow your team to develop and work successfully without your involvement. Further, failing to involve others when you need it makes you mistake prone and leaves you open to costly risk. Leverage yourself within the company and seek both internal and external resources to build a systems-driven versus owner-driven business.
Creating an over-controlling environment. The belief that management must control all decisions can lead to high employee turnover, nervous attitudes and minimal communication in the workplace. Most importantly, it stifles innovation by your team and fosters that value drainer we reference above called an owner-driven business. Autonomy drives employee performance, so trust in your team to create, contribute and implement new ideas.
Possessing an under-engaged workforce. A recent study on workplace energy revealed that only 28 percent of employees are engaged, while 20 percent are actively disengaged and 52 percent are not at all engaged. That means if your workplace is a football team, only three players are actually trying to win, six do not care who wins and two are actively helping the other team win! Imagine where the business is now and the value you could achieve if everyone had their heads in the game.
Other management team mistakes include missing opportunities, ignoring conflict resolution and expecting systems to have an infinite shelf life