Creating Value as Part of your Exit Strategy
A significant part of exit planning includes developing internal talent for a seamless transition along with capitalizing on valuation improvement opportunities sooner than later. In Cornerstone Business Services State of M&A Shark Tank session, two important themes were mentioned. First, the deal the sharks reviewed was significantly hampered by senior leadership (multiple) planning to exit upon the sale without a clear line to next generation leadership. This left an insurmountable gap for risk of continuity. The second was future opportunities the seller said were there for buyer upside. A sentiment of skepticism was shared by the sharks; “If they knew the opportunity was there, why didn’t they do it?” These two key concerns prevented the sale and resulted in much lower valuation than the sellers thought their business was worth.
One of SPL Consulting, LLC’s clients had not given serious thought to succession planning. In fact, during the initial Assessment, we uncovered their daughter, who they assumed would take over the business, didn’t think she wanted to run it! The CEO, Karen, shared that “Through SPL’s process we created the development path for key members of the team and achieved vast improvement. Kevin is now the Director of Operations partnering with the Vice President, and between the two they oversee nearly every aspect of the business.” Karen also stated “SPL’s process showed us a way to look at each area of our business. We reviewed section by section what was working and what wasn’t. Lasting improvement was made by implementing the Strategic Plan. Not only did Brian help us create our plan, but he taught us how to instill a culture of discipline to follow through and execute.” This preparation, should they decide to sell, ensures continuity of leadership will not be a reason a buyer steps away.
In reference to the second concern the sharks shared, SPL Consulting, LLC’s experience has found many companies know where they are lacking in many instances, but just don’t have methodologies, know how or resources to manage the change effort and sustain it. One of our clients shared “We knew we had issues and what the big problems were, we just didn’t know how to go about making the change. We had a culture of frustration and spinning our wheels. We were good at identifying problem areas, talking about them and not proving able to improve them. SPL brought the “how” to do it. This included not only how to implement change but gave us processes to drive follow-up and verify plans were working and being followed. Most importantly, he showed us how to hold ourselves accountable for execution.”
SPL was honored to speak on the topic of using a lean concept called the Waste Walk as a foundational methodology to help companies “see” wasted time, motion, waiting, etc. The concept is to physically go into your business to observe and watch for the 8 lean wastes. I use this tool as part of every Lean Leadership Training we conduct. On average in a 30-minute observation, we observe 25 wastes. The COO was so moved by a waste he observed during the Waste Walk, that after the training he immediately went back to the work area to help eliminate the waste. This process is now something that all of their leaders regularly do as a requirement of their jobs. These observations shed light on the hidden profit being lost in your business everyday.
SPL Consulting, LLC. has the experience and methodology to help your company navigate these challenges. Whether succession planning to sell or maintain privately, developing true Strategic Action Plans, helping build a culture of execution, or identifying how you can capture improvements to drive up your own valuation and profits, we can be the partner you need. Be your own hero and reach out to explore the possibilities!
Brian Van de Water
CEO
SPL Consulting, LLC.
brian@splconsultingllc.com
