Understanding Your Business: A Guide for New Owners and Executives
In today’s ever-changing world, leadership and ownership transitions are common. Whether you’re a new owner or a new executive, assessing your operation is crucial. While your motivations may differ, the approach remains the same.
As a new owner, you’ve likely conducted due diligence, focusing on the balance sheet, assets, and financial performance. However, if the company is underperforming and undervalued, what operational changes are needed to increase its value?
As a new executive, you’ll face pressure to enhance the company’s financial performance and leave a lasting legacy.
Regardless of your role, both new owners and executives must assess the business to increase the financial position and improve the organizational value. Here are four key areas to focus on:
Understand the End Goal:
Identify the drivers that impact the organization.
Understand Your People:
Recognize that people drive the organization forward.
Evaluate the culture and determine necessary changes.
Assess leadership behavior and alignment.
Gauge the capability of your team.
Understand the Organization:
Analyze the structure and its impact on your goals.
Identify influencers and informal leaders you can rely on.
Understand How the Work is Done:
Examine the systems of work, including operational KPIs tied to financials for predictive insights.
Review processes and technology in use.
To verify your understanding, follow this simple approach: Hear it, See it, Prove it.
Hear it: Talk to employees.
See it: Observe processes and interactions where the work is done.
Prove it: Form hypotheses from observations and conversations, then validate with data.
Next, identify changes that will have the most significant and immediate impact. Develop a staged approach with milestones and build a coalition of informal and formal leaders to drive positive change.
Most importantly, once you’ve established your path, communicate consistently and through various channels. People learn in different ways, so ensure your message is heard, seen, read, and spoken multiple times to make it stick.
