Ownership Mindset: How your staff could help maximise the value of your business if only you’d let them
In our experience, one of the biggest obstacles faced by owner-managers looking to plan a strategic exit from their company is that of leaving a well-managed organisation capable not only of carrying on without them, but of growing and developing in the future.
The risks of not having your staff onside
In our blog posts, we’ve touched on the subject of employee engagement and how a lack of engagement can have a negative impact on the profitability of your business. But the fact is that poor employee engagement can also make your company less attractive to investment from potential buyers.
Business owners are often puzzled by the lack of commitment shown by their staff but it’s easy to understand if you take a closer look at the potential mismatch between the employer’s and employees’ concerns. Typically, owners are losing sleep over business issues like sales, cash flow, profits and competition, whereas employees have concerns of their own – their pay cheque, job security, getting work finished and asking for time off.
Encouraging employees to think and act like business owners
Organisational change expert, Brad Hams, sees this issue of divergent thinking as one of the biggest barriers to business success. His formula for growth is simple – get employees to think like business owners.
We’ve advised plenty of clients to employ our Ownership Mindset strategy over the years, usually with great success. By giving employees the incentive to achieve results, educating them to understand more about how the business works and offering them the tools to monitor progress, we’ve seen some impressive results.
According to Brad Hams, ‘When employees are given the right tools, information and training to become more involved in the business, the business becomes more profitable – guaranteed.’
A positive move for succession planning
It’s easy to see how pursuing this approach could be a particularly canny move when positioning your business for sale. Not only could you anticipate a level of business growth that is likely to have a positive impact on the company’s value during the succession planning process, but by empowering staff to become more involved, you’re automatically building a strong team that will enable you to gradually take a back seat, freeing up the business for change.
And we think you’ll also find there are more buyers are attracted to businesses run by incentivised, motivated teams rather than those who are overly reliant on their owners.
Getting real results
We recently worked with a company whose three owners wanted to begin down-scaling their commitment while still receiving a solid income from the business. They were frustrated by their inability to engage staff in thinking about the company’s well-being in any meaningful way.
By implementing Ownership Mindset, the partners were able to move closer to their goal of delegating managerial responsibility. As soon as staff began to understand the vision and strategy of the business, it started to become more cohesive and productive.
A large part of succession planning is maximising the value of your company to prepare it for the market. By creating a healthy workplace where efforts and goals are aligned at every level, business owners have the best opportunity to present the very best value proposition to prospective buyers.
What is Ownership Mindset?
Ownership Mindset is a business model which provides design, advice and consulting to businesses who wish to engage employees and create a ‘culture of accountability and purpose’. The goal of Ownership Mindset (OM) is to create an organisation of employees who think and act like business owners. It’s not only about making money, however. Ownership Mindset is also an excellent cultural model and retention strategy. Companies practicing Ownership Mindset retain employees at a 200% better rate than companies that don’t.
This model analyses the four key aspects in your business: Personnel, Knowledge, Systems and Incentives.