Tag Archives: Stakeholder

How Do You Generate Buy-in as You Change the Business Model? Six Points

Situation: A company is changing its business model from fee for service, driven by individual contributors, to a contracted project model with teams delivering service. The driver for the new model is to deliver full solutions to meet client needs. The CEO is struggling to obtain buy-in to the new model from all stakeholders – employees, managers and shareholders. How do you generate buy-in as you change the business model?

Advice from the CEOs:

  • The objective is to obtain agreement on vision and direction as the company adapts over a 3-5 year horizon.
    • Benefits include: product vs. service sales, a growing annuity revenue base, increased stability for the company and improved career paths for all members of the team.
    • Risks include: massive change, fear accompanying any change, too rapid growth, and the changes to company culture that will accompany this
  • Acknowledge and celebrate what the company and team have done well and the success that this has generated. In addition, share the lessons learned from experience to date, as well as the new opportunities that these lessons have created and the reasons to change to take advantage of these opportunities.
  • Create an exciting vision that expresses the new opportunities. Consider an off-site “WOW” event to announce your vision.
    • Focus on what’s in it for them as stakeholders. Address how they can participate in the change.
    • Where are the opportunities? Do they include investment and ownership?
    • Focus on the next major steps and the doable objectives associated with each step.
  • The new direction will require a different type of manager – with skills and experience managing teams. This is a growth opportunity for all involved. Provide training to assist the transition.
  • Employee and manager skill sets (including the CEO’s) will need to adapt – identify what skills will be needed and how they can be found or developed.
  • The past culture has been highly entrepreneurial with little middle management. The new model may be different from the current model, but it can still be entrepreneurial in a different way.

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What Questions Do You Ask to Build an Exit Strategy? Five Topics

Interview with Norman Boone, CEO, Mosaic Financial Partners

Situation: Many entrepreneurs who started companies in financial services and other industries are now 55+. They may be ready to move on, but not necessarily ready to move out. What questions should they be asking as they plan their exit strategies?

Advice from Norman Boone:

  • The most critical question is what you want to do with the rest of your life. Most people don’t give this enough thought. It all starts with what is most important to you.
    • Start with a self-inventory assessment – what are your resources, options, and what do you want to do or accomplish?
    • Discuss with your significant other or partner what will work for both of you.
    • Answering these questions helps to lay out the alternatives. Now, thinking about your company, what is important to you? Is it legacy, the future of your employees and business partners, the future of your clients?  Does your business continue, or to you see a sunset?
  • If your business will continue, do you see an internal succession, or sale or merger of the company? If internal succession, here are the issues.
    • Who will be the new leadership? Do you have good candidates on staff, or do you need to hire someone who will take over?
    • Be careful not to expect your successor to be a mini-you. They need to be able to bring their own talents and perspectives to the leadership role, not try to duplicate you.
    • Do you need to beef up the training of current staff to increase their managerial capacities?
    • Is an employee buy-out an option? There is a variety of choices to investigate.
    • What will be your role during and after the transition? Will you accept that new leadership may take the company in new directions?
    • To be most effective, this needs to be a 5 or 10 year process. Ideally you will have two to four successor candidates to evaluate.
  • Do you sell to the highest bidder? Many of the questions here are like those above.
    • Will you sell to the highest bidder, or to the bidder who seems the best fit for your stakeholders and clients?
    • How much voice, if any, will you offer your employees and / or clients in the selection process?
    • What due diligence will you do on potential buyers?
  • Do you merge with a similar company?
    • If you can find a compatible merger partner the combination may be the best of two worlds.
    • What is the culture? If different, what will be the impact?
    • A merger of like companies may assume that the other party has a commitment to ongoing operation: but this is not guaranteed.
    • What will your role be, and what is the transition plan? How will you involve your key people in the transition?
  • The other option is to sunset the company. Here you must have enough in savings so that you can forgo future income from the business.
    • What about the other stakeholders and clients who’ve invested their careers and business in you?
    • Try to time your exit with the expiration of leases and other obligations to minimize exit cost.
    • How will you assist the transition of stakeholders and clients to new opportunities and providers?

You can contact Norm Boone at [email protected]

Key Words: Entrepreneur, Retire, Exit, Self-assessment, Options, Alternatives, Succession, Buy-out, Sale, Merger, Sunset, Staff, Stakeholder, Client, Plan, Control, Culture

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