Coaching clients to improve their enterprise value
Most entrepreneurs I have worked with are proud of the business they built and have not been afraid to take risks to “grow the business”. However, while most do an excellent job of managing the day-to-day challenges their businesses face – they do a poor job of building the enterprise value of the business. The primary cause of this lack of cultivated value is ironically in three competencies that allowed the business to thrive in the first place.
So, what are those key competencies that drive the business and how do you coach improvement?
Vision – Businesses succeed in great part because they are relevant to their customers. A successful entrepreneur’s original vision strikes a chord with their customers, sales grow and the business takes off.
Drive – The entrepreneur channels and molds the business with boundless energy and focus, they are the force that makes the engine go.
Control – Businesses usually start out with small, tight control where the owner is able to control all aspects of the operation.
These are all critical skills for the growth of a small business. But as the business grows, it is important for the owner to develop new skills that build upon these three core competencies. This does not mean vision, drive and control are less important, rather their scale and scope must change if the business is to thrive and increase value.
A successful company has a mission and vision that addresses and solves a market need. Develop a mission and vision well and with the right amount of effort, your products/services will be relevant to a customer base. Along with relevance will come growth, which requires the business to be able to meet the same standards that made it relevant in the first place.
Secondly, relevance is not permanent. Customer needs and values are constantly changing. Therefore, business owners need to stay on top of trends and conditions that impact their customers. These changes can range from how to simply meet customer demand to how to understanding more complex trends like – how technology, the economy and competitors are impacting their market.
Drive or persistence keeps the engine turning. But energy alone will not keep a company moving in the right direction. Whether businesses are going through phases of growth or decline, it is imperative for an entrepreneur to be attentive to the key drivers of the business. When your client has a good understanding of these drivers they will be able to stay focused on the changes that are occurring within the business or market and can be prepared to address the changes as they come.
When businesses are small, the owner controls all aspects of the operation. But as the business grows, it is impossible to stay on top of every detail. Having control of a process is often confused with doing the process. If a business owner is so integral to the company that it cannot function effectively without him/her, the owner is destroying its value. Your clients need to develop management teams that collaborate and stay focused on the execution of the company’s vision. Defining roles, responsibilities and accountabilities with other members of the company will give its owners more time to work on improving their business, rather than working on maintaining it.
Coaching to Success
One of the biggest challenges in working with clients is getting them to change their habits. The “what got them there” is not going to get them to their goals. They may not even have long-term goals beyond being profitable. Help them move beyond the basics. There are several tools that will help you break through with them.
- If there is not a long-term plan, work with them to develop one. Get to know WHY they are in business so you can help keep them centered and focused on that goal.
- Help them develop objective KPI’s that measure how quickly and effectively the company is moving towards their goals.
- Provide data that tests and corroborates the KPI’s – maintaining relevance and effectiveness
- Help set-up a collaborative structure within the company to ensure that issues are addressed in a timely and proactive manner.
- Have consistent follow-ups. Changing habits and approaches takes time and effort. Consistently holding your client accountable to their goals and objectives will help keep your client on track.
Change is not easy, but it is constant. When you stay objective and consistent with your clients you will be able to help drive your client’s ability to meet their objectives and increase the enterprise value of the company.
A guidebook for helping companies navigate change and build value within the company
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