What are the key factors to optimise business value?
Value optimisation is all about growing business value. Value optimisation factors are issues within the business that can be planned for and addressed prior to selling that will assist in a smooth sale transaction at the optimum price. The key value areas for your business are growth, performance and succession. By focusing on optimising these areas, your business value will improve.
The path to value optimisation
The following illustration demonstrates the path you can take to optimise the value of your business.
Confused? How do I address these factors in my business?
Take a look at the following table that provides an indication of some of the industry best practice strategies that can be implemented to address these key value factors.
By addressing all of the above value factors, you will improve profit, improve the value of your business, and maximise your position when it is time to sell.
Some of the barriers to improving the value of your business and achieving your desired sale price could include:
- Business being too principal reliant
- Not spending enough time working on your business
- Expenses out of control
- Lack of client segmentation
- Poor systems and processes
- Unrealistic expectations about the value of your business
If any of these barriers are relevant to your business, these should be addressed. Contact your MGI advisor should you require any business coaching or help with business planning.
Disclaimer: this information is of a general nature and should not be viewed as representing financial advice. Users of this information are encouraged to seek further advice if they are unclear as to the meaning of anything contained in this article. Bstar accepts no responsibility for any loss suffered as a result of any party using or relying on this article.
PPPM spells happiness. According to a recent course (University of Texas) ROI and Happiness:
Pleasure
Positivity
Purpose
Meaning
This all leads to happiness in the workplace.
An esoteric concept, no not at all, but one to easily diminish if you don’t care about your people. Remember how you treat your people tells everything about you. We are not talking about avoiding negativity at all costs and pretending to be happy (note: high performing teams cannot carry passengers). Happiness leads to success not the other way around. It’s about being optimistic and resilient, employees are as responsible as employers to achieve workplace happiness. Attitude becomes a more important attribute than skill.
So, what does the science say:
- Happier people are physically healthier so take less sick leave (16 days less).
- Retention improves dramatically.
- Happier people are also more collegial, so they are better team players.
- Happier people are more creative and make better or more objective decisions.
- Organizations with happier employees are more productive and profitable. (outperformed S&P top 500 14 times)
This is why investing in employee happiness is a very smart thing to do.
To start with it would be useful for organizations to gain an understanding of the five main determinants of employee happiness: basic needs, autonomy, mastery, belonging and abundance culture. The issue is having balance, all are important and people perform best when they are in the ‘flow’, their competence is matched to their challenges.
Employees can do even more for their own happiness. In fact, the employee should be encouraged to take the lead.
The health of our relationships at work is more important than physical health in relation to happiness. The science shows, the more you genuinely care for your co-workers, the happier and more successful you are likely to be. Culture is an important determinant of happiness because culture is a feature of the environment and the environment wields a powerful influence over our behaviors.
Simple things the employer can do:
- Create equality among employees.
- Treat external stakeholders, particularly your suppliers well.
- Hire based on values.
- Make mastery part of performance review.
- Give $200 to your employees to personalise their workspace.
- Make employees take their leave.
- Reduce face time at work.
- Reduce too many rules.
Simple things the employee can do:
- Make the effort to stay well (healthy lifestyle).
- Express gratitude.
- Seek happiness outside of work.
- Don’t do work on leave.
- Use your most productive time to be creative.
- Maintain a desire for learning (mastery).
In conclusion, a word of caution, you will be happier at work and hence, more successful. This is good, but if you are not careful, the success can sabotage your happiness. Wealth seems to be especially potent at relationship spoiling. Studies show that the wealthier we become, the less we prioritize our relationships over things like making money and being even more successful.
Are we paddling in the same direction at the same speed (scope, budget and schedule) and not up S##t Creek? How do you build team engagement and what makes an effective team?
Team is a common term that is not practiced well. Some of us have had the good fortune to have been in high performing teams and the memories and relationships are still important to us. Our memories connect us to doing a good job, exceeding expectations, learning, celebrating and having a sense of meaning and belonging. Teams just don’t happen, are often less effective than a group of individuals and can be terribly inefficient.
Basics first, what are the attributes of a team:
- Complimentary skills
- Common purpose
- Shared performance goals
- Mutual accountability
What makes an effective team?
- Purpose
- Clear goals
- Complimentary perspectives and skills
- Process and timings are clear
- Reflective learning and celebration
Problem solving: trust and communication
Tactical: clarity/ directive style
Creative: Freedom/ autonomy
Questions to ask your team regularly:
- How did you feel?
- What did you learn?
- How were you affected?
- What inter-discipline issues should you consider?
A leaders willingness to discuss learnings and openness to constructive criticism will over time, develop team engagement. This social exchange develops trust and a reciprocation of benefits. In the eye of the beholder, perception of mutual obligation develops and how an individual interprets cues and signals from their leader. No cues and signals, no teamwork, failure to deliver on cues and signals is worse than having no cues and signals at all.
In summary, our personal reflections on actions for team-work and what makes an effective team (Bold=Bang for Buck):
- Equal recognition for contribution
- Goals should be measurable and defined for those responsible for achieving them
- Achievement, however big or small, should be recognized and celebrated
- Deal with issues face to face
- Commit fully to goals set
- Act emphatically all the time, but don’t carry passengers
- Reduce the documentation you need to justify delivery
- Simplify language
- Reduce the time it takes to get something approved
- Set expectations around quality, time and cost, then trust your team to find the best way to do the work.
- For long-term growth, focus on new ways of behaving, not new ways of working.
These are not new principles. Check out the biography on Napoleon Bonaparte and one of his quotes was:
‘morale is to physical as three is to one.’
Team engagement and alignment is one of the elements to improve overall performance & offers practical and effective solutions.
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