Rethink your business priorities for the new year

During the festive season business leaders are often thinking about what their key initiatives or objectives should be for the following year.

There can be a lot of conflicting thoughts around this, and we often pile a lot of things onto the ‘to-do’ list. So how do we prioritise these objectives?

For a different perspective, consider what would be important to a buyer if they were going to purchase your business. You may not be considering selling your business, or you may work for someone else. But we all need to deliver value, so understanding a buyer’s perspective may help you prioritise. After all, a business is only worth what someone is willing to pay, and our job should be to increase that value.

While a buyer’s number one priority will be profitability, we need to understand how the business utilises its resources to achieve that profit. These key areas generally revolve around People, Systems and Processes, and having the right blend that not only reduces costs, but maximises returns. Here are some examples:

• Succession planning. A buyer wants to know that the business can be run under management, and not overly dependent upon any individual. Similarly, if your organisation cannot survive without you in your current role, then it is unlikely you will ever be promoted or be able to take on new challenges. What processes can you introduce to improve efficiency? What systems can reduce or eliminate human input? What people can be upskilled to fill certain gaps? While making your role redundant may sound counterintuitive, it is this skill set that is highly valued in any organisation.
• Outsourcing. These days you can outsource anything, which allows you to focus on your core strengths. As Peter Drucker* points out, a person can only perform from a position of strength and should not waste time improving areas of low competence. Outsourcing allows you to change the structure of the ‘people’ bucket to reduce overheads, and better align your resources.
• Automation. Is about shifting resources out of the ‘people’ bucket and reallocating them in more efficient ways through ‘systems’ and ‘processes’. A prime example of this is the sales/marketing functions. A recent poll by Wharton University of Pennsylvania found that 43 per cent of executives struggle with technology and data, and retain most of the practices they have been using for decades. What buyers value these days is a system that increases reliability, reduces cost, and increases effectiveness. This usually means a good use of technology, reduced reliance on people, and an intelligent way of mapping the customer experience to achieve an outcome.

We all face challenges in business, so consider what a buyer would be think if they were to pull back the curtain and look at your operations. You may be surprised at what priorities rise to the surface.

References:

Drucker, P. 1999, ‘Managing Oneself’, Harvard Business Review, Best of HBR, January 2005, pp. 100-109.