All things being equal, higher revenue and a better bottom line increase the value of a business and its appeal to potential buyers.
How we get there will be the focus of our next few posts. But first, I’d like to take a short detour. I recently read Good to Great, written by Jim Collins.
What follows is a summary of his concepts for taking your business and business worth from good to great.
Criteria for moving from good to great and adding value to your business
1. Combine personal humility and professional will to build a company that can run without you, rather than being indispensable.
Have ambition for the company and what it stands for. Your sense of purpose goes beyond your own success– build a company that can tick along without you. Focus relentlessly on tangible results and achievement.
2. First Who… then What: start by getting the right people on the bus and the wrong ones off; then get your team’s input on where to drive the bus.
Select top performers that share your company’s core values and purpose, providing a basis for promoting from within and further reinforcing core values.
3. Confront the brutal facts of your current reality. Sustain faith that you will prevail in the end.
Create a climate where truth is heard, particularly at the top. Clarify what must be done to stimulate progress. A Master Mind Group or Council like The Inner Circle where other business owners provide peer mentoring to help you clarify your vision and take appropriate actions.
4. Develop a simple, clear concept and consistently make improvements in systems and processes that improve performance. (See the related diagram where the three circles intersect.)
Determine what you can be the very best at (even if you are not already in that business); equally important, what can you not be best at.
Determine what drives your economic engine, what is the single denominator with the greatest impact on your results? What are you passionate about?
Use your Inner Circle group to help you crystallize your vision and hold you accountable on your quest to make it reality.
5. Develop a culture of discipline built around commitments, giving staff freedom about how to meet those promises.
A culture of discipline ejects those who do not share the values or standards of your organization.
6. Carefully select technology to accelerate momentum towards achieving your company’s goals.
Technology is subservient to core values.
7. Consistent, repeated actions and behaviours will achieve revolutionary, dramatic results over time i.e. achievement of a BHAG.*
Like incremental pushes on a flywheel, the company builds momentum from evolutionary, incremental efforts towards what it wants to become. The momentum keeps increasing at an ever faster pace until it hits breakthrough. Eventually momentum takes over.
Although Good to Great was written a decade ago, it remains relevant, standing the test of time. I hope the concepts encourage you to start making the changes that can take your business and your life from good to great, or, as the Inner Circle says, “Better Business, Richer Life”.