Growing up, all vehicles had ignitions, doors and trunk lids that all required a single sided key. And there were separate keys requiring you to have at least two keys per car. If you had multiple cars, you needed two keys for each car. If you had several drivers in the family, you had to have several sets of keys to the cars because nobody wanted to share their set for fear of you losing them. That is why you had your own custom key ring so you could fend off others when they were claiming you took their set. Let’s just say that loaning your set to others was always a bad idea and often required a trip to the locksmith or hardware store.
Today, I so appreciate the new technology of keyless ignition. With one button on my fob, I can unlock the car, open the truck and in some cases, start the car. Today’s fobs are multi-functional. They are more convenient and nicely fit in our pockets or purse so the chance of loss is much less. Progress is wonderful, right?
So why am I talking about keys, you ask?
When you transition your business, a buyer wants to know exactly who and where the keys are. Key individuals in your business, their respective skills, talents and abilities, and the roles they play. They are seeking to understand whether you have multi-functional fobs or a group of single keys? In a sale, you are now transferring over the keys to the new entity. The value of them is directly proportional to how effective of a fob they believe you are giving them. The more positions that you have covered with fob’s, the more value that the company will bring. Unfortunately, too many times, the owner is often the fob and the remainder of the staff are single sided keys. This situation ultimately means the buyer has to consider adding a person to the team which is more risky and can cause more friction.
So, the real question is, “what type of keys would you be handing over in critical areas of finance/admin, sales and operations”? Are they talented leaders, managers, and supervisors capable of strategic decision making, critical thinking, and daily execution?
If you are considering a transition soon, providing upgraded fobs to the buyer will mean much greater value to the buyer. As important, talented leaders are your best way to protect the remainder of your workforce. In a sale, the due diligence process is not merely evaluation of the financial health of the company. It is about the talent and culture to produce consistent revenue and profit. They are looking for fob and will dig deep to understand if the players are truly capable of growing the business, especially if you are only around for another year asa consultant.
Want to test your keys to see if it will start your new Tesla ? Let me give you an exercise designed to evaluate performance. Schedule a strategic planning session with your management team and top field leaders. Ask them to develop a business/operational plan for the next 6-12 months complete clear action steps to accomplish the goals. This will require strategic thinking as they evaluate the company, the markets and the opportunities. Ideally, they can accomplish the task and you will have confidence in presenting to buyers that the company can function without you. If they can’t do the exercise, then you will quickly see the need to provide more training or securing leaders that have a higher degree of talent (better fob’s).
One more thing as we discuss the value of fobs. Have you ever had to replace a fob at the dealer? They are pricey. There is a reason. They are more valuable. They have more skills, more talent, and more functionality. And guess what? Most fobs know this. Because of this, buyers will want you as the seller to compensate your fobs well and provide some incentives for them to stay, in addition to any plan the buyer puts in place for them. Remember all those years when you said to your key fobs, “someday I will reward you for helping me.” In a transition, you will be required to do so or risk losing the deal and your fobs.
In summary, keys matter. Single sided keys are the backbone of the workforce and needed to get the daily tasks completed. They are still very valuable. However, fobs or an application button are needed to start todays cars. Leaders capable of strategic thinking and execution. If you have this team in place, you can sell your company quicker and for substantially more value. As important, you are protecting your workforce more than ever with them in place. But remember this fact. Absent a fob, a car will run until out of gas. At that time however, you will need the key to start once again.
The same analogy is true for your businesses today. Without a fob, companies can run to a certain point but will eventually run out of gas. Fobs are the key to ignition, acceleration, and reaching your destination. They are valuable. Treasure the ones you have or seek out the ones you need prior to transition of your business.
If you are considering the sale of your company or desire to take your team on a test drive, give us a call. We love test drives and giving you the confidence to reach your next level and maximum velocity.