What is Winning?
In baseball the winner is not the team that has the most hits or strikeouts, it is the team with the most runs. In bowling it is not the team with the fewest gutter balls or the most strikes, but the team with the highest score.
The game of business is similar. It is not the company with the most revenue growth, or best customer satisfaction metrics or even profit margin that wins. Ultimately winning is based on what the company returns to the investor.
Every business will eventually transition leadership and ownership. At every transition, stakeholders are impacted. Transitions are a day of reckoning.
Enhancing the market value is not the same as growing revenue and profits. A company can have consistent revenue growth or solid profits, yet be still be under-valued due to situations that are not measured in typical financial reporting:
Value is discounted conversely by the level of personal effort required from the transitioning leaders. If they must invest personally to keep day to day operations running, it’s a negative for the next generation.
Over-reliance on select few customers, combined with high bottom line risk if your company loses one of these customers always discounts company value
Low retention rates for key employees leads to a lower valuation.
When it comes to improving the market value of a company, first you must understand how an external investor will perceive the investment. Strategy is developed from understanding what makes a company attractive to a typical investor (i.e. curb appeal), and then reverse engineering a plan to achieve the best curb appeal possible given circumstances.
Winning starts with understanding how the game will be played. It concludes when your company is awarded a value.
We Play to Win.