The Infantry closes with the enemy by means of fire and maneuver in order to destroy or capture him or to repel his assault by fire, close combat, and counterattack […] This close personal fight requires combat-ready units composed of skilled soldiers and resourceful leaders. These units are the result of a tough, thorough, and demanding training program conducted by leaders who understand the effective employment of infantry forces.1 (emphasis added)
Does this definition apply to business? Does a business need skilled workers, cooperating to achieve a clear goal? Will effective employment unleash growth and equity value? Yes.
Read Lencioni, Wickman, Harnish, McFarland et al2 and you’ll conclude that as in war, people are the heart of business. People need to be trained, understand their role, be accountable to defined goals, and have an esprit de corps (call it core values, company character, or culture).
While crafting the Growth Planning curriculum it quickly became clear that the performance of people --Employees as well as the Senior Team-- are the #1 consideration in planning growth, in making a company easier to run, and if planning to harvest the equity value of a business. People, the Queen of Business.
“Growth Guy” Verne Harnish states the decisions around growth must account for “People, Strategy, Execution, and Cash.” He starts with People, and adds the following: “Focus on getting the right people doing the right things with clear accountabilities and metrics.”3
Do you want to help your client with Growth Planning? Since People are the Queen of Business, how do you decide if your client has ‘People’ well in hand? You need to analyze (1) where your client wants to go, by using the Growth and Equity Quadrant Analysis (dropping in 14 days), and then (2) where their operations are today.
Pulling from the operational analysis, here are the ‘People’ best practices for a well run business.4 As you read, ask yourself “If my client meets best practices, can they get the right people doing the right things to meet the CEO’s goals?” Our data shows the answer is a resounding “Yes.”
Best Practices for ‘Human Resources’ --the right people doing the right things. Numbers refer to the CoreValue Drivers in the generally accepted and patented methodology --a sample from five of the eighteen total CoreValue Drivers.
16:1. Throughout the company there are clear and understood roles and responsibilities for each employee that support the company's goals and objectives.
16:2. You have a standardized, efficient, and effective process to staff the company [...]
16:4. You have documentation and processes to ensure effective administration and employee relations.
16:5. You understand and follow compensation best practices for your industry [...]
10:2. If asked, your employees can succinctly communicate (verbally and in writing), what the company does, why, and how.
10:8. Your company has a positive and adaptive culture that is aligned with and supports your company's goals.
12:4. (Re people and process for growing revenues) You have a sales plan and repeatable sales process to deliver your company's revenue goals that are well-developed, managed, and executed. [...] You have a sales compensation plan that is motivating, easy to understand, and doesn't change frequently.
What of the Senior Team? Whether your client’s goal is growth, to make their company easier to run, and/or to mitigate equity planning risks from the senior team, here are selected best practices.
Best practices for Senior Management: Your company has a leadership team in place to realize the company's vision and mission while helping the owner achieve his/her objectives.
15:1. Throughout your company, there are clear and understood roles and responsibilities for senior managers that support the company's objectives.
15:2. The company can run effectively without the CEO.
15:3. The senior management team effectively works together to deliver company goals and objectives.
15:4. Senior management compensation is competitive and tied to individual performance against company goals and objectives.
15:5. You have a personnel plan in place for each senior manager that ensures a smooth continuation of the business in case a change in senior management occurs. (Note that for employees this consideration is handled by CoreValue Driver 16:2, above.)
By meeting these standards:
- If the goal is growing revenues and value, the senior team and employees know where the business is going and their personal role in- and accountability to growing
- If the goal is making the company easier to run, your client has created the processes and accountability to delegate responsibilities to a senior team that is managing focused, motivated employees
- If the goal is preparing the company for sale, your client will have (i) mitigated company specific risks from employee and senior team performance, (ii) provided for retention and scale, and (iii) positioned the business so that the subsequent owners have a foundation for future growth.
Do you want to have an interesting conversation? Read through the numbered best practices, and rate your client from 1-5, “No” to “Yes” -and you cannot use the equivocating number 3. What have you learned? Would this learning help your understanding of the 'people' part of growth planning? Yes it will.
Employees are the Queen of Business --as in chess, driving the win when deployed by a committed team focused on a clear goal.
Upcoming Events
- CoreValue Business Advisor Conference, Nov 6-7. Info
- Growth and Equity Planning QuadrantTM drop, Nov 6 (publication to follow). email support@corevalueforadvisors.com to join the updates list
- Demo: Introduction to CoreValue, Oct 30. Register here
- Webinar: Marketing Tactics for Business Advisors. Nov 12th. Register here
- Webinar: CoreValue's Proven Process for Winning New Engagements, Nov 14. Register here
[1] https://www.globalsecurity.org/military/agency/army/infantry.htm
[2] Link to CoreValue Advisor Software recommended reading list
[3] https://gazelles.com/article/4-decisions-that-will-help-your-company-grow
[4] CoreValue US Patent 9,607,274
