1. Lock in key people – they’re assets
As you start getting nearer to exit, you need to ‘lock in’ people who will be essential to the running of your business and part of your succession plan. Recruiting is expensive in terms of the time needed to read CVs, carry out interviews or employ third parties to assist.
Think about a mix of incentives around near-term objectives for the month, quarter and year as well as a longer-term incentive plan. Far better to take 10 per cent of what you might have spent on recruitment to incentivise employees you’ve already got to stay with you, using an Enterprise Management Incentive Scheme, for example. You’ll have a more motivated and loyal workforce and be more profitable, too.
2. Define roles more clearly
Many businesses get a long way on the goodwill, hard work and dedication of their staff, and an ‘all-hands-on-deck’ mentality.
But there comes a stage in a business’s development when that approach becomes a problem because there’s no clear system as to who owns which part of a job, or who reports to whom.
At some point, you have to draw a line under the way you used to do things when you were a much smaller business. To move forward, you need to have clarity in well-defined roles to manage the volumes of work in a smarter, better way.
3. Get targets aligned with strategy
You may have a strategy, but does everyone know what it is, and understand it?
Think of your strategy as a giant jigsaw: it’s important staff can see and understand all the pieces, so they know where they fit and what actions they have to perform to drive the wider business strategy.
Once you have done this, you can set targets around people, based on their particular piece in the jigsaw.
If everyone is individually targeted correctly, ultimately, they’ll work together to achieve bigger targets within the strategic intent.
4. Drive the right behaviours
Some enterprises get totally wrapped up with incentivising numbers, primarily sales, but this can also drive bad habits, such as discounting, just to get a transaction over the line.
Once your targets are set you need to drive the right behaviours in line with the business’s strategic intent, encouraging good habits will help you acquire better quality new business.
The key is to incentivise people around behaviours to reinforce and enhance business culture, such as offering excellent client services and increasing their knowledge of the business. Then balance this with the numbers, targets and budget.
5. Lead from the front, with passion and direction
Sometimes an owner loses passion, and the business – even if apparently successful – tends to lose direction and slip into strategic drift, allowing complacency to seep in.
Running an enterprise is a journey, so at some point you will exit. Whether that’s planned or foisted on you through ill-health or other reasons, the business has to look after you when you stop working. Ultimately, it’s got to have a value and if you’ve just been drifting along, you’re jeopardising the asset you’ve built up.
Leading can be a lonely and sometimes isolating experience, so ensure you have trusted advisors that you can lean on, not just for business support but the kind of emotional and pastoral care you will need along the way.
Where the opinions of third parties are offered, these may not necessarily reflect those of St. James’s Place.