managing through change

Top 5 Tips for Managing Through Change Or What I Learned While Attempting to Surf

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There was a time in the not-so-distant past when executives had a simple goal for their organizations: stability. But market transparency, instantaneous communications, labor mobility, and global capital flows have swept this comfortable scenario out to sea. In most industries and in almost all companies—from giants to micro-enterprises—heightened competition from new markets have forced management to concentrate on something they happily avoided in the past: change.

Companies today need to figure out how they can capitalize on uncertainty. Success in this era means managing through change. A solid, static plan just won’t cut it. So rather than trying to plan for the inevitable and manage the change, leaders should turn their attention to managing through change.

What does managing through change look like?

Good question. I was recently thinking about this idea while on vacation—as one does. While it’s tough to come up with a one-size-fits-all methodology that fits every organization, perhaps a metaphor is a useful place to start.

Surfing and Change

My husband is a surfer. While he doesn’t get to surf as much as he’d like in D.C., we often spend vacations on the water. He surfs. I attempt to surf and spend a lot of time watching surfers and thinking about business metaphors.

On a recent trip, while I was bobbing in the ocean waiting for a wave (okay, more honestly, I was trying to catch my breath after falling and paddling back out for the hundredth time), I got to thinking about how surfing is like managing through change.

The best surfers are masters at riding the big waves. They know better than to try to manage the waves (I’m not even sure what that would look like). They don’t spend a lot of time hoping they’ll be able to stand up or planning to use the very best technique to balance on the board. They feel the flow of the ocean way more than they manage or hope or plan.

In broad terms, this is what it’s like to manage through change. Instead of bracing for the bump, skilled leaders accept that rough waters are coming, learn to embrace the change, and engage their entire organizations.

managing through change

Now let’s try to move past mere metaphor, shall we? Rather than offering a single methodology here, what follows is a “Top 5” list of best practices and guiding principles that can be adapted to fit a variety of situations calling for managing through the change.

1. Watch the sets come in.

In surf lingo, “set waves” refers to a group of larger waves. There’s a rhythm to the ocean on any given day or time of day. As you keep an eye on the horizon and watch these sets coming through, you start to get a feel for the rhythm and begin to prepare to catch a ride.

There’s also a rhythm to markets and if you watch the trends, you will get a feel for it. Managing through change means anticipating market trends and developing flexible strategies to prepare your team for what’s coming. In a highly competitive environment, that means going deeper than your competitors. Is there an untapped resource, you’ve had your eye on for some time? Perhaps it’s time to bring in that consultant or find another way to infuse fresh ideas.

In addition to being prepared for market trends, set your expectations. There are times when pulling back and being a bit more conservative is the right move. But this can be a hard pill to swallow, especially for highly competitive leaders and teams. So set the expectation from the outset: choose a date (or other benchmark) by which time to make a decision. Until then, maintain awareness, anticipate what you can, and prepare.

2. Be in position to catch that wave.

Sometimes the waves in business and on the ocean roll in more slowly than you would like. The “hurry up and wait” cycle can get old. So, make sure you are taking advantage of the waiting periods to understand where you are, what the wave (AKA change) looks like, and where you want to be at the end of your ride (i.e., you want to avoid being smashed into the rocks!).

Knowing your goal and having your exit strategy is just as important as riding that big wave as far as it wants to take you. Get in position by creating a game plan that’s flexible enough for your purposes:

  • Define success carefully. Consider the ideal goal, but also what, at a minimum, will count as a win. Be generous.
  • Do your market research. Don’t skimp on this step! Rushing into a big change without doing the right research sets everyone up for failure.
  • Understand your strengths and weaknesses. Transformation affects every level of your organization. Make sure you identify leaders early in the process and give them the tools they need to execute their specific missions. Also, look for any gaps in communication across departments. Strategize about how to create more cooperation.

3. It takes more work than you think to catch that wave.

Paddle harder (or, as my husband says/yells, “paddle, paddle, paddle, paddle!”). Once you know you are in the right position and ready to catch the wave, the real work begins. You have to dig deep and do the work to catch that wave, so you can jump up on that board. Then you have to dig deep again to maintain your balance and ride that wave.

We know all too well that market forces shift. So even if you brilliantly complete the first two steps above, the market can suddenly leave you stranded alone on a deserted island. Alternatively, if those market forces do hold in just the way you were hoping, you’ll likely run into others surfing the same wave. So you need to be ready to adjust to markets shifting AND to competition shifting.

4. Waves don’t always do what you want them to do—be ready to adapt.

Change projects, like big waves, pick up momentum as they build. If you aren’t prepared to adapt, things can get out of control quickly. This means leaders at all levels of the organization must be empowered to rapidly adapt.

Successful startups are often successful because they have mastered the art of managing through change in precisely this way. Their agility gives them a huge advantage over large competitors in a market that rewards adaptability. But even giants can adopt and modify plays from the startup playbook.

For example, what is the status of your innovation pipeline? Is there an effective process for employees at all levels to introduce ideas up the chain? Is the culture such that employees feel motivated, heard, and supported in suggesting innovations?

5. Enjoy the ride and watch the view—you earned it.

In the midst of all this, don’t forget to savor the moment. Even if you only manage to ride the wave for a short time, take pleasure in the fact that it was your hard work that helped you see this new vista. And, appreciate the hard work that it took to get there. Going through the process has given you insights that you can use in the future too.

Finally, get ready to do it all again. Change, like waves, keeps coming.

While the Audacia Strategies team can’t promise to teach you how to surf Banzai Pipeline, we are experts at helping firms of all sizes manage through big waves of business transformation. Hey, we’ll take our inspiration wherever we can get it! If you’re looking for a bold team to help you build your way through change, contact us and let’s set up a consultation.

Photo Credit: IKO / 123RF Stock Photo

business valuation

Don’t Sell Your Business Short! Find the Right Business Valuation and Sell Your Vision.

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Imagine if a big shot investor walked in the door today and offered to buy your company. How would you respond? Would you blindly tell her to make you an offer and then consider whether it’s enough for you to retire? Or is your business valuation clear in your mind, such that you could seriously start talking numbers?

If you don’t know how to value your business, you risk being taken advantage of, even if the amount an investor offers sounds really good to you. One thing is for sure, the numbers don’t lie, so it’s important to know them or to at least know how to access them when you need to.

Whether you’re considering selling your business in the near future or simply looking for ways to increase your value, figuring out your current business valuation is the place to start. So, what do you need to know?

How to determine a business valuation:

If you are even a tiny bit familiar with the world of corporate finance, it will come as no surprise that there are several ways to value a business. There is a plethora of valuation metrics out there: EV/EBITDA, P/E, PEG.

Your finance team can help you decide the right valuation metrics for your business. However, basic business metrics are the building blocks of all valuation. Here is a short list of the metrics that will inform your business valuation:

  • The value of the business’s assets. Included here is whatever the business owns: any buildings, equipment, product inventory, patents, logos, and cash on hand. Your balance sheet should tell you the value of your assets. An investor or potential acquirer will ask to see your balance sheet – and the rest of your financial statements. Be ready.
  • Revenue. Many investors use revenue as a quick assessment of a firm’s value. A quick method they might use to estimate the value is to employ a revenue multiple. A revenue multiple is simply a calculation of the offered valuation divided by one year of revenue. For example, if you have $100M in annual revenue and your valuation is $1B, your revenue multiple is 10x. Benchmark multiples vary by industry. You should ask your finance team to research typical sales multiples in your industry.
  • Earnings. Of course, revenue doesn’t equal profits. Amazon is the most famous example of this. Despite revenues being through the roof, they have only posted a handful of profitable quarters. This is why earnings matter and why multiples of earnings may be a better way to estimate a business’s valuation.
  • Cash-flow analysis. Finally, revenue and earnings valuation are only a good way to value a company if you can prove they will remain steady. Changes in competition, supplier prices, and industry trends all affect earnings. It’s important to reflect these in your cash-flow projections to demonstrate the rationality of your narrative.
  • Nonfinancial considerations. The above techniques will help you value the financial side of your business. But, as we know, nonfinancial considerations also come into play. Any research you can do into potential investors’ portfolio, could help you get a better valuation. For instance, does the investor own other businesses in your location? Does she own similar businesses? Has she put the word out that she has always dreamed of owning a business like yours? You can use any of these intangibles to your advantage to influence the sale.

Beyond business valuation to selling strategy.

Once you know your numbers cold and you’re ready to sell, it’s time to come up with a strategy. Without taking the time to strategize, you risk letting fatigue or anxiety influence your decision. So make sure to take a deep breath and hold on tight to your strategy.  

Whenever I advise clients dealing with this type of transformation I recommend the following:

1. Take the time to get ready. Beyond getting your accounting, contracts, and legal documents in order (which you should absolutely do!), also consider how you talk about your business.

Do you have a clear, concise, and impactful elevator pitch? At this stage in the game, chances are good that you have this. But it’s good to remember that first impressions count now as much as when you’re first starting out.

If you can you introduce your business such that anyone can understand it, the first impression is that you have your act together and the rest of your business operations are equally well run. This is good!

Can you simply and easily explain your business model, competitive positioning, and prospects? Take the time to review your business model, market dynamics, and business pipeline. Look for trends—past and future. Again, the clearer your business model and prospects the easier it will be for a prospective acquirer to understand the current and future potential of your business and the better your opportunity to improve your valuation.

2. Look from the outside in. I often see business owners that are so caught up in running their businesses that they cannot see how their businesses look through the eyes of their customers, business partners, and—yes, valuation experts.

It can help to ask for external perspectives. Ask your employees (especially those who are customer facing), customers, business partners, community partners, etc. about their perspective on your business. Do not get defensive. This is an intelligence gathering exercise, think of it as nothing more or less.

Use the information gathered to help shape your clear and concise business messaging (see above).

If there are differences between the feedback and your perception (or your desired perception) of the business, consider a gap analysis to address any fundamental misperceptions. Here are some easy-to-use templates for getting started with a gap analysis.

3. Consider your promotion strategy. You wouldn’t sell your house without clearing the clutter, giving it a fresh coat of paint, and engaging a crackerjack realtor, right? Business valuations are similar.

Review your external face to the market (e.g., website, sales materials, business cards). Are they dated? Do they reflect your business in a positive light? Take the time to make your promotional materials work for you. Yes, this will be an added expense, but again, think of it like making cosmetic improvements to your home to get you to a higher price point.

If you have time, engage in a promotional strategy to raise the visibility of your firm and demonstrate market leadership and awareness. This won’t apply in the case where an investor walks in ready to write you a check, but that’s also not the most likely scenario.

By elevating public perception of your business, you improve your market positioning, customer awareness, and you may also increase your new business pipeline—all important factors as you enter into a business valuation.

The above is really just to get you started down the path of valuing your business. For a more comprehensive guide (complete with helpful valuation worksheets), see Jeff White’s How To Guide. Audacia’s CEO, Katy Herr was quoted in the article too!

And if all of this sounds completely overwhelming, take a step back and take a deep breath. Finding a business valuation that not only reflects your sweat equity, but also sells investors on your vision requires patience. Honor your hard work by taking the time you need.

Finding an expert who has been through it can make a big difference in your confidence level too. At Audacia Strategies, we can work with you to get your numbers straight and weave them into a narrative that reflects your complete business valuation. Let’s discuss your vision!

Photo credit: rido / 123RF Stock Photo

iconic brand strategy

Don’t Launch Your New Brand Until You Read This!—Everything You Need to Create Your Iconic Brand Strategy

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Picture this:

The light bulb suddenly goes off and you have an amazing idea for your next iconic brand strategy. You’re so excited! There are logos and taglines and websites, oh my! There is social media marketing to consider. You have all of your ducks in a row…or at least, you think you do.

You launch your new baby out into the world and prepare for it to become iconic. And, maybe it will be. But it’s probably going to take a lot of behind-the-scenes work to make that happen. There is a good reason seasoned entrepreneurs often say, “It only took me 10 years to become an overnight success.”

The problem is that it’s easy to get caught up in the excitement of creating something new and to forget that becoming an iconic brand requires a lot more than a great logo, tagline, and website. All of that shiny stuff is really just window-dressing. The research, positioning, and messaging are the real nuts and bolts behind an iconic brand strategy.

So how do find the discipline to lay the groundwork for success before you let yourself get swept up in the more glamorous side of launching your new brand?

First, it’s important to keep in mind that just because you need to do the hard groundwork, that doesn’t mean you can’t also reward yourself by working on the fun stuff, like planning the huge launch party you’re going to throw when you’re ready to announce.

As you read through the below list, it’s natural to feel a bit overwhelmed. But rest assured that if you take your time and insist on being intentional as you work through this process, you will be overwhelmed (in a good way!) by the end result.

Key Considerations for Launching Your Next Iconic Brand Strategy:

1. Start with the basics: Is there a market? AKA look both ways before you cross that street.

Whether you are creating a brand strategy for a new product or for an extension of an existing product line, it’s important to do some serious research into the potential market that you will want to tap into. There are three important areas to consider here.

A. Market/situational awareness:

Research the current tools, technologies, services, and work-arounds. Positioning your brand in the market requires extensive understanding of what else is available. You will be looking to gain a share of these markets.

Ask the following questions about existing brands and peers:

  • What works/doesn’t work?
  • What’s the broader discussion? Are companies/thought leaders talking about this capability?
  • Where is the solution on the technology cycle (cutting edge vs. mature)?
  • Is there pending legislation or regulation that may shift the market dynamics?

B. Market segmentation and prioritization:

Once you have a handle on what the market looks like, dig deeper. Get as specific as you can about what your real target market looks like. Segment different target groups in the way that makes the most sense for your brand. Prioritize, i.e., figure out which of these groups to target first, second, third, and when. Finally, determine each segment’s pain points and specific challenges.

Ask yourself:

  • Who is my specific target market? How do the buy? When? Why?
  • Where are these customers? Consider industry, customer size, geography, innovation requirements, you get the idea.
  • What are the customer pain points our product solves?

C. Competitive analysis

The last piece in the market puzzle of your iconic brand strategy is doing a thorough competitive analysis. This will help determine how to position your brand both in terms of the current market landscape and projecting into the future potential shifts.

Ask the following about your competition:

  • Who are they?
  • Where are they (physical locations, virtual locations, operational status)?
  • How big are they?
  • Market share (try to get at least a notional sense)?

2. Now, go deep inside your business. How will your new brand change your operations?

Depending on how much of a transformation you plan to make as you build your iconic brand strategy, this will take a good mix of pragmatism, creativity, and a bit of speculation. It helps to bring in your team to get a full picture of potential business impacts.

As an example, you might consider if you need to make changes to your business structure.

  • How will you need to structure your current business to accommodate the new brand?
  • Or is this really a new business/company? A spin-off? A joint venture? A product extension?

3. Prepare your brand messaging–this is huge!

Messaging can be the difference between launching a successful brand and launching an iconic brand. It’s the difference between a basically reliable casual shoe and a Nike. Try to figure out what unique value your brand offers and more importantly, how to get the word out. This may take some trial and error. Above all, make sure your messaging reflects your brand promise.

Here consider:

A. Value Proposition

  • Why us?
  • Why now?
  • What problem do we solve?
  • What pains do we alleviate?

B. Brand promise

  • What are you offering your buyers? Why is it important? What does your brand stand for and why?

C. Positioning Statements

  • How do our priority market segments prefer to receive information?
  • What is the tone they prefer?
  • How can we signal social proof?

D. Message Architecture

Think of message architecture as scaffolding for all of your marketing content. Your message architecture or framework will support and shape all the content you produce going forward. When marketers and communications pros talk about messaging, they are talking about the general impression they want customers to take away from the content itself.

When it comes to designing the message architecture, a good rule of thumb is to keep it simple. This article from some content experts is a good place to start and it offers a number of useful examples.

E. Elevator pitch – you have 15 seconds in an elevator with your dream client – what do you say?

Every new brand needs a catchy elevator pitch. This should be easy once you’ve done all of the research and analysis above.

4. Brand Identity — most people skip directly to this step, but putting in the upfront work is critical to developing an iconic brand strategy.

This goes beyond the broader messaging to even less tangible elements. Your brand’s identity is really the public perception of the brand. A lot more than words on your website goes into your brand identity. Unfortunately, some of this is out of your control, but you can learn to influence this if you really study corporate communications or find someone else who has done so.

Here the following are crucial:

A. Is this a stand-alone solution or does is it part of a family/suite of products/solutions?

B. Reflect on your market research and align to your aspirational positioning.

C. Consider whether you need/want a tagline — a tagline can be a powerful brand discriminator and shorthand for what’s unique about your brand.

D. Don’t forget to reserve your URLs!

5. Launch Strategy — get ready to be big!

Yay! Now that you’ve put in the real grunt work, you can start to plan the launch strategy for your new brand. I offered some good tips here in a recent blog post. And just imagine how much confidence you’ll have gained once you’ve completed the list above.

I know that this all sounds like a ton of work and it is! But this is your baby. What could be more rewarding and satisfying than watching your idea grow from a thought bubble into a household name?

New brands are exciting and can be overwhelming. We get it. Audacia Strategies has been there. Let us be your guide through launching your next iconic brand.

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Executive Transition - Handshake

Executive Transition Part I: Planning is Not Optional

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Stakeholders can learn a lot from watching an organization go through executive transition. Handled well, c-suite transitions impart confidence in the organization and its future direction. Handled poorly, leadership changes can alert investors to bigger issues within the organization, whether material or merely perceived.

The c-suite (i.e., CEO/CFO, for our purposes today) is the public face of an organization. According to the 2015 Edelman Trust Barometer, an annual study on global trust and credibility, 43% of people say that they trust the CEO as the spokesperson of the company.

Executives embody the credibility of the company. There is a good reason transition of these key leadership roles is watched so closely: as the c-suite goes, so goes the health of a corporation.

In Part I of this two-part series, we’ll talk about the planning and announcement of an executive transition. Stay tuned for Part II when we’ll discuss how to prep your new executive for primetime.

Executive Transition = Financial Risk

We all know there could be any number of perfectly benign reasons for an executive to choose to leave a particular company, knowing this doesn’t make an executive transition any less of a risk in the eyes of stakeholders.

While you may feel energized by the winds of change blowing through your organization, from the perspective of an investor or a customer, a change in leadership introduces an unknown variable, which is just a different way of saying financial risk.

When the current CEO is performing well, there are questions about whether her successor will be able to maintain the momentum. When the current CEO Is performing poorly, there are questions about how quickly her successor might be able to turn things around.

A leadership change can also be unsettling to employees, since the CEO is the cultural leader of an organization. So transitions also raise questions about the cost to organizations in terms of human capital.

Since all eyes are on you, c-suite transitions are really make or break. It’s so important for these types of big changes to be planned and carefully orchestrated. Okay, let’s talk strategy!

2 Types of Transitions: Planned and Unplanned

There are really just two types of c-suite transitions: planned and unplanned. You should have a plan either way! (Now is probably a good time to review my recent post on Crisis Management.)

There are unique challenges associated with each type, but with the right transition strategy in place, you will be equipped to manage unfolding events as much as possible.

1. Planned Executive Transitions.

If you have the luxury of knowing that a c-suite transition will take place, make sure you have a plan to communicate and acclimate external stakeholders (e.g., shareholders, customers), as well as employees.

While executive transition is generally viewed as a risk, there are steps you can take to minimize the risk in the eyes of investors. A well-considered transition plan indicates a healthy corporate succession plan aligned to the company’s stated strategy.

Additionally, if you have the benefit of time and a transition period of anywhere from a few weeks to a few months, it’s an opportunity to engineer a smooth hand-off between executives.

Joint meetings with current and interim leadership, as well as investors, customers, and employees are a strong signal of organizational health during transition. Consider what will infuse your audience with the most confidence.

2. Unplanned Executive Transitions

If a CEO/CFO must step down unexpectedly, be prepared. This means being ready to communicate quickly, transparently, and as completely as possible. At the very least, I recommend having the interim leader identified along with his qualifications as soon as possible and preferably simultaneous with the transition announcement.

You should also discuss the Board’s search process for a permanent leader and criteria for the next leader. Also, discuss Board strategy—particularly, if the transition is a result of the Board wishing to move in a new direction. If possible, a broad timeline for a decision will also help calm stakeholders as there will be key milestones and communications to watch.

It’s always important to communicate as much as possible, as transparently as possible. But during times of executive transition, strong communication is absolutely essential. Communications that appear to be less than forthcoming and/or light on path forward will only breed rumors and ramp up perceived risk.

Keep this quote at the forefront of your communications strategy:

“If you don’t give people information, they will make up something to fill the void.” – Carla O’Dell, Ph.D., President, American Productivity & Quality Center

There will be questions, calls, emails sent to IR, CEO, CFO, CCO, and anyone who can be reached. Make sure that appropriate communications roles are established and shared. This responsibility will generally fall to media relations and investor relations.

Don’t forget about timing

Whether your executive transition has been a long time coming or out of the blue, your communications strategy for transitions should also include strategies around timing. In corporate communications, timing really is everything.

For instance, unexpected transitions raise questions about an organization’s financial health. One way to ease this concern is to consider timing the transition announcement to coincide with a quarterly release. If such timing is impossible, reaffirm or refer to previous transition strategies with which stakeholders are familiar.

It’s also important to announce the transition to employees, simultaneous with an external release. If you announce internally and externally at different times, rumors will fly compounding concerns about who is really steering the ship.

I recommend going so far as to have a specific employee communication plan to address key cultural characteristics and how the c-suite transition will affect the organization from a big picture perspective. When your executive is up to it, set up a town hall meeting where employees can be formally introduced to the new face of the company and have their questions answered.

Next week: we dig deeper into how to prep your executive (interim or permanent) for a successful transition.

In the meantime, if your organization is gearing up for an expected or unexpected transition, Audacia Strategies is here for you. Having the right strategy in place will convert your transition into a transformation. Contact us today to set up your consultation session.

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