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Last month I wrote about how selling your business is a bad investment and highlighted alternative strategies to grow your business wealth. This article shows how to set up your business to run itself day-to-day so you can retire in place. Use this five-point program as a checklist:
1. Build the foundation
The first step is to implement a clear mission, vision and values (MVV) for your business. It’s as old as the Bible itself.
Moses’ mission was to bring the Jews safely out of Egypt. The values adhered to were the Ten Commandments and the vision that kept the Jews holding on for 40 years was the dream of reaching the land of milk and honey.
You should develop your MVV together with your people to ensure buy-in. No more decrees handed down from on high.
Once developed, your team must actively use your company’s MVV when giving employee feedback, making strategic moves and considering big decisions such as hiring, firing, etc. Use your MVV as a guide for discussion and agreement. Teach the rank and file how to use the MVV in their everyday decisions, too.
Pro tip: Survey your team periodically for improvements to make sure to keep productivity and morale high.
2. Choose your mountain
Years ago, GE decided it would only compete in markets where the business was No. 1 or No. 2, not dabble in markets where it had no chance to dominate.
You can follow a similar strategy that I call “King of The Mountain.” Pick a client niche, geography and service mix that creates a unique opportunity for your company to build a large market share.
Look for niches that play to the natural strengths of your business and not the competition. This allows you to build a moat around your business and helps your organization focus resources and build a deeper bench.
3. Productize your services
It’s hard to specialize in custom work without keeping your finger on the pulse. Simplify and package your services by limiting options and service configurations.
Lawn care firms sell a fixed program for a fixed fee. You can apply this thinking to everything from installation to irrigation by limiting material choices, installation regimens, design choices and maintenance packages.
4. Use an accountability process
Every great company is accountable to a clear set of systems. They don’t need to be perfect, but they need to be followed by everyone with a clear understanding of roles.
Your team needs an accountability process to keep your systems in use and updated. Some companies use a comprehensive quality management system (like ISO 9000), while others create simple lists and regularly review implementation to ensure everyone is on the same page.
5. Gamify operations
To retire in place, you want your team to win, win often and know the wins. Like a sports team, every position should have clear metrics (see Nos. 1-4) to identify a win each day/week.
I help many clients set up open-book management to encourage buy-in and ownership thinking. It still requires the use of scorecards, so everyone knows what his or her role is in winning the game.
It’s critical to keep the game fun. Make sure the data is believable and timely, the metrics are clear and simple and your team wins more often than it loses.
When done right, these metrics will roll up to the leadership team, integrate with your monthly budgets and allow you to keep your finger on the pulse from afar.
Your challenge
To implement this plan, you need the right leaders in place who buy in to your vision and can implement it.
Next month, I’ll address how to build a super leadership team and identify who will be your first-in-command. Having a second-in-command may not be enough.