When: April 18 -22, 2017
I was recently exposed to an interesting study called Roads to Resilience, which is a 2014 report by the UK’s Cranfield School of Management on behalf of the UK insurance and risk consultancy, Airmic. The basic thesis is that opportunity is the upside of risk, and that seizing risk-driven opportunities requires a decisive and rapid response, which in turn requires empowered teams, practiced processes and flexible resources.
As an owner of a privately held business, you have significant personal wealth already invested in your company. When reviewing the annual returns your business delivers, it’s easy to calculate returns based on the book value of the company. For example, book value of $4 million and pre-tax earnings of $1 million generates an attractive 25% return. However, you certainly wouldn’t sell your company for book value, so the returns on the “investment” you have in your private business should be based on market value. (Market value of $20 million with the same $1 million of earnings generates a less impressive 5% return.)
Moving forward and adapting in a rapidly-changing and challenging business climate-doing “what you need to do!”
Businesses and CEOs require tested, reliable input from outside sources to remain at the top of their game. The best performing businesses receive spot-on advice from trusted sources in the form of boards. Creating the right blend of experience and personalities on a board is not easy because boards come in a variety of packages.
Often business owners who are interested in bringing liquidity to their holdings seek only a sale to disinterested third parties. And that frequently works out just fine for both the buyer and seller. But sometimes the personal emotional strings attached to the business, whether on the surface or not, are simply too strong to break the ties and turn control over to “the new guys on the block.”
Achieving success in the global marketplace requires real-world experience with the challenges of working in foreign markets. Specialized knowledge is essential to ensuring liquidity, navigating the local trading markets, and managing social, political and economic risk.
“I have views on most matters, and I am as willing as a politician to change most of them.” -James Agate
Most business owners know when they are in trouble, but often do not take action early enough. Many factors can contribute to ‘distress creep’ for businesses. The legislative pressure brought to bear on some businesses by the Sarbanes-Oxley act and – of being pushed – or dragged – into the world economy, are just a couple.