For time and the world do not stand still. Change is the law of life and those who look only to the past and the present are certain to miss the future.
A risk is a chance you take; if it fails you can recover. A gamble is a chance taken; if it fails, recovery is impossible.
Nothing is more difficult, and therefore more precious, than to be able to decide.
There is no-one who cannot vastly improve their leadership through study.
I would define leadership as the projection of personality. It is that combination of persuasion, compulsion and example that makes other people do what you want them to do.
Leadership is the art of achieving more than the science of management says is possible.
We should be doing something even better than you could do for yourself. Otherwise, why hire an advisor?
Think to the Finish
The Five Ninths Panel
Contributors to our articles are:
David, a retired Royal Marines Major General, with extensive practical experience of leading national and multi-national teams and organisations - military and civilian - on politically sensitive and high profile operations and assignments worldwide.
Richard has advised on policy at the highest level of government and currently advises a major, multi-national, innovative business on a wide range of issues
Edward was a senior partner in a major global advisory practice and his experience delivers convincing, knowledgeable and relevant opinion
Aligning Structure To Success
To address why this is relevant, the starting point is to analyse what makes a business valuable. For the most part, this has little to do with the physical assets that the business possesses, rather it is its ability to earn profits year on year.
Whether you are seeking to sell the business, raise additional funds for expansion or simply to maximise shareholder value, the resilience of earning streams forms the basis of value. It is, in essence, goodwill, which is defined as the value of the business over and above the tangible net assets.
Why is This Important?
Having established that the earnings stream is critical, it is then important to understand the critical factors that support the earnings stream. In many businesses, those are people factors. It might be a key technical innovation that is in the hands of an individual, a key customer or supplier relationships. If they are mission critical for earnings, they impact on business value.
Retention of key personnel is generally critical to sustaining value. Even if the individual is perfectly happy and would not wish to leave, that may not be the case if there is a new investor or a new owner if you sell. You may not wish to take the chance of that being tested by a more progressive competitor.
What Can You Do?
Consider structures that will enhance retention, ideally aligning the objectives of your key staff to your own objectives. If they contribute to value, the chances are that they will see great value in participating in the growth in value of the business. Investors and purchasers consistently rate businesses at much higher values when the key individuals generating earnings are aligned to an appropriate shareholding. A mixture of bonus and share option is commonplace, perhaps with a twist, such as shares that participate in future growth only so that the current shareholders give nothing away. The recipients are therefore incentivised to grow shareholder value and do so in a highly tax efficient manner.