In the GrowSmart program when we discuss “exit strategy”, I like to ask the group the following question:
Imagine you knew for a fact that your business was going to go away in six months. Disappear. Cease to exist. Gone. What would be different in the management of the firm over the next six months?
After the initial reaction of shock and disbelieve, I start to get some pretty interesting responses:
“I would start managing more cash very tightly.”
“I would get rid of excess inventory and work really hard to collect my past due receivables.”
“I would let go of all of my low performing employees and terrorists. Why put up with that for six more months?”
“Raise prices. Why not?
“Part ways with several difficult or unprofitable customers.”
What do you notice about these responses? Any sound crazy? Far-fetched? Unreasonable?
No. Of course not. In fact, they sound very reasonable. Great management strategies for any company big or small.
What prevents these same business owners from executing these strategies on their own without my help? It’s the absence of an exit strategy. All I did in my question was paint a picture of the end of their business. A rather sudden end but indeed an end.
As a result of this six month exit, all of a sudden there is clarity on the business unlike there has not been before. The proof of this lies in the resulting actionable strategies. Just by inserting an exit in front of the business owner, there is a much better operating business. Otherwise, in the absence of a well-defined exit, these important decisions, and others, get put off. Set aside. Delayed. No sense of urgency.
A compelling exit strategy creates a sense of urgency that results in a better more profitable business.
Steven Covey in his best-selling book, “Seven Habits of Highly Effective People”, suggests the following “Habit”: Begin with the end in end.
What’s your exit strategy? Would your business benefit from a higher sense of clarity in terms of your exit or even your final destination? My guess is it would. Otherwise, you are at risk of your business disappearing.
BOOK OF THE MONTH
Give and Take, by Adam Grant
There is a lot of research on what determines success. Thousands of books have been written on the topic. I have reviewed a number of them here over the past decade. The determinants of success are as predictable as an “Atlanta ice storm” 🙂
Author Adam Grant in his best-selling book, “Give and Take” provides the reader with a fresh perspective on success. He suggests that our success is largely determined by how we interact with others whether it’s networking, negotiating, selling, or leading.
Adam Grant is an award-winning researcher and the highest-rated professor at the Wharton Business School. Based on his research, he has determined that most people act as either givers, takers, or matchers in their professional interactions. Givers contribute to others without expecting anything back. Takers strive to get as much from others as possible. Matchers will aim to trade evenly. Think “quid pro quo”. They will always want something in return.
Which one are you?
Grant suggests that your interaction style will have a profound impact on your success both professionally and personally. The author also explains that while our success can be driven by our willingness to give, it’s not a guarantee of success. Many givers find themselves being taken advantage of or getting burnt out. Examples that come to mind include teachers and non-profit volunteers. The book provides an interesting prescription for avoiding both unfortunate fates while still being a big giver.
Grant provides evidence in the book that in almost any line of work, the most successful and the least successful people are givers. The takers and matchers fill the middle. The key is how you manage your giving and staying away from takers.
How can you detect a taker? Grant gives the reader several suggestions:
- Takers tend to be more self-absorbed. They’re more likely to use 1st person singular pronouns like “I, me, and my” when speaking versus using first person plural pronouns such as “we, us, and ours”.
- Another indicator of a taker is their compensation. The taker CEO tends to earn far more than their key executives because they see themselves as being superior.
- For the taker CEO it is also all about “me”. Portraits of themselves are on the walls, front page articles in the newspaper, maybe even their own reality show.
The book also includes a number of great quotes. One of my favorites comes from Samuel Johnson, “The true measure of a man is how he treats someone who can do him absolutely no good”.
I enjoyed reading this book. It provided me with an effective framework for measuring my own effectiveness in interpersonal interactions and those I work with as well.
USEFUL WEB TOOLS
How-to Guides for Small Businesses
http://guides.wsj.com/small-business/
The Wall Street Journal has how-to guides for small businesses. These free online guides provide tips from reporters and columnists on technology, funding, HR, and more.
A LITTLE HUMOR
“I find television very educating. Every time somebody turns on the set, I go into the other room and read a book.” – Groucho Marx