When an owner considers the future – that is, his or her succession, retirement, or financial liquidity event – there is often one of two options:
- Internal succession through the sale or transfer of ownership to the next generation of family, existing management, or the employees, or
- Sale of the business to a third-party strategic or financial buyer.
Regardless of the direction, it’s important for a company to not only maintain but also increase its value to stay competitive. Equally important is to ensure the right people are leading the charge to prepare management for ownership.
While PMs are often viewed as future owners who need to be developed, a CFO should be seen as the bridge between operations and finance. As a financial participant who understands internal processes, a CFO can help develop the right people as well as knowledge of sales, growth, and revenue. A CFO has a unique view of operations that helps identify the people who are thriving within various departments as well as the business as a whole.
Build Value
Grow Talent
An effective way to build value in any organization – especially one that’s privately held – is to attract, develop, and retain talent by engaging and motivating them. In a time when being progressive is often the key to retaining talent, contractors will need to find nontraditional ways to stay competitive and attractive to younger workers, in addition to bringing disenfranchised workers back to the industry.
Bridge the Gap
All too often, companies neglect to focus on people or succession as they relate to workforce demographics. If a company’s management team has an average age of 65, then that team may have a difficult time making a cultural connection with its Millennial workforce. All the while, that younger, very qualified workforce wants a transparent, collaborative, free-flowing environment; if that environment doesn’t exist, then it creates doubt about whether there’s opportunity for a younger leader to move forward. The gap between that up-and-coming leader and management is simply too big.