Let’s take a look at what’s going on with your team. We often recognize our top performers as key people in our company, but what about those less-sung heroes? Maybe they’re not our proud and slightly boastful sales stuff, but they certainly make our business run more smoothly and profitably.
They help you increase your valuation, so you had better be giving some considered thought to where they fit in when the integration is done.
How Your Key People Help Your Valuation
People make our businesses run and run well. Without our staff, we’d be nothing — and if we’re wise, we know it. While you may be capitalizing on all your talent now from your accountant to your middle management, are you certain the person you’re considering selling your company to understands each person’s value? Do they see how your cogs all fit together?
We’re always looking for ways to improve our valuation. Safeguarding our team can not only help us increase our valuations by showing potential acquirers our employees’ worth, it can also help us ensure our employees will be taken care of when we’re no longer running the show.
Whether you know your entire staff intimately or not, take note: Your key players should be part of your thought process when you start evaluating your company for sale. You can de-risk the transfer of your business by showing you have the right people performing the right jobs so your potential buyer knows there will be no added hiring and training costs. If you’re concerned your team will be let go during a merger, now’s the time to showcase why these key players should be kept on and in this capacity.
Clearly, your first step is identifying who’s who on your team.
How to Identify Quiet Leaders
Our less-sung heroes are our quiet leaders. They’re the ones doing minor (and major) course corrections every day to keep things running smoothly. If you sit back and do an overview of your business, who do you find indispensable? Who on your team is vital to the function they perform?
We’ve talked about this before in terms of key man insurance. This is not an exercise in looking at your sales staff and revenue drivers — those people have likely already been singled out by the buyer. No, we’re talking about your front line personnel who daily take on the struggles and challenges of the business.
Your middle management team, for example, is often overlooked. They don’t really drive your revenue directly, but they sure do know how to make sure your sales people perform. They’re holding people accountable who do directly impact your bottom line. On top of that, their myriad administrative duties are executed without error and they know the quirks of the company. They likely have good relationships with several of your clients and/or suppliers.
If you take a look at those people who have thoroughly immersed themselves in your company to the point where they’re an organic part of it, what roles are they performing?
Now that you know who your most valuable employees are, how are you looking after them when you transition your business? The second our staff hears we’re selling the company (because no matter what ‘merger’ means to us, that’s what it means to them), they’re going to panic. You’re going to have an entire contingent wondering if they even have a job and, if so, for how long.
It’s true that layoffs happen in M&A situations. It’s true that not everyone is vital to the process or is simply underqualified when compared to someone in the same position at the other company. And it’s also equally true that if you don’t have a plan for what happens to your staff during this transitional phase, you’re likely to lose some of your best people.
You’ll have to make some concessions. Some staff will stay, some will have to go. It’s your job to take a look at your key people, including those quiet leaders, and make sure you’ve addressed their importance to your company’s operations. You’ll give them the best chance they have to continue in the most familiar way possible and protect your legacy as an excellent employer at the same time.
When you finalize the sale of your company, the first 90 days are critical for integrating the two entities — right on down to your front line staff. You’ll have to address issues, starting on day one, that include interpersonal dynamics (a.k.a. office politics or drama as so-and-so is being mean/unaccommodating/inept), retooling and retraining (and this last includes overcoming previous industry bias where sales people may now be required to promote a product they previously derided, for example), and handling client and customer concerns about level of service.
There will be bumps and bruises along the way; just consider them growing pains. However, it’s important that you’ve considered these factors before you sign the paperwork because integration is where your business will suffer if you haven’t. Not only that, but it’s your baby — why would you let it go without preparing it the best you possibly can to enter this brave new world?
So looking at your company as it stands right now, how would you do during integration? Would you lose people crucial to your operations? Can you prevent it?