Your Business, Your Life…

What is the Ultimate Owner Experience (OX)?

How far in advance of a major transition, like an M&A transaction or family generational succession, should business owners begin to plan? Two years out would be great. Starting on day one of the company’s existence is even better! Unfortunately, though, very few owners/founders allocate the necessary time, financial resources, and energy to planning for these types of transitions, i.e., to what are commonly referred to as exit strategies.

In the interest of prudent resource allocation, here are the criteria to use in making a decision about whether to read this article. If you are an owner whose only measures of the success of your business and career are earnings growth and the purchase price when you sell the business (and those are very legitimate and important goals), please stop here. This article isn’t for you.

So, if you are still reading (and I hope you are), this article is an introduction to ultimate concepts and practices that center on legacy, responsibility, and cultural values — those aspects of your business that live outside the world of dashboard metrics — that I broadly refer to as the ultimate Ownership Experience (OX).

Defining and Creating Your Own Ultimate OX Experience

Let’s imagine someone who jumps into an Uber while in Washington, DC, and she asks to go to the Federal Building. The driver speeds off to the complex around the Capitol Building, because he knows the way to that landmark, and politely drops off his passenger. Yet, once on the sidewalk, the passenger realizes that while she is in the right general area, she hasn’t been specific enough in the destination, and this place isn’t the right one. This everyday example represents a business owner who arrives at the closing of an M&A transaction, and then realizes that long-time employees with a great deal of institutional knowledge aren’t going to be hired by the new owner, the family’s company sponsorships are over, or, months later, there aren’t going to be any earnout payments because key customers have left.

Despite the fact that billions of dollars and hours are spent on succession, as well as M&A transactions every year, there is no guarantee of a successful transition, which is due in part to a laser focus solely on the purchase price. While most entrepreneurs are confident and optimistic by nature, the Alliance of Merger and Acquisition Advisors notes that “only a third of them [companies that are placed on the market] ultimately sell at the value, and on the terms, that they expected at the outset.”1 As an entrepreneur and owner/founder, I’ve had the ultimate OX, and I want to help you or your clients dramatically increase the odds of success.

Every business owner wants to succeed, right? Sales and EBITDA growth, additions to headcount, and working capital investment — all of these can be measured and used as snapshots of success. But, how can owners measure their clarity of purpose and mission, organizational values, community involvement, and overall well-being, which are important throughout the lifecycle of a business?

One way to think about this in the OX framework is to imagine a building construction project — the successful organization has to have a strong, solid foundation that includes values, priorities, goals, purpose, and strengths, with measurables serving as the mortar to hold the building blocks together. A growth mindset, self-awareness, and the intentional cultivation of a sense of readiness can serve as the scaffolding, ladders, and safety net. Each element is important in completing the successful construction of a business that is financially successful, and in creating the ultimate OX. This is what my mission is centered on, and what I am passionate about!

As the next section of this article demonstrates, the ultimate OX incorporates contingencies, priorities, and values to move well above and beyond a 25% success rate, in parallel with maximizing the purchase price.

Summary of Key OX Concepts and Practices

Where Do We Go From Here?

Let’s work together to begin an OX Evolution! Let’s work to support business owners in setting up transitions to succeed. In upcoming articles, I will dig deeper in to launching an OX Evolution process, so I’d love to know that you think!

(1)Alliance of Merger & Acquisition Advisors (2017, June 9). Value-growth. Retrieved from http://www.amaaonline.com/value-growth/