“The best brands never start out with the intent of building a great brand. They focus on building a great – and profitable – product or service and an organization that can sustain it.” – Scott Bedburry, branding consultant and CEO of Brandstream
If you detect a true opportunity, the key to success is not in buying the company but rather in creating value in addition to the purchase price. To see if that is possible, you should work on a plan that explains why it is an opportunity, what you are going to do, and how you are going to do it.
The strategic plan in the purchase of a company
The strategic plan consists of determining the competitive position that you want to obtain: how the company will go from where it is now to where you want to take it, what mission and vision you have for it, and what you will communicate to your team.
This has to do with the competitive strategy, the alignment of all of the organization with a common and clear focus that will allow you to differentiate yourself from your competitors and create value. The focus, a principle motive, as Jim Collins says in “Built to Last,” is the fundamental reason why your company exists. Apart from making money, it is the only thing that should not change in your company.
The more robust your strategy is, the easier it will be for all to achieve their goals; they will all be aligned in the same path. Keep in mind that strategic misalignments are what kill the efficiency of organizations. The result of this alignment is coherency; lost resources are the result of misalignments.
Your task as a leader will be to define this vision, making it tangible, memorable, and inspiring. To have a good strategic plan, you should deeply understand the competitive environment of the company, make the right assumptions, and design mechanisms that coordinate the key processes in the organization so that they function in an aligned matter toward a common goal.
Apart from this clear and focused strategic plan, you will redefine the products and services, marketing, operations, commercial model, type of professionals that it needs, compensation systems, and technological developments. When you align everything, you will achieve success, and the company will run like a machine.
Strategy and leadership
The vision should not impose but rather inspire. Your team should internalize it; if they do not buy into it, forget about having success as a company. In order to do this, leadership is crucial, since leading is helping others understand the strategy.
Team members love to have a leader with a clear strategic vision, although it is true that once you explain it to them, you should be absolutely coherent. The bigger the difference between what you say and what you do, the more disheartened your team will be. Each action that you take will have massive implications in your team’s morale, for good or bad. Your actions speak louder than words.
If you are ambiguous with the strategy, send mixed messages, or act inconsistently, this will always be interpreted negatively by your people. Therefore, be as clear as possible. A way to achieve this is by saying “no” to all opportunities that are not aligned with your strategy.
If you want to be successful, try to have everyone on board with the new project, rely on them, explain it to them, consult them, and listen to them. Strategic alignments are not achieved in the company leadership but rather in the face-to-face interactions with the employees. Be aware that there is always a tendency for people to feel left out. Fight against it.
If you want your company to grow much faster than its competitors, you will need more than a differentiation factor; you will need a radical differentiation factor, meaning that you find a new space in the market that you can possess and defend.
This article was written by Enrique Quemada, Chairman of ONEtoONE Corporate Finance Group.
If you are interested in learning more about buying a business, take a look at THE 10 MOST COMMON OBSTACLES WHEN BUYING A COMPANY.