How to Steer Your Company from Lifestyle to Growth-Centered
One of the wisest things a business owner can do is decide, early on, if the company will be lifestyle-minded or growth-focused.
Lifestyle companies operate to support the owner’s way of life, and they are typically focused on short-term profitability. This type of business is also self-funded, offers a bit more freedom than a growth-minded company, and has no obligation to shareholders.
Growth companies, on the other hand, strategically operate with an eye toward the future. Long-term growth, global impact and aggressive risk-taking are all hallmarks of this type of business. Some growth companies may even position themselves to be bought out by another company.
For lifestyle business owners, there may come a time when the growth-minded model becomes more attractive. However, that’s not something that can be changed on a whim. It takes a collaborative effort and a hardcore strategy to turn the entire ship around from a lifestyle-minded company to one that is more growth-focused. Here’s the best way to make that happen:
Build Your Team
As CEO, recruit a group of mentors outside of the business who will make up the board of advisors. Choose people who can help get the company where it needs to be. These board members should have already accomplished what you’re trying to do. Your executive team should meet regularly — preferably once a month — to discuss where you’ve been, where you are, and where you’re going.
Ditch the ‘Yes’ Men
In the lifestyle business model, everyone typically serves the CEO, rather than the company itself. For the growth model to work, it’s vital to align yourself with people who strongly believe in — and who will enforce — accountability. That means no more “yes” men and women. Instead, lean on people who come with a strategy and whose Number One priority is the company and its long-term growth.
Get Your Money Straight
Develop a fair and equitable compensation plan for the CEO. This means the CEO will become an employee with a paycheck, not someone who uses the company as an ATM. In the long-term, this type of plan can help grow your wealth as a business owner. Plus it cements the entrepreneur’s reputation as someone who puts the company’s needs first.
Offer Employees Equity in the Company
As a business owner, make a conscious effort to distribute equity in the company to key people, so that they have a vested interest in the success of the company — rather than the CEO. At the end of the year, issue those employees a dividend or distribution check that confirms their equity in the company. It’s one of the best ways to boost morale and loyalty among employees. And, ultimately, you will attract more high-caliber talent, because they are typically drawn to companies that have a solid plan mapped out.
CEOs, Take Stock of Your Ego
Sometimes there will be uncomfortable conversations that the owner may not love, so egos have to be checked at the door. From the top down, everyone must get behind the new business model and reinforce that it is best for the company. Remember: It’s not personal — it’s business.
Jeff Chaponick is CEO of MAC Diversity Recruiters, an international search firm that partners with companies of all sizes, including companies such as Deloitte, Nike, and Marsh & McLennan, to help them reach their diversity talent goals. Jeff is on the Board of Directors for the Texas Diversity Council and the National Diversity Council. He is also a member of various professional organizations that help address the disparities in hiring among traditionally underrepresented groups.