Inflection point in a business? You need a strategy.

For 20 years, I worked as a CFO for Berkshire Hathaway. During that time, I integrated more than a dozen acquisitions – all within 90 days.

But I’m not your typical CFO.

I’ve sat in the seat leading Manufacturing, Supply Chain, Operations, IT, HR, Customer Service, Marketing and Sales. And, through that experience I found my passion – getting teams to work together to achieve more than they could imagine.

If there’s one thing I know to be true about teams it’s this – they all want to win.

Every team likes to win.

As I discussed in my first article about having a playbook for the first 100 days after an inflection point, how transitions and transactions are handled determines their success trajectory.

Whether you’re integrating an acquisition, preparing for a sale, or looking to accelerate growth, a defined path is needed.

It starts with strategy.

Success is often determined by what you get done during the first 100 days of an inflection point. More specifically, the degree of success you achieve is directly related to your ability to focus and align on four fundamentals:

1.???Strategy

2.???People

3.???Cash/Capital Management

4.???Infrastructure to Scale

So many initiatives are focused on one of those four areas, but if leaders don’t address all four, they are going to have a difficult time aligning the entire business and all the stakeholders, and the 100-day plan will be in peril.

The subtlety that’s often hard to see is the need for strategy to precede the other three fundamentals, which are resources leaders align with strategy. When that order is followed, resources are deployed toward an agreed upon outcome.

That outcome might be accelerating growth, integrating an acquisition, or selling a business, but leaders have only three areas of resources to bring to bear on those outcomes. These are the toolset required to successfully execute strategy.

What I’ve learned during my time as a CFO at Berkshire Hathaway and since then in helping leaders achieve their goals, is that teams love to win. When we set up a winnable game through strategy, teams kill it.

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Create clarity through strategy.

Winning strategies have two key elements –a clear destination, and a roadmap to get there.

Clarity leads to confidence, execution, results and growth. If any of the following outcomes have occurred on your watch, it was because of a lack of clarity.

·?????Failure to integrate an acquisition on-time

·?????Failure to meet customer retention goals

·?????Not getting the price you wanted for the sale of a business

·?????Spending twice the budget on an ERP project (or worse, a failed implementation)

·?????Failure to deliver projected returns to your investors or the bank

·?????Inability to find resources to fund growth

When you don’t provide clarity, others will fill in the blanks for you.

Leaders must provide clarity to team members, customers, suppliers, lessors, banks, investors, board members and professional services firms.

Most importantly, teams love clarity.

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Teams thrive with clarity.

If “America runs on Dunkin,” teams run on clarity.

High-performing teams have Trust, Engagement, Accountability and they Make a difference. Clarity fuels their action.

When leaders offer a clear path forward that details who is responsible for what and who has the authority to accomplish defined tasks or make game-time adjustments, what they receive back from their teams is accountability.?

A clear playbook creates accountability and leads to high performance both at the team, and individual level.

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Consider a classic example.

Sometimes failure is the clearest path to success. A classic example of the lack of clarity comes in the need for a company to complete a digital transformation. One of the early steps in such an undertaking is an ERP selection and implementation.

Leaders often start too quickly. So fast in fact, that they forget to engage the team. No playbook is drawn. No clear requirements and responsibilities are defined. The result is a complete waste of $2 million. The project gets scrapped and the business learns nothing from it.

In these cases, technology is often blamed for the failure. But the real culprit is a lack of clarity – a true leadership failure. When undertaking a major initiative, teams must connect the goal to the strategy and be part of developing clarity around the project.

Have a clear destination and a roadmap for getting there.

A clear destination leads to a clear strategy. When you go on a road trip, you don’t get in the car and just start driving. You know where you’re going and, unless you’ve been there before many times, you make sure you have directions.

The same is true when navigating a company through an inflection point. I’ve found the hardest thing for many CEOs to do is clearly define the destination.

If that’s true for you, start at your destination. What’s your End Game? Where do you want to end up?

Be specific.

What outcome are you seeking in three years? Five years?

Walk backwards, year by year, from that outcome and detail what key initiatives that must happen to reach it. At the end of that journey, you’ll have a high level roadmap that you can fill in with a detailed business plan, financial model, resource allocation and metrics. Your team must know how you will keep score and how to define victory.

Some leaders shy away from this because they want to have freedom to pivot.

Having a clear destination and communicating that destination to your team doesn’t prevent you from pivoting. It empowers your teams to be confident, execute well, and deliver results, even as you pivot your path toward success.

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Communicate the destination to the team.

Teams are made up of people, and people prefer to be Trusted, highly Engaged, Accountable and Making a difference. And, they typically care more about making a difference today than three years from now.

Think of how you can incentivize teams to care about business performance right now.

If they are high-performing and delivering significant growth in preparing the business for sale, think about how they can participate in the value creation of the business.

If you want to grow the value of the business by $100 million, what bonus payouts are you tying to it?

If you do not tie incentives to the goals you are trying to achieve, you will get what you ask for – and that may be something else, or nothing; but what it won’t be is the goal you’re trying to achieve.

People are complex in many ways, but in some ways we are very simple. If you tie a bonus to the increased value of the business, you will increase the value of the business.

Build your 100-day playbook within a three, and five-year picture. When you’re done with the first 100 days, set a plan for the next time you will make a 100-day push. Don’t change the destination every two weeks or month. Wait at least 100 days to change direction.

That approach provides room to pivot without throwing your teams off track.

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The bottom line

Taking a company through an inflection point can be one of the most challenging and stressful events in a leader’s career. That said, with a clear strategy, (destination and roadmap) you’re ready to focus on the next fundamental – people.

Equally important is involving one or more strategic advisors with experience helping companies successfully navigate any inflection point.

Let's chat?about how the 100 Day Playbook can help provide clarity for your business.