Help clients boost enterprise value by building collaborative decision-making

By Rich Greene, CEO – Director, Clarus Advisors

How a company interacts internally to overcome obstacles is a key to building and expanding the enterprise value of the organization. Is there an inclusive process to review, anticipate and plan for changes and disruptions in the business and marketplace? Or a process to evaluate results? Is the process defined and routine, or ad hoc? Or does the sole thinking and decision process belong to the owner? Creating a collaborative advisory council within an organization is critical to ongoing success and to building the long-term enterprise value of the company. This is true in all businesses, but it is especially critical in smaller privately held companies where there are a limited number of team members and where the owner is often the primary driver of any decision-making process. In fact, when the business owner is integral to the day-to-day operations of the company, the value of the company is eroded. In these cases, the business owner is in the position of owning a job versus owning a business that creates value beyond immediate cash flows.

Four keys to developing a consistent, collaborative decision-making process within a company are:

1. Develop an advisory team(s)

Ideally the company will have at least two advisory teams. An external council, which includes the owners’ key advisors, attorney, accountant, banker, and external consultant(s), would focus on ensuring the strategic vision of the company stays on track and the owner stays accountable to those objectives. An internal council would include at least one member from each operating unit: accounting, sales, operations, customer service, etc. The objective is to critically review business processes, ensuring the voice of the customer is met in an effective and efficient manner.

2. Define the Roles, Responsibilities and Accountabilities

All advisory team members must have clearly defined roles, responsibilities and accountabilities, and have the power to act and make improvements. This step will serve to develop the team and bring ownership to processes, and it will benefit the customer and enhance the bottom line.

3. Commit to the Process

Meetings must be held consistently with clear and meaty agendas, with reporting tools that track progress against objectives. Communicate the groups’ findings and results to the entire organization. Solicit their feedback and publicly embrace the process.

4. Reward Critical thinking and open, honest dialogue

Finally, reward critical thinking. Allow a free and open exchange of ideas. Force the discipline of data-driven decisions. Remember: Don’t shoot the messengers! The most knowledgeable people on your team are in the trenches. Encourage their input and act to make them a bigger part of the process. 

The best run companies have a 360-degree feedback loop and action teams that can anticipate issues before they become crises. An effective collaborative decision-making process allows companies to better anticipate customer needs, makes for more productive employees and frees the owner to focus on the bigger picture. Work with your clients to develop a critical thinking process that extends beyond the owner(s). It will strengthen the overall management team, increase margins and increase the enterprise value of the organization you are assisting.

About the Author: Rich Greene is CEO/Director at Clarus Advisors, LLC., a consulting firm focused on building enterprise value and guiding companies through rapid and transformational change.

Additional Resources 

Book: Building Value: The 5 Keys for Achieving Success

Webinar: Teaching your clients to treat their business like an investment

Practice Aid: 8 Fundamentals for Increasing the Value of Your Client’s Business

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