Initial Public Offerings

Initial Public Offerings is a corporation’s first offer to sell stock to the public with the goal raising capital, to provide liquidity for the existing shareholders, or another reason.

Alternate Between Divergent and Convergent Thinking When Negotiating Deals

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Divergent ThinkingYou have been considering your options, running scenarios, and have come up with what you think is a great idea. But your idea can’t possibly be in another person’s budget or plan. You just came up with it. Both parties usually don’t think of a possible deal or new working relationship at the same time. It’s human nature (and more so these days) for a person to be inclined to say “no” if a deal wasn’t his/her idea. So, the first step in deal negotiation is to help other people open up, get caught up, and not feel rushed. If you push to sell your conclusion, you are very likely to prompt a negative response.

It can help to alternate between divergent and convergent thinking when discussing new working relationships or deals. Once you think you have discovered a good option take a step back and start your discussion with the other party with the premise that there could well be ways that the two of you could work together that would be mutually beneficial. That way, the first discussion is exploratory and expansive (divergent). Together, you generate multiple ideas and approaches.

The operative word here is “together.”

The second time you meet, you can shrink the options down to 3-4 that have merit, which is convergent thinking. Together, you can divide up the “homework” to be done. One of you may research the joint venture option. The other may spell out how money would flow if it should be a strategic alliance instead. Or, one of you might clarify how a partnership might work while the other thinks through how a loan could be executed without a partnership involved.

The operative word here again is “together.”

Deals often fall apart in the early stages because one person was too focused on a single conclusion or only one side is doing due diligence. Deals also fall apart when one participant reveals worries or focuses on possible problems way too early in the process.

If there is consensus on a possible mutually beneficial approach, the third meeting can be dedicated to how to prevent problems, minimize barriers to success, address worries, etc. Aired before concept consensus, those concerns just sound like fretting. Divergent thinking is involved when listing what could go wrong and what might be needed to address issues.

The fourth meeting is the most important in most deals. What will each entity actually commit to doing? Who else will be needed in order for the concept to pay off? What is the best timeframe? What ROI is reasonable for both? Is there a fallback or contingency plan?

In my opinion, lawyers should not be involved in deal discussions until the fifth meeting. Their role is adversarial by definition and certainly feels divergent. Business leaders need to know what they want and be centered, so they can provide clear directions to the attorneys. Life is good when attorneys are asked to explore a concept’s viability versus identifying all the ways it may not work.

The sixth meeting is sometimes referred to as the “champagne meeting”. Together, agreements are signed. The launch is rehearsed. Key people who will make the concept pay off are present.

Again, the operative word is “together.”

[video] Pick Up Speed

Pick Up Speed

Does this sound familiar?

The tedious process of major prospects makes your sales people sound like they are waiting for several decisions.

The production department(s) express agitation about waiting so long for the accounting department to distribute financial reports. They want to know how much gross profit they generate and if the numbers suggest they have to hire, make do, or lay off anyone.

And the marketing department can’t tell if they can start working on their new campaigns.

It’s not a good sign when your department heads are waiting and looking for data.

Yes, you need timely financial reports about how last month, last quarter, and last year turned out.  But creating better results for next month, next quarter and this year is more important.

Putting department heads together once/month to compare projections for the next month, the next three months, the next twelve months pays off. What revenue can they count on for each period? What is the best educated guess about additional revenue that can reasonably be expected? What direct costs (COS) can already be projected? Which capacity utilization and billing multipliers apply to improve the short term future?

Accountable department heads do not just coordinate, react, and allocate resources on a day to day basis. They learn the metrics and create next month’s success, next quarter’s improved results, and next year’s growth.

Are your department leaders putting their heads together to compare projections and make decisions to get ahead of day to day implementation and create success?

This is especially important if/when your company is going after larger more complex clients. A client going through a merger or IPO will bring even more bureaucracy and delay. To prepare for larger accounts, it’s essential to pick up speed and get ahead of your own day to day process. 

Is your sales manager looking for ways to leverage and replicate the lessons learned from major proposals?  Is the marketing department finding ways to multi-purpose the contents of published articles, speeches, webinars, etc? Is the production department creating standards and delegating tasks down as far as possible?  Does your accounting department need to move beyond just reporting the past results to become a resource to the other departments?

 

[video] Look to the CFO and CMO to Eliminate Worries About Growth Financing

Various Roles for the CFO During Real Strategic Planning (Part Two)

Having helped over 800 clients do real strategic planning, I have had the privilege to work with lots of fabulous CFOs who are a competitive advantage for their companies.  These CFOs are open-minded, constructive, and instructive.   

Because strategic planning should be tailored for each unique company, the role of the CFO changes too.

It’s a joy to do strategic planning with companies that benefit from open minded CFOs. Instead of jumping to conclusions and shutting down discussion, effective CFOs help executives consider expanded options.  The CFO can also ask if they should consider approaches like acquisitions, private investors, an IPO, or franchising to lift off a stubborn plateau, compete more effectively, penetrate a new market, develop exciting products, or pick up speed.  Feasibility analysis and determining optimum pacing for those strategies comes soon enough.

Recently, we helped a client retain the services of an interim CFO. This client was experiencing several behavioral symptoms (blaming, silos, passive aggressive communication, and avoidance) that would sabotage successful implementation of any strategic plan. At the time, we were utilizing our Synthesis ™approach to strategic planning that features a teambuilding process running parallel to the strategic planning sessions. The Controller of this family owned business was an in law who contributed to the continuation of dysfunctional behavior.  They benefited from the Interim CFO’s objective questions, capacity to imagine success, and expansive thinking.  I wasn’t the only person who could envision growth and emphasize leveraging their strengths.

It’s not surprising that the majority of INC 500 companies have CFOs who are optimizers.  They think of ways to find more money, know how to squeeze cash flow, understand currency rates, and have established strong relationships with external resources.  I’ve noticed that the CEOs of highly successful midsized companies, who are guests on my syndicated weekly peer to peer talk show, frequently brag about their visionary CFOs. (Visit www.GrowthStrategistShow.com to access the archive of 300+ interviews.)

Recently, a client needed our Catalytic™ approach to strategic planning which includes a problem solving process that runs parallel to strategic planning.  They had tolerated the chronic recurring problem of generating inadequate gross profit from their primary service way too long.  The CFO played a key role in the success of both the problem solving and the strategic planning.  She dove in and captured the necessary data, provided reports to help the account managers and department head, and participated in executive level decision making.  Compiling financial data, creating reports, and participating in decisions are central to the CFO role, but you would be mistaken if you assume that all CFOs would have risen to the occasion as well as she did.

There has been great progress, but unfortunately…fabulous, optimizing, open minded CFOs are still not the norm. Too often, CFOs play the role of “naysayer” during strategic planning.  The Marketing VP starts to talk about new products or expanded markets and the CFO is the first person to say why the company shouldn’t even consider expansion.  The CIO shares the observation that the company will need to “go to the cloud” to serve clients better and/or reduce downtime and the wet blanket CFO asks about cost too soon.  The Sales VP shares information about how/why competitors are landing larger accounts and the grouchy CFO complains about the current high cost of account acquisition.  Or the negative CFO becomes condescending when the HR Director suggests that the company may need more career advancement opportunities or increase compensation formulas.  The lingering period of uncertainty that has followed the 2008 recession doesn’t help.

Usually such pessimism develops in CFOs when:

  • they are really Controllers and not trained to think strategically,
  • their informed advice is discounted too often,
  • they are overburdened with too much day to day accounting so their minds are preoccupied with details and reports, or
  • the CEO/CFO relationships push the CFOs into the negative role.

A company clearly increases its growth potential when the CFO addresses the causes of any negativity before the next round of real strategic planning should start.  Having a bright, open minded, optimizing, instructive, constructive CFO is a competitive advantage for any company.          

Aldonna R. Ambler, CMC, CSP has earned the right to be called THE GROWTH STRATEGIST®. She has won over 2 dozen national and statewide “entrepreneur of the year” awards for the resilient growth of her international businesses across 4 recessions.  Her midsized BtoB clients get on…and then stay on…the published lists of the fastest growing privately held companies. She owns and operates a suite of companies that help privately held midsized companies achieving accelerated growth with sustained profitability® through opportunity & resource analysis, 4 approaches to strategic planning, executive advisory services, growth financing, and targeted search.  2012 is Ambler’s 8th year hosting a weekly peer-to-peer-to-peer syndicated on line talk show that features interviews with CEOs/Presidents of midsized companies (typically between $20 and 200 Mil/yr) sharing success tips about the growth strategy-of-the-week. An archive of over 300 interviews is available at www.GrowthStrategistShow.com. She can be reached toll free at 1-888-Aldonna or at Aldonna@AMBLER.com.    

Are You Held Hostage by Your Beliefs about Initial Public Offerings?

As the President of a midsized privately held company, you have undoubtedly been reluctant to even consider executing an IPO.  Yes.  The infusion of capital that results from a public offering is very compelling.  But then you back off whenever you even think about all of the distraction/disruption plus the legal and accounting fees.  Your business had better be very resilient and highly profitable to withstand the IPO process.  And then there are all of those ugly stories you have heard about the amount of time that corporate CEOs must spend on investor relations, the tricky board meetings, and the onerous Sarbanes Oxley compliance process.  Like so many other leaders of midsized privately held companies, you may have decided that you don’t want to trade your independence for any amount of money.

It might be time to revisit your beliefs about IPOs.  We are seeing continued growth of an increasing number of privately held companies STALLED by indecision among the private investors and a lack of growth financing.  Are you so sure that you are actually free from investor relations and tricky board meetings now?

Consider what we see in our clients that are family owned or family dominated midsized business. Those business leaders had been spending as much as half of their time on succession, generational differences and unclear strategic direction.  Clear distinctions between professional management and owner board members would be a welcome relief for them.

Consider what we see in our midsized clients that received money from private investors.  Many of them have their hands tied when a former “silent” partner suddenly isn’t so silent…or they want to see dramatic return on their investment at a time when the President is proposing the acquisition of a complementary business through an equity swap.  Sometimes the noise and distraction from inexperienced investors of midsized companies is louder and more costly than from shareholders of publicly traded corporations.

Consider how much more your company could do if it had sufficient capital. Consider how different your life would be if your retirement was fully funded by an exit strategy. Consider the executive talent your business could attract if it were publicly traded.  Hmm.  Are you sure an IPO shouldn’t be at least one of your company’s options?

 

Aldonna R. Ambler, CMC, CSP has earned the right to be called THE GROWTH STRATEGIST®. She has won over 2 dozen national and statewide “entrepreneur of the year” awards for the resilient growth of her international businesses across 4 recessions.  Her midsized BtoB clients get on…and then stay on…the published lists of the fastest growing privately held companies. She owns and operates a suite of companies that help privately held midsized companies achieving accelerated growth with sustained profitability® through opportunity & resource analysis, 4 approaches to strategic planning, executive advisory services, growth financing, and targeted search.  2012 is Ambler’s 8th year hosting a weekly peer-to-peer-to-peer syndicated on line talk show that features interviews with CEOs/Presidents of midsized companies (typically between $20 and 200 Mil/yr) sharing success tips about the growth strategy-of-the-week. An archive of over 300 interviews is available at www.GrowthStrategistShow.com. She can be reached toll free at 1-888-Aldonna or at Aldonna@AMBLER.com.

Stop Waiting for Teleseminars – Learn from Your Peers While on the Treadmill

Here’s a suggestion for busy Presidents/CEOs of midsized businesses (especially $20 – $200 Mil/yr) who

  • feel that your time is STILL your scarcest resource
  • recognize the need to feed your mind, learn, stretch, grow
  • find relevant teleseminars but then can’t participate because they run at the same time you are involved in important meetings
  • know you need to exercise but are going to the gym less often
  • have been tempted to attend an Inc. Conference on Growth…

Why not download free online radio shows onto your iPod to take to the gym? Take shows featuring interviews with your peers on the Inc. 500 list of the fastest growing privately held companies who are sharing success tips about the growth strategy-of-the-week. 

Most of you, the readers of my blog and Twitter tweets, know that I have been hosting a peer-to-peer-to-peer online radio show The Growth Strategist™ for 5 years now. We rotate through various geographic locations, industries, and growth strategies.  One week, my show might feature an interview with the President of a Singapore-based retail company that has grown through franchising. The next show may be with the CEO of a Kansas City-based manufacturer sharing success tips about how they’ve grown through acquisitions.

Many of the guests on my show are on the Inc. 500 (or at least the Inc. 5000) list of the fastest growing privately held companies. They are bright, ambitious, somewhat intense, fabulous leaders….just like you. The show is #2 in its category and attracts over 180,000 listeners.

I have LOVED hosting the show.  How can the discussion of growth strategies between people who actually live the journey EVER be boring?!

I open each show with some tips on the growth strategy-of-the-week gleaned from my 30+ years of experience as a growth strategist helping midsized companies earn and keep their spot on the Inc. 500 while increasing their profitability. Many of you know that I have also won over two dozen national and statewide “entrepreneur of the year” awards for the resilient growth across 3 recessions of my own midsized businesses. So I share examples from my own journey as well.

It’s been 5 years so my website, www.TheGrowthStrategist.com, and the station’s website (www.business.voiceamerica.com) now have over 200 downloadable shows (podcasts if you prefer) available for you to download onto your mp3 players and take to the gym.  Our research shows that most listeners do that or they listen to the show between 11:00 pm and 1:00 am as they do their last round of email “after the spouse and the kids have gone to sleep for the night”. The only reason you would break from an important meeting to listen to the live broadcasts each Tuesday at 11:00 am EST would be if you wanted to ask a question.  Most listeners send emails with questions to me and my guests following the shows. It’s NOT like traditional radio broadcasts where listening at the exact time of the live broadcast represents your only opportunity.

Why wait for teleseminars when you can download 5, 6, …sometimes as many as 10… timely peer level radio shows focused on a growth strategy you are using or have been considering, including

  • specialization
  • diversification
  • acquisitions and mergers
  • franchising and licensing
  • new products/new markets
  • joint ventures and strategic alliances
  • equity deals and IPOs
  • several others….

I did a series of shows earlier this year about ‘HOW TO CHANGE YOUR BUSINESS MODEL” and another on “THE CHANGING IMPACT OF REAL ESTATE ON STRATEGIC GROWTH DECISIONS”.

You can suggest topics, offer to be a guest, or recommend someone else you think might be an interesting guest.  The toll free number is 1-888-Aldonna and the email is Aldonna@AMBLER.com.

Growth Strategy Tip

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Achievement Systems, Inc.

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