Jay Sachetti joined Jeff O’Brien, partner at Husch Blackwell and Dyanne Ross-Hanson, president of Exit Planning Strategies talked about the market for mergers and acquisitions, exit planning opportunities for companies that don’t end up for sale and how companies can maximize their eventual sale price during an early October panel at the first Upsize on Tap event at Summit Brewing Co. in St. Paul.
When the state Legislature passed a law requiring employers to provide paid leave and safe time for employees, Justin Bieganek started hearing differing details from friends, colleagues and peers.
As small-business owners, we make decisions – lots of them, big and small. Often what separates a small-business owner from a big-business manager is the willingness and ability to make good decisions quickly. Rapid decision-making is something that creates value in your business and can land you work with the big operators, who move a little more slowly.
But some of those decisions are really big. They carry extra risk and will make a big impact on you and your small company.
It is time to learn some valuable lessons from your big customers and find out how they make some of those Really Big Decisions.
Who matters?
You start this process by identifying the complete list of who matters. Anyone that is affected by the big decision is included. Anyone who wants to provide guidance, constraints or desired results from this decision must be included. Anyone who benefits from the effects of this decision or suffers from those effects should be included. Make this list very carefully and do it first.
Try thinking of it a few different ways:
Who would be upset if I didn’t make this decision at all?
If I don’t buy that new corporate headquarters, who will be a bit peeved with me?
Who will be ecstatic if the decision goes their way?
Who is waiting nervously to see how I will decide whether to open that new office in Milwaukee?
Who has an answer for me?
Who has already spent some time thinking about switching to a new payroll provider and has some good things I need to know about?
Who will I need help from in getting this done?
Who will be on the hook to do something when I’ve made this decision?
There are lots of different names for the people on this list, but let’s call them the players. Don’t forget, of course, that you are one of the players.
Building this list does not necessarily imply that you must make a consensus decision. You may be seeking consensus, or maybe not. Just make sure you can gather the right information from the right people.
What matters?
Go over the list of players. Imagine what each of them wants or doesn’t want. In order to get this list off the ground, just use your best guess and your gut to assemble a list of the goals.
As you record a goal, estimate its special attributes. Think about the minimum needed to meet the goal, the preferred and the maximum. The minimum is the value that must be reached in order to do this thing at all. The preferred level is what you really want. The maximum is what you’d want if cost were no object. This range is important and you should try to assign it to every goal.
Trying to decide on the purchase of a new building? The minimum square footage is the amount you’d consider to move at all. The preferred square footage might allow room for growth or let you have a bigger office. The maximum probably lets you include extra storage and a garage stall for your Jaguar.
Once you’ve assembled your list of guesses, validate it with the players. Find out what you’ve missed and learn more about the attributes. Perhaps your receiving manager wants more storage and a loading dock. But your facilities manager thinks that all that square footage will require more cleaning and maintenance staff. You’ll find ideas on both sides: Give me more, give me less.
You’ve got the list of players and you’ve assembled their (and your) list of goals. Turn now to options.
What works?
Think about ways to meet these goals. Take a look at the attributes of the goals and think of reaching the minimum but finding ways, if possible, to get close to the maximum. Spend at least some time considering special kinds of options that will keep you honest and help you make rock-solid decisions.
Once you have the list of options, you are set to make the decision based on players, goals and options.
There are many versions of a decision matrix, called by many names. My new favorite comes from Tom Gilb at www.gilb.com, called an Impact Estimation Table. List your goals along the side of a grid in order of importance. Include information about minimum, preferred and maximum attribute values. List your options across the top of the grid, in any order. The intersection of each goal with each option is where you will record your next set of judgments: the contributions.
In each grid box, record a number from 0 to 100 that is your estimate of the contribution that the option, across the top, makes to the goal, down the side. A major contribution is a full 100. No contribution at all is a zero. Now, add up the values in each column and record it below each column. That number is the contribution score for the option.
What to do?
This last step gives you your answer. Below each score, record the cost to implement that option. Be careful to estimate this cost based on as much real information as you can find. It is important to avoid fooling yourself with inaccurate or overly optimistic cost estimates.
Take a look at what you have: the total benefit (the sum of all the contributions) and the total cost of each option relative to the goals of all the players. Your answer is the option that gives you the most relative benefit for the least relative cost.
Remember the key words: Players, Goals, Options, Contributions, Benefit, Cost. You’ll make great Really Big Decisions.
Kirk Hoaglund
Clientek
612.379.1440
ki***********@******ek.com
www.clientek.com
