Merger & Acquisition Insights

Building Business Value Through Leadership, Culture, & Independence – TCA Event Recap

Posted on July 28, 2020 by Fusebox Marketing

July 10th, Tenney Group Delivered Part 2 of a three-part deep dive into “Building Business Value in a Tough Economy.” In this highly interactive workshop, Tenney Group made the case that big money is made at the closing table by investing in leadership, culture, and owner independence. Here are three takeaways.

1. Top performing company cultures may not look like what you think.

Tenney Group shared a story about walking through the facility of a $100M trucking company. The company is known for being an industry innovator, a top performer, and on the cutting edge of new technology. However, it is not a trucking utopia as you might think. In fact, as Tenney Group walked through the tour, he saw a handful of heated discussions in various corners of the office. No one seemed surprised this was taking place. On the contrary, it seemed expected. This culture, like many top performing cultures, encourages passionate leaders to fight for ideas that could help the company win. Internal debates happen all the time. Keep in mind, these debates are respectful, but they are not designed to create comfort. To get to excellence, you must be willing to get uncomfortable. One of our workshop attendees, a VP of a Midwest trucking operation, shared, “I would love for my team to function like that. Everyone is so afraid to “rock the boat” or to upset someone. Consequently, nothing extraordinary ever happens. We don’t allow ourselves to get close to experiencing that type of excellence.” In this particular case, the market valued this business $20M higher than a similar $100M company with a less dynamic culture.

2. Owner dependence is the surest way to discount the value of your trucking business.

Owner dependence creates risks around a transfer of ownership. Increasing risks equals decreasing the value of the business. It’s the most important formula you need to understand as you work to build value in a tough economy. If every key decision is filtered through the owner, what will happen when the owner sells the business. Who will the buyer depend on to drive the business forward? Don’t be like the business who hears from a possible buyer, “With all due respect, this is not a business. This is a job.” Start systematically de-risking your business by reducing dependence on the owner or owners. Regularly schedule when you push responsibility down to the next layer of leadership and watch your business value go up. It’s a beautiful thing.

3. As a leader, are you a diminisher or a multiplier?

Everyone has their own leadership style. I have learned the hard way that needing to be the smartest in the room can place a very low ceiling on your leadership team’s ability to impact your business. There is much more upside when we set aside our egos and create space for valued team members to bring solutions and creativity. In the book, Multipliers, Liz Wiseman, shares what separates “Diminishers” and “Multipliers.”  She cites that leaders were able to raise the performance of key employees – performing far beyond what the employees believed was possible from themselves – production levels jumped 120% relative to what they had customarily produced in other environments. So, what was the difference? A multiplier creates both comfort and pressure in the work environment. A multiplier provides space, but they also expect extraordinary work in return.  A multiplier defines ownership, invests resources, and holds people accountable. Most of all, a multiplier views a leader’s primary role as one that ensures successive generations of leaders.

Be sure to tune in to our free, final installment of the Building Value in a Tough Economy series August 7th. The focus will be on offsetting rising expenses through acquisitions. Register here: https://www.truckload.org/events/offsettinggrowingexpenses/

Tags: Selling a Business

Category: Articles