type header copy here. your growth plan… organic or acquisition driven? january 29, 2014
TRANSCRIPT
Type header copy here.
Your Growth Plan…Organic or Acquisition Driven?
January 29, 2014
Member Profile
Tony Roni’sand
“Philly’s Big Comeback”
Tony Altomare
http://www.youtube.com/watch?v=6H0jk-2QLUg&feature=player_embedded
Member Profile
Member Profile
Tony Roni’sand
“Philly’s Big Comeback”
Tony Altomare
http://www.youtube.com/watch?v=6H0jk-2QLUg&feature=player_embedded
Member Profile
Tony Roni’sand
“Philly’s Big Comeback”
Tony Altomare
http://www.youtube.com/watch?v=6H0jk-2QLUg&feature=player_embedded
Q. Does your ownership group want to be in harvest mode or growth mode? Discuss both scenarios.
Q. Are you intentionally building new assets and value streams or are you milking old assets? Is this good or bad?
Q. What are the issues and criteria for deciding if you are in a harvest mode…or a growth mode?
Harvest Strategy Growth Strategy
EXERCISE: Ownership Strategic ThinkingWhat is your family’s long term wealth creation strategy?
Key Concept: “It is fine to be in harvest or growth mode as long as it is an intentional strategy and everyone understands the ramifications of your choices.”
© Institute for Family Enterprising
Ownership
Management
Operations
1. Act within the functional categories2. “Tease out” the functional categories3. Create a distinct ownership function4. Establish governance structures5. Mentor successors in the functional categories6. Plan transition within each of the categories
© TELOS
Thinking Like Shareholders
Define their unique function and clarify agency relationships
© Institute for Family Enterprising
OwnershipLegacy
Board of Directors“oversight”
Employees“task”
Top Management“directive”
ShareholderResponsibility
Foundation“service”
© TELOS
Shareholder Group“accountability”
Family Ownership Group“stewardship”
Clarifying Roles & Responsibilities
© Institute for Family Enterprising
Shareholder GroupOWNERSHIP
1. Define ownership Values, Vision, Mission• Who are we?• Where are we going?• How do we get there?
• Newspaper headline exercise.• Example: Cardone Industries
2. Create / elect management oversight structures• Empowered Board of Directors• Advisory Council• Association of Peers• Consultants
Clarifying Roles & Responsibilities
Shareholder GroupOWNERSHIP
3. Financial benchmarks and basic liquidity• Dividend Philosophy: 90% of profits reinvested• Growth Philosophy: Exceed industry standards• Profitability Philosophy: After tax net operating profit to = 5% of sales• Leverage: Debt : Net Worth not to exceed 1.5 : 1.• Sale: Must receive ownership approval to sell more than 25% of the value
of the company.• Liquidity: Buy-sell agreement.
4. Family involvement policy• Compensation philosophy: Equality or differentiated compensation?• Employment philosophy: Entitlement or opportunity?• Family roles and responsibilities: What is the role of a shareholder in our
family?• Conflict of interest policy: Outside activities and ownership?• In-law policy: Will in-laws be allowed to work in our company?
Clarifying Roles & Responsibilities
Organic vs. Acquisition-driven Growth
John Ratliff
Membership Value Proposition
1. Ownership-level Strategic Plan: Defining your shareholder agenda
2. Ideas that Impact: World class education3. Next Generation Entrepreneurship: Skill
assessment and professional development path4. Peer based learning and benchmarking:
Affinity groups and networking5. On-line learning: Network for Family Business
6. Implementation Support: Ownership, Board, Management levels
7. Resources: Morgan Stanley, Price Waterhouse Coopers, Saul Ewing, Creative Financial, AUA Capital, SJU
Next time:
March 19: Competing in a Hyper-Competitive Global Environment