Escaping the Value Creation Trap

The Five Challenges

We have seen CEOs and owners struggle to meet the challenges to building sustainable value in their companies. These challenges are shown as a progression from low value at the survival stage to a high value exit plan at the top of the stairs.

Challenge Number Two—Escaping the Value Creation Trap

According to The Wall Street Journal, the companies in the S&P 500 lost over $7 trillion dollars in value from the end of 2007 to 2010. Middle-market companies were hit just as hard. An owner may now find himself or herself trapped in the company. Often the owner cannot see how the company’s value can be increased doing business in the same outmoded model. The company does not have enough value for the owner to sell and retire.

How can the owner devise a new strategy that will build enough value over the next three to five years? What new internal processes and disciplines must be added? What team can make this happen? How can the owner get out of this trap and gain his or her freedom?

Owners and management often fail to design strategies that will create value that is attractive to lenders, investors, or buyers. In other words, they “fail to plan” to create sustainable value.

How to Meet the Challenges

Overcome the challenges with a strong internal team supported by an advisory board and the governance process it brings to the company. The authors have created an effective advisory board process called the professional advisory board process or PABoard process. Learn more in Game-Changing Advisory Boards, available soon on Amazon.

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