Making Consistently Good Decisions

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 Three—Making Consistently Good Decisions

All companies’ structures and performances are the result of past management decisions. To paraphrase Peter Drucker, when he started his work, he thought that management was responsible for 85 percent of the problems in companies. After years of research, he found that the number is approximately 95 percent.

The typical middle-market business owner is alone. No one in his organization is a true peer. He cannot tell others of his real fears. There is no forum to truly vet his thinking. Without challenge or input, his decisions are often not optimal.

As private companies grow, many owners tend to shy away from seeking external counsel. They believe they have the answers. Owners make decisions and design strategies in a vacuum, fearful of revealing the supposed secrets of their business. They fight for short term survival instead of long-term success. Decisions are embedded in the corner office and not vetted internally or externally. Owners make decisions either too quickly or too slowly. Often, there is no active strategic plan or planning process. If this plan is absent, then decisions are made without a clear view of their impact on future 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.

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