May 2021 Volume 3

OPERATIONS & MANAGEMENT

Strategic Value Anytime Building strong Strategic Value in your company is a good idea anytime. It does not matter what stage of growth or life cycle your company is in. It doesn’t matter what the current or projected economic climate is. It is always the right time to be building Strategic Value. It’s not a question of whether strong Strategic Value will pay off. It’s a question of how and when it will prove to be the most important thing you, as CVO, did for yourself, your business, and your stakeholders. Ted came out a winner, but he could’ve gained even more. The benefits of creating strong Strategic Value are much more than simply a large sale price. Had Ted done what he eventually did when we first started working on his business, he could’ve reaped the benefits for years before the eventual sale of his company. It’s like fixing up your house just to sell it. Sure, you will get a higher price, but the buyer gets to take advantage of that nice new kitchen while you lived for years with the outdated one. In future FIA Magazine issues, I will discuss each of the pillars and their components inmore detail.However, you can start your Strategic Value acceleration journey by visiting www.chiefvalueofficers.com and taking the no cost or obligation Strategic Value Assessment to obtain your current CVO score and assessment. ■

number of things that make up Strategic Value and together create a great company that stands out in the crowd. Each of these things contributes to building your company’s Strategic Value. Each are important in themselves, but it’s only when there’s strength in many things that a company becomes a “Gotta Have.” So now, what are these things? They’re everything that makes your business work, including your team, your product or service, your operating practices, your culture, your industry, and your profitability. They’re the Components of Strategic Value. To simplify, I’ve grouped all these Components of Strategic Value into one of four categories that I call The Four Pillars

1. Financial 2. Strategic 3. Operational 4. Industry

Think of them as the legs of a table. The legs support the tabletop. If the legs aren’t all the same strength, the table will be unstable. As Ted found out, the lack of strength in just one pillar seriously hurt Faraday’s Strategic Value. To further help in assessing the components of value in your company, you can group them into categories within the Four Pillars. Each of the pillars has three or four categories.

Joel Strom is the Founder and CVO at Chief Value Officers. He is also Managing Director of the Value Creation Advisory Practice at CKS Advisors, investment bankers focused on maximizing value. He can be reached at joel@joelstrom.com

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FIA MAGAZINE | MAY 2021