In a recent meeting with a veteran business owner, whose company we’ll call ChangeCo, the conversation quickly turned to his vision of significantly expanding his business over the next three years. This is not an unusual topic these days, as owners of a certain age decide they have one last big push in them to grow their business beyond its current boundaries.

Visions such as doubling or even tripling the size of the business; acquiring a competitor or complementary operation; or expanding the plant, bringing on an investor and buying the latest production equipment from Europe are more common than one might think with owners whose ‘big idea’ days would seem to be behind them.

What happened to owners selling the business or handing it off to their kids so they can sit back and enjoy the good life at the beach?

Instead we’re frequently using a word around our office that describes what business owners are really thinking about - transformation.

As defined, this means “a radical change that orients an organization in a new direction and takes it to an entirely different level of effectiveness.”

Radical? Really? When you could be sitting on the beach? Apparently.

Many of these seasoned business owners have been here before. They’ve seen the opportunity, taken the risk and made it happen and they understand the need to plan these big initiatives with military-like precision.

Plan to Win

During WWII when the Allies were moving into Germany, they had to map their routes based on the demands of redeploying newly designed 70-Ton tanks over country roads - tanks that, because of their new design, were too heavy and too wide for the existing infrastructure. Making this happen involved enlarging roads and building wider, stronger bridges. This had never been done before. It required a whole new range of skills - structural engineers, designers and construction crews. But most importantly it required that leaders adopt a mindset that acknowledged that the development of a whole new plan and a change in thinking for all stakeholders was the way they would win the war.

Infrastructure Before Action

Transformation impacts many aspects of a business - both inside and outside the organization. Before the offer to buy out a competitor is made, or new equipment is purchased or an investor is approached, a detailed plan needs to be developed for how to express the new vision for the business, and build out the infrastructure that will achieve that vision.

In the case of ChangeCo the owner’s belief was that changes were essential if the company was ever going to appeal to the next generation of buyer, whether that buyer was his son or an outside party. He was planning to acquire some next generation equipment that would enable him to dramatically expand the product offering he could provide to his customers.

But what he hadn’t thought about was that this business transformation plan needed to consider all of the company’s stakeholders, in order to adequately prepare for what lay ahead.

Our recommendations started with developing a detailed understanding of how to create a change of thinking about ChangeCo with all of the company’s stakeholders, so that the owner could get the support that would be required to achieve his vision with his new plan.

Your Stakeholders’ Perspective

As an owner considering or going through a transition (or transformation)

yourself, you too may want to give your various stakeholders’ perspective some consideration.

• Customers: Do your clients completely understand how your new capabilities will benefit them? Will they support you?
• Management: Will your team be able to handle this change or will the
• transformation defeat them – and in turn you?
• Employees: Is your staff aware of where the company is going and what will be expected of them? Are they the right people for the new job?
• Financial Partners: Does your banker fully understand and support your vision or do you need a financial partner or investor? If so, what will they be looking for in an investment?

Setting off on the road that will transform your company to an “entirely different level of effectiveness” can definitely be an exhilarating and worthwhile venture.

But all of your stakeholders need to be aligned with your thinking if you are going to successfully implement your plan.

Owners need to be sure that the road is wide enough and the bridges strong enough to support the vision that they will be advancing down that road.

About John Hotson

John Hotson is a speaker, entrepreneur, writer and senior

business advisor. John is a founding partner of the Business Transition Alliance and works hands-on with business owners to help them develop and implement effective strategies that increase the value and profitability of their business as they prepare to exit.

(Hotson is a guest speaker at the Toronto Business Transitions Forum on May 14)