The Key to Long-Term Shareholder Value, Part I

The Key to Long-Term Shareholder Value, Part IBaylor

Legacies Newsletter
by Donald J. Jonovic, Ph.D.

Owners of closely held companies, by experience, inclination, necessity, and, often, personality, tend to focus on the short term. Most available waking hours are absorbed by immediate problems, sudden opportunities, annual profits and cash flows. Fortunately, a successful business can, in fact, be built this way. It happens every day.

Unfortunately, this focus on immediate challenges and rewards is definitely not the way to build the shareholder value of that successful business for the long-term.

Consider how this outlook affects transition. Few would doubt that a smooth ownership and management transition in a family firm can enhance the value of that firm to shareholders and potential buyers. Even so, in companies with a short-term focus, transition (when it’s thought about at all) is seen as an “event” in some distant future: “We’ll get to it when the problem arises.” This is wrong. Companies don’t suddenly decide to have a transition any more than a woman suddenly decides to give birth. Transition is a process. It is a way of going about things. More…

Diversity in the Workplace

Democracy in the Workplace
by Dr. Edward Lawler, III
University of Southern California

This call goes out to family business owners, managers and employees:Get involved in each other’s business!Read on and keep two ideas in mind.

One, any employee may have secret talents and ambitions that can help grow your company.
Two, in the increasingly complicated work place, it becomes more and more difficult to judge the worth of a worker.
Democracy in the work place might sound like a lofty ideal based more on ethics than economics, but motivation expert and USC Business professor Ed Lawler has a formula for companies that may translate into results you can take to the bank (And it can help smooth out owner-successor relationships, too).

Total quality management.Creative problem solving groups.Suggestion teams.These are all innovations the publicly-traded family business Motorola Corporation has used to restrict the growth of management layers in the organization.Why? “Supervision costs money.” More…