ACCOUNTANCY: With Matthew Bellingham, Bellingham Wallace
The Godfather of all Decisions
Matthew Bellingham is a Director at Hayes Knight, an innovative chartered accountancy practice, where he specialises in strategic planning and business improvement.
firstname.lastname@example.org – www.hayesknight.co.nz
“There just wasn’t enough time.” Who would have guessed that this classic quote from Marlon Brando in the Godfather trilogy would be echoing through many boardrooms today? Especially from those wishing they’d started the succession or reinvention journey earlier. Hopefully their businesses don’t end up ‘sleeping with the fishes.’
Perhaps a higher value and a smoother transition could have been achieved if their exit was better planned and proactive steps were taken at the outset. Perhaps many of those businesses that have struggled or failed over the last few years could have had a different outcome. Baby boomers are getting older and health concerns are starting to plague the initial timeframes laid down by owners of all ages. The Global Financial Crisis is still taking a toll. For many, the luxury of time is a limited resource. Hands are getting forced and for some they’ve simply run out of time to groom their businesses, or even their successors, for a sale on their terms.
Advisory boards have been re-invented, with a shift towards engaging independent skill sets onto a management board to lend valuable input to the organisation’s steering committee. Some think of this as a combination of ‘growing up and coming of age’ that is being employed by many of our leading enterprises as they take a corporate trailblazing role.
Episodes of TV series like The Sopranos, Sons of Anarchy and Underbelly highlight the need for a successful leadership team in what are fictitious businesses. In a somewhat comical and even ironic way, these story lines emphasise the need for collective management to get a more powerful outcome. Not surprisingly, key characters want to be part of succession planning and business reinvention. What we can take from this is that planning should always be at the forefront of an executive’s mind and that there should be people available to lead an organisation should there be an unplanned exit of a key person or some unforeseen crisis. What would happen to your business if you had a serious illness tomorrow and had to quit immediately? Would it operate as profitably long-term, would it command the price you demand with minimal effort, or would your estate be left with some severe issues to work through?
Reluctance by a working owner to surround themselves with an independent board that consciously pushes their comfort zone and demands change is adversely affecting shareholder value and annual take home profit. It’s time for SMEs to get on board with the governance and succession program. This is a realisation many mature executives have already discovered and a lesson tomorrow’s leaders have recently learned.
We’re certainly seeing a difference in results between those businesses that practise this discipline and those that don’t. Sure, succession’s just part of the mix in a governance programme, but dealing with the issue before you need to is about creating choices and doors of possibility. Unplanned amalgamations or takeovers/ buyouts because a more attractive business model has been created means the exit process can be fast-tracked.
If steps are taken, there will be enough time and the chance of a successful exit will be dramatically increased. In Godfather terms, “the family will be looked after.”
Make sure you are prepared and have options. Contact Matthew Bellingham on 09 379 1584.