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The biggest issue facing companies with stagnant or declining revenues

by on October 21, 2014

aligned teamOne of the most common reasons for a low valuation is stagnant or declining revenues.

If revenues have been flat for some time, the hole the valuation is sinking into gets deeper and deeper.  It may eventually hit bottom but it’s so hard to climb out.

So what do most companies do?  They focus on increasing revenues.  But how does a CEO get revenues to grow?

That is the crux of the problem because the stagnant or declining revenues isn’t the problem.  That’s the symptom.

The problem is somewhere else and it’s probably more than one issue.

The biggest issue facing companies with stagnant or declining revenues is that they face the same frustrating challenge of establishing, demonstrating and articulating their company’s valuation drivers to not just their analysts and investors, but most importantly to their employees.

Is every man and woman in the company on the same page…marching in the same direction?

Put another way, the team is not properly aligned.

How do you know if they’re aligned or not?

Let’s start by defining what a mis-aligned team looks like.

The team, which used to willingly work 60 hrs/week now grudgingly do 40 hrs./wk, and the office is empty at 5:00 as everyone runs to the door to leave.

You’re losing key employees and are suffering a high-turnover rate.

Companies like this suffer from an improper system of communication.

How can you tell?

Your employees don’t understand your business and they certainly don’t understand your risks.

As a result, your all-hands meetings and lunch-and-learns aren’t generating direct questions from the lowest level employees to the CEO.  They’re tuning you out.

Why?

It could be they’re embarrassed to ask because they don’t like public speaking.

Or it could be that the corporate culture discourages risk taking.

As a result, there continues to be a high rate of turnover and loss of key employees.  There’s just a lack of energy.

Many executives think, “When sales start to grow again they’ll be better, more energized.”

But it doesn’t necessarily work that way.

It’s very likely that even if sales do increase for some reason you’ll still end up with a disenchanted employee base, making the sales increase unsustainable.

You’ve probably seen it where the company institutes some great incentive to the sales team and they hit it out of the park for a quarter.  One starts to think we’re unstuck, that revenues will start to flow strongly again, only to find that the next quarter was the worst quarter ever.

Why does this happen?

Because these companies are treating the symptom not the cause.

A company with the team properly aligned find that the staff cares about the direction of the company, knowing it requires sustainable effort.

The employees understand the business risks.  And they feel connected to the results.

How does a company make that happen?

Not by providing empty mission statements and reiterating corporate values.  But by connecting with individuals.  By helping them to feel like they make a difference.

If you want to learn how your company can connect with your employees so your team is aligned so that your revenues can grow rapidly, contact me for a quick chat about the Valuation Amplification Process.

I also invite you to download the free white paper and find out How to Quickly Increase Your Valuation: A Proven 5 Step Process.  http://www.therevenuegroup.net/free-offer.html.

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From → Strategy, Valuation

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