The Crown Jewels Of Your Business
While visiting London, England a few years ago I decided to do some typical tourist activities and headed to the Tower of London. If you haven’t been there it’s a great visit; full of people, intrigue, history and very expensive crown jewels. I wondered if the Queen’s crown jewels were actually insured or not, and if so to what amount. The reality is that if the crown jewels disappeared they would in fact be irreplaceable. Later as I thought more about them, I wondered what companies had that were their own crown jewels – the things that were simply irreplaceable no matter what insurance they might have to compensate against their loss.
Maybe a better business description is required now to fully explain. Think of your company’s crown jewels as the elements of your company that are in some way unique to you, your colleagues, your partners, your sales channels, your shareholders, your customers or your competition. Of course they may be unique to more than one group at a time, which if so only makes them even more valuable. They could include things like people, culture, expertise, process, intellectual property, money, property, customer base, partnerships or any of a number of other tangible or intangible elements. And, of course one of the key and most valuable questions executives should ask is, do they know what their own company’s crown jewels are. This really is a prerequisite and the answer should become the cornerstone of the company’s strategy moving forward.
Of course the identification of these company crown jewels may not always be obvious, and in fact alignment at the executive level can take much discussion and debate to get everyone on the same page. When everyone is eventually aligned, company strategy must now be created that will clearly identify these crown jewels for all stakeholders, and find ways of both protecting them, and also nurturing them over time through clear action – action that will make them even more important and create even larger competitive differentiation. It’s through this protecting and growing, that companies can take big leaps forward against their ever-aggressive competition.
The process can be considered a simple approach that encompasses (1) Identification, (2) Protecting and (3) Nurturing. So how do you go about starting the process by identifying these most critical of crown jewels in the first place? Try these key questions that might get you thinking deeply about Step (1):
1. Do you have expertise within your company that is irreplaceable?
2. Do your customers look at you as providing products, services or support that is differentiated significantly enough against your competitors?
3. Have you fully protected, and thought of how to fully monetize, your intellectual property?
4. Do your products or services have a time-to-market advantage over your competition?
5. If you had to lose three most-vital things from your business today, can you identify what the Top 3 might be?
Of course there are many questions that can (and should) be asked to get to the bottom of this key question. By so doing you will gain a deeper understanding of your business, and begin to see what makes your company different, and maybe even at this early stage how your competitive differentiation can be maintained, or even extended, over time.
After identifying these key elements, you MUST move to Step (2) and invest the pre-requisite time to understanding what you will now need to do to protect them from anyone, or anything, that might cause you to lose them. At this stage think of creating security defenses around them (just like the real crown jewels in England). These defenses are to stop losing them, or having them irreparably damaged in some way. Again I would suggest a questioning approach to uncover what can be done here (and since the crown jewels of your company are so vitally important), something to be done quickly.
1. Do we have watertight legal agreements in place for everything that requires them?
2. Do we have ways of keeping key employees motivated for the short, mid and long-term?
3. Are we doing enough to protect vital customer and partner relationships that we currently have?
4. Are we doing what’s necessary to preserve both cash (flow) and profits to extend our operating runway?
5. Do we have product, service and price strategies (in reserve) in case they are needed at short notice?
Once you have answered these and other probing questions to your full satisfaction (and implemented their recommendations), then it’s time to think about Step (3) which is all about nurturing and growing these most important assets of your company. When you ask these questions and expand your company strategy to incorporate these key elements, consider how (when implemented) they will add real enterprise value to your company. Enterprise value only comes when you have something of tangible value that a future investor would look upon favorably and pay a financial premium for. Consider these simple ideas to get you thinking about growing what you value most:
1. Long-term key employee benefits e.g. awarding time-based stock options, or profit sharing.
2. Aggressively extending the product/service roadmaps in line with strategic customer requirements.
3. Targeting a competitor’s business to weaken them.
4. Going on the Mergers & Acquisitions (M&A) trail to strengthen your position.
5. Raising more share capital to provide cash for expansion purposes.
As you can imagine all three steps are quite simple at the outset, but the winners in industry are the ones that become masters of them all, and simply implement them to a level better than their competitors. I also encourage that the “crown jewels” of any company are discussed openly amongst the executive team at least annually at the mandatory strategy sessions. These periodic checks will ensure they are being discussed at exactly the right time – when strategy is being reviewed/formulated, and when the necessary actions are being identified to fully realize these strategies. Here are a few companies to think about and what (might) be their crown jewels:
- Apple (technology, simplicity, design)
- BMW (driving dynamics, quality, sporty appeal)
- Google (patented search technology, innovation, creativity)
- Coca-Cola (recipe for Coke, distribution channels, brand)
- Berkshire Hathaway (Warren Buffett, consistent returns)
- Pittsburgh Penguins (Sidney Crosby – for the hockey fans!)
It’s clear many of the crown jewels of a company are able to attract, retain and even keep highly motivated key staff. These key staff may over time also become part of the company’s crown jewels and therefore be considered key human assets of the business. No matter what these assets are, it is an executive team’s responsibility to find, protect and nurture them to maximize overall company enterprise value. It’s this simple approach that can often help companies separate the wheat from the chaff, to focus on the few and not the many, and ultimately to give it the necessary direction on how strategy can be realized through clear and consistent action.
So, be like the Beefeaters who protect the Queen’s crown jewels – be ever attentive and whatever you do, don’t lose them on your shift.
Joe Connelly is Founder & CEO of Salesleadership.com, a worldwide Executive Sales Coaching and Consultancy company, with offices in Canada and Switzerland. Joe can be reached at firstname.lastname@example.org