The story – Series 3, episode 5 – who works on the project?

Let’s remember where we left off: we received many questions, we gave answers and they came back with more questions. Who does all that answering?

Because I have many of the answers, but I have no idea how to answer most of the questions, the issue of involving people from the company arises. The natural question is “is it good or bad to do that?” The answer is that usually – it’s both good and bad.

It’s good to let people in the company know about it because you can receive help and build a better case, with more details and consistent answers. It’s good because people won’t be puzzled about why you ask for things you have never asked before. It’s good because you are honest with the people who work for you; you are open with them. They will appreciate it.

It’s bad, because it defocuses the company. People will start asking long before it’s even the case “what about me?” – in other words, what is going to happen to me after the company is sold. This will decrease the productivity and the quality of the joint effort. It’s bad because, if it’s not well managed, it may seem like a moment when interests diverge. It’s bad because, if the deal doesn’t come through, it’ll give way to many questions. And, don’t forget – it’s bad because it can get in the press long before it’s even the case 🙂

The correct approach is to involve people gradually, as the process develops and acquires reality. Top management probably has to be informed of this moment – the moment in which there is an apparent real interest in the deal. It should be explained why, what everyone gains from this and what the company gains. What the phases, the alternatives (including the alternative of things not working out) are. And goals must be aligned so that they are “ours”.

And then there is a good while when the rest of the company doesn’t know, simply because there are still less than 10% chances for things to happen , and because someone has to focus on the process of business growth..

We’re already at the beginning of February and we’re still answering questions (you remember we started on September 24, so in four months and a half we haven’t gone forward at all). As I was saying in the previous post, most of the questions end up clarifying our ideas too. We think: “If the deal doesn’t come through, at least we learnt we need to do this and this and this”. We find risks we have never thought about (and we wonder if they are real or if people bring them up only to lower the price later on 🙂 and we are already building ideas to negotiate around their questions). We find opportunities we never thought about, KPI (Key Performance Indicators) we don’t monitor but that we now realize it would be good to understand.

Speaking of KPI – a decent number of indicators you look at to understand how the company works is around 100. Ideally, for a relatively big company you would need 500, but you need a team to build/follow/analyze them. And this is for you to understand that it’s not enough to see how much money you have in the bank or how much you invoiced this month in order to understand your own company.

We are already thinking that it’s time for a new step and we politely tell people at the end of an email in which we answer questions something like “I hope I’ve answered all your questions and so it is time to have a talk that should take us to the next level”..

Note: This entire series is inspired from reality but it is not a word-for-word translation of it. I adapted all of the events/stages/documents/facts that had to do with the transaction in such a way as to a) not violate confidentiality and b) be as useful as possible to entrepreneurs that haven’t gone through something like this yet.

(English version by Teodora Popescu)