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Part 2 – Ultimate Guide Of How To Value Your Company: Organizational Value

Part 2 of the Ultimate Guide to the Value of Your Business: Organizational Value

Was it time?

Jean had begun to think it was time to transition out of her business. Her product was doing well – they were at the cusp of closing another big customer. Everyone on staff was pulling together to get this done.

For many business owners, recognizing when it’s time to prepare the company for transfer is challenging. It’s best to start the process with an examination of the six value drivers of any company.

Jean had begun assessing the company’s strategic value. Now it was time to look at Organizational Value.

What Is Organizational Value?

Company culture is the linchpin of Organizational Value. But Organizational Value also includes a company’s internal communication, systems, and processes.

These internal systems work to prevent fraud, avoid workplace accidents and dodge litigation. A company’s culture, although seeming invisible can help or hurt a company.

Jean’s company still felt like a startup – albeit a startup with some structure around it. She remembers when the culture was free-wheeling and the long hours to get those first customers up and going. The feeling of camaraderie and the sense of purpose by the employees really boosted the company.

As the company grew and more professional managers were hired, the crazy was corralled without destroying the fun and the vision.

Why Is Organizational Value Important?

As an organization, it’s important that your company is communicating what needs to be done, by whom, and by when. A critical part of this communication are the systems and processes in place to ensure the repeatable delivery of your product.

Good processes give your employees the roadmap they need to produce your products and services to the same high quality every time. Your customers expect to receive a consistent product.

Without clear, repeatable processes, companies struggle to deliver and may lose customers to better-organized competitors.

How Is Organizational Value Calculated?

Companies that have a great company culture and documented systems and processes are worth more to buyers.

Your company’s score is higher if:

  • Your company systems and processes are clearly documented
  • Your employees understand and use the processes to produce quality products
  • Your staff understands behavior expectations and the company belief system and performs accordingly

Improving Organizational Value

There are many routes to improving this value driver to increase the value of your business.

Improve your systems and processes.

If your company has not documented your systems and processes, start there. Often, employee “just know” how to perform their job. This is a great start, but if a new employee needs to take over, the learning curve can be long and painful.

Clearly written processes save time and money.

If you’ve already got written processes, congratulations! Take the time to go over them and make sure they are still current and effective.

Share your vision

Companies with a great company culture start with a clear vision and mission.

Culture is a part of a system of shared assumptions, values, and beliefs within the organization. Customers are better served by employees that promote that shared vision of the company.

Is your company vision and mission clear to employees, customers, and shareholders?

Improve organizational value by better promoting the company’s vision and mission.

Improve communications

Work on your company communication and ensure your employees, customers, and shareholders understand where the company is going and how you’re all going to get there.

In a valuable company, communication is two-way. Your employees are able to communicate their thoughts to leadership and leadership is effective at articulating the company’s needs to employees.

In today’s technology-driven world, there are many different ways to get your message out. Explore social media as well as email newsletters, instant messaging, and in-person events.

Is employee morale high? Do you have good retention rates, even in a tight employment market? Is productivity high?

Positive answers to these questions may mean your organizational value score is high.

Get An Exact Roadmap

Jean is still at the beginning of her journey to determine the value of her business. A great option for her is Forward Insights™. This evaluation gives her the data she needs to improve the value of her company through an Action Plan that includes increasing Organizational Value.

Is your company’s culture strong and well-known? Are you and your staff communicating well and providing high-quality, consistent products and services to your customers?

If not, the Action Plan provided through Forward Insights™ gives you the path to greater Organizational Value and a business that is worth much more.

If your company is a leader in Organizational Value for your industry, check out your strengths within the remaining 5 Value Drivers with Forward Insights™.

Don’t forget to read Part 1 of this series: Part 1 of the Ultimate Guide to the Value of Your Business: Strategic Value

Want to know more about the value of your company? Rest assured 35 years of experience is behind Management Insights™Forward Insights™, and Expert Insights™ – the tools you can use to increase the value of your company.

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Want To Increase The Value Of Your Business?

Quist Insights business valuation sample report

Our Business Valuation Software Will Show You EXACTLY What You Need To Do!!!

Increase Your Business Value