Is Your Business Designed to Deliver Value?

May 09, 2013
  • Bob Chapman
  • Bob Chapman
    CEO & Chairman of Barry-Wehmiller
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Business leaders should feel a stewardship to those who join their organization hoping to have meaningful careers with a company that cares about them.

Our stewardship, however, extends far beyond the people who walk through our doors each day to all of our stakeholders. Embracing each group perceptively to create value for everyone brings about another awesome responsibility.

As leaders in business, we carry the awesome responsibility of embracing the design of our businesses.

One of the most meaningful ways that we touch the lives of our team members is by creating a thriving business that will be sustained over the long term, offering them the security to make the daily life decisions of providing for their families.

The quality of our decisions as leaders ultimately has a huge impact on the lives of those who come under our leadership. A growing, healthy business creates opportunities for them to develop and utilize their gifts and talents. Confidence in their future enables them to live their lives more fully.

After the tumultuous years Barry-Wehmiller experienced in the mid-80s, we emerged determined to create a new vision for the design of the business. We envisioned a resilient business, one that would not be vulnerable to the forces that caused our distress.

An integral part of our new design was the adoption of the Economic Value Added™ (EVA) methodology created by Stern Stewart & Co. for valuing company stock. Barry-Wehmiller is a privately held company with more than 400 shareholders, comprised of Chapman family members, employees and outside investors.

The EVA method of calculation answers this question for shareholders: If I make an investment, will it generate value in alignment with normal equity risk? Treating those who provide the ongoing source of equity as respected partners safeguards the foundation of our economic existence, which is critically important to our higher purpose of creating sustainable value for all stakeholders.

EVA methodology is a powerful tool to articulate value creating business strategies. It allows all stakeholders to envision a future of value creation and leaders to make thoughtful decisions as their business evolves. Because EVA methodology clearly calculates the value of our stock based on known factors, leaders in the business can accurately predict the impact of various strategies on value creation.

We focus on the business drivers that create long-term value, and every team member can understand why those drivers are important to our future success. Each team member can play a meaningful role in creating that future. EVA is an integral part of a business model that creates alignment, allowing all of our stakeholders to see a common path to a sustainable future.

In Conscious Capitalism, authors Raj Sisodia and John Mackey expressed a similar a view of stakeholder interdependence:

You cannot have a conscious business without conscious leadership. Conscious leaders are motivated primarily by service to the firm’s higher purpose and creating value for all stakeholders. They reject a zero-sum, trade-off-oriented view of business and look for creative, synergistic Winapproaches that deliver multiple kinds of value simultaneously…leaders of conscious businesses have a finely developed systems intelligence that understands the relationships between all of the interdependent stakeholders.

 

Thanks in part to the EVA method, since 1988 we have grown equity value by over 15% compounded per year through a combination of more than 60 acquisitions and organic growth. In other words, we have achieved what we set out to do when we committed to a re-design of our business model: created a healthy combination of value for all stakeholders and an extremely bright future for our 7,000 team members.

Do you have a vision for the design of your business that is worthy of the trust of those in your care?


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Need help in applying principles of Truly Human Leadership in your organization? Chapman & Co. Leadership Institute is Barry-Wehmiller's leadership consulting firm that partners with other companies to create strategic visions, engage employees, improve corporate culture and develop outstanding leaders through leadership training, assessments and workshops.

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