With our last option solving example, we followed the President of a successful, growing business, who was orchestrating the sale of his company. His owners-shareholders are anxious to sell, despite his success – possibly to get their best price – and there was one, but now three, serious bidder(s) in the picture. He has done a good job and should do what he can to leverage that situation.
He used the option solving approach to help figure out his own and the owners best option in the circumstances. He had stopped at four options, needing time to determine the fifth. After further thought that turned out to be: “Return to my home ground (where he emanated from, as he wasn’t enjoying current location) and pursue a senior career elsewhere.” The considerations stayed the same.
With that fifth option in place, he then allowed himself some emotional distancing time for his intuition to reflect and pinpoint his optimum choice. This turned out to be: “Aggressively pursue current solid bid(s) and request small equity stake.” He then set out to Peel the Onion on this option to clarify an optimum way for doing this; potentially in the owners best interests.
Now his question was: “What is the best option for our company, when aggressively pursuing our best bid; considering that current owners are determined to sell, we only have limited serious bids so far, desire to leverage an equity position, and time is running out?” Again, the considerations were the same.
He then put his Yin and Yang “bookends” in place, which were as follows: “Just walk away from current bids ,” at one end, with, “Find capital backing from outside equity partners to buy the enterprise” at the other. This will be illustrated in our Latest Example, along with reasons why they were unlikely options.
Then he produced at least five plausible options for his intuitive capabilities to contemplate. These challenged his creative thinking and produced new possibilities that may never have occurred to him without the use of option solving. One of these options was: “Persuade owners to sell 49% of equity to me: then I buy them out in 3-5 years at enhanced value”… which was Option E. Again, this can be viewed in our Latest Example. Which one would you consider in the circumstances?
Now he needed to reflect upon these and discuss options with his current ownersto move things along, despite his own preferences. This included discussing the issue of getting a small equity stake at the right time – discuss in principle now and, even if he gets a rebuff, raise the issue again when a deal is getting red hot – a little more difficult to pursue.
If you have an issue example of your own, please share it with this blogger, through the COMMENTS area.
Thanks Option Solving. (NOTE: Next posting in 2 weeks: “How should a newly healthy CEO approach his Board regarding succession?” We’re always interested in your COMMENTS or go to peter@ileadershipsolutions.com to connect with the blogger.)
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