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Murray is Managing Director of Strachan and Partners, a specialist business advisory consultancy, and Chief Executive of Albyn Ventures, a business investment group. He also holds a number of non-executive Chairman and director positions in a diverse range of companies throughout the UK, many of which he is a shareholder in. He is also Vice Chairman of the Entrepreneurial Exchange in Scotland.

Sunday, 15 May 2011

What are the key success factors for taking the business forward after an MBO?

I was recently interviewed by Michelle Rodger of the Scotland on Sunday about my thoughts and experience of management buy-outs (MBO’s).  Over the last decade, I have been involved in both leading and advising on a number of MBO’s and /or management buy-in’s (MBI’s).  The most significant of which was the MBO (in 2003) of The RGIT Montrose Group, a leading provider of HSE & specialist training solutions to the international Oil & Gas Industry.  One of the questions Michelle asked was, “What are the key success factors for taking the business forward after an MBO?”
I believe that the key success factors for a MBO are largely the same for any other entrepreneurial opportunity.  These are:
  • a clear vision and deliverable plan.
  • belief, passion, drive and determination amongst the MBO Team.
  • clear and visible leadership.
  • an ability to communicate the vision and compel others to follow.
  • having a clear plan but being prepared to shape as you go and /or circumstances dictate.
  • being ruthless with costs and “passengers” - cutting deeper and then building back to give yourself a chance at the start.
  • rapid and significant improvement of processes, procedures, systems and management information.
  • ruthless cash management - "every pound is a prisoner" and “Cash is King"
  • pay down loans as quickly as possible to give yourselves head room.
  • prepare a 100 day plan and address all the key issues quickly to provide a stable platform for future growth.  You need to be ruthless & very focused.
  • get complete control of the business. Stir it up and make it clear to all that things have changed and a new regime is in place.
  • tighten authorities and develop a new commercial culture where "every pound is seen as a prisoner".
  • build the best team around you and ensure that they are totally aligned in every sense!
  • execution, execution, execution and a clear focus on the delivery of results.
  • develop good relationships with your funding partners ensuring clear, early and open communications.
  • get energy and enthusiasm into the whole team and get them behind the MBO team and plan. Make sure they all know what's in it for them!
  • constant and consistent communication of progress to all stakeholders.
  • lastly be prepared for a lot of hard work, difficult choices, sacrifices and a lot of "blood, sweat & tears".

Murray Strachan
Murray works with executives, funders and shareholders to recover & create value!  You can contact Murray via his website www.murraystrachan.co.uk or follow him on twitter @murraystrachan

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