What makes a good owner strategy?

Planned ownership produces better and greater owner value.

Owner strategy is a key factor in a company’s success and long-term development. A well-formulated owner strategy gives owners clear guidelines on why they own, what goals are set for the short and long term, how ownership is managed and how continuous growth in value is secured. The role of an outside facilitator and expert can often be invaluable when the strategy is drawn up or updated. Below we look at the most important questions of an owner strategy.

1. Why do we own?

The first question an owner strategy must answer is the fundamental purpose of ownership. Why do we own companies, properties or other assets? The goals of ownership can range from pursuing financial profit to maintaining a strategic market position or promoting social values. When the reason for owning is clear, all strategic choices and decisions can be aligned with it.

Here the view of a skilled outside facilitator can be very useful. An outside professional can help clarify the fundamental reasons for owning and make sure the related decisions are made thoroughly enough and with the far future in mind.

2. What do we own and what are we aiming for?

The second important part of an owner strategy is to understand what we own and what we aim for with it, in both the short and the long term. The assets can be companies, properties, shares or other asset classes, and they can be used to pursue, for example, stability, growth or market leadership. In the short term the goal may be to secure liquidity or strengthen cash flow, while in the long term the aim may be to establish market position and achieve sustainable growth in owner value.

Outside facilitation can again be a very useful tool in setting these goals. Experts can offer a valuable perspective on how markets are developing and how assets should be managed in different economic and market contexts.

3. How do we own?

The form of ownership is as important a question as its object. Owners can be either active or passive. An active owner takes part in the company’s decision-making and strategic steering, while a passive owner concentrates more on supervision and following returns. Whatever the role, it is important to make sure the assets are managed professionally and the owner’s role is clearly defined.

Here too an outside view can help. Experienced outside facilitators can assess the owner’s role critically and advise on how ownership should be managed in different situations to secure the best return and the company’s long-term success.

4. How do we secure continuity?

Securing the continuity of ownership and preserving the value of the assets is a critical part of an owner strategy. This is especially important in family companies and other long-term ownership relationships, where changes of ownership or generation are central challenges. It is important to plan carefully how ownership is transferred to future generations or new owners and how the value of the assets is secured in these transitions.

The role of outside facilitation is particularly important here. A professional can help build a generational change in a controlled way and make sure changes of ownership go through without disturbing the business. With an expert’s help it is also possible to make sure the future owners are ready for their role.

5. What is the big vision of ownership?

Finally, an owner strategy must define a clear vision of what the owners want to achieve in the long term. The vision can be ambitious and steer all work towards big goals, such as growing the company into a market leader or achieving global impact on the principles of sustainable development.

It is also useful to draw on an outside expert in clarifying the vision and embedding it in the strategy. An outside perspective can offer fresh ideas and support realistic planning for reaching the vision.

In conclusion

A good owner strategy answers the questions of the purpose of ownership, its goals, the owner’s role and securing continuity. Growth in owner value is the foundation of everything, because it includes success in financial results, in employment and in generating tax revenue. Often the best way to build an owner strategy is to start from the vision and build solid steps towards making the dream come true. In addition, outside facilitation and an expert’s views can add valuable input to creating and updating the strategy, which helps make sure every step leads towards the big vision of ownership.

By Ville Tolvanen. Originally published in Finnish: Millainen on hyvä omistajastrategia?. More in English: Aura Boards — start here.