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In the ever-evolving landscape of global business, companies face unprecedented challenges to maintain their competitive edge and drive exponential growth. Amidst this dynamic environment, an M&A (Merger and Acquisition) based growth strategy has emerged as a compelling avenue for businesses seeking to achieve above-average growth rates. By strategically combining forces with other companies, organizations can unlock new opportunities, synergies, and scale, enabling them to propel their growth trajectory to unprecedented heights. In this thought leadership piece, we delve into the compelling reasons why M&A acquisitions lead to remarkable growth rates and showcase notable success stories that exemplify the transformative power of this strategy 1. Synergy and Scale: At the heart of M&A acquisitions lies the promise of synergies and scale. By uniting complementary strengths and resources of two or more entities, organizations can create a powerful force that supersedes their individual capabilities. These synergies manifest in operational efficiencies, cost savings, and optimized processes that significantly enhance overall performance. A compelling example of this concept is The Walt Disney Company's strategic acquisition of 21st Century Fox in 2019. Through this merger, Disney bolstered its content library, streaming capabilities, and international presence. The integration of these assets catapulted Disney into a dominant position within the media and entertainment industry, driving exceptional growth and reinforcing its status as a global entertainment powerhouse. 2. Market Diversification: In today's interconnected world, market diversification is an essential aspect of sustainable growth. M&A acquisitions allow companies to expand into new market segments or geographic regions, thereby reducing dependence on a single market and mitigating risks associated with market volatility. An exemplary case is Amazon's acquisition of Whole Foods in 2017. By venturing into the grocery retail sector, Amazon diversified its revenue streams and established a strong presence in brick-and-mortar retail. This bold move not only contributed to Amazon's impressive growth but also solidified its position as an innovation-driven industry leader. 3. Innovation and Talent Acquisition: The pursuit of innovation is a driving force behind any organization's quest for long-term success. M&A offers a unique avenue to infuse companies with fresh ideas and cutting-edge technologies that position them at the forefront of industry evolution. Moreover, acquiring companies can access a pool of talented employees whose expertise and vision can fuel innovation within the acquiring organization. A standout illustration of this dynamic is Facebook's acquisition of Instagram in 2012. By integrating the rapidly growing social media platform, Facebook tapped into a novel avenue for growth and established a more comprehensive social media ecosystem. This strategic move was pivotal in Facebook's sustained growth and global influence. 4. Speed to Market: In a rapidly changing marketplace, speed is of the essence. M&A acquisitions present a strategic advantage by enabling companies to swiftly enter new markets, access new customer bases, and gain competitive advantages without the protracted timeline associated with internal product development. A striking demonstration of speed-to-market is Microsoft's acquisition of LinkedIn in 2016. This landmark move fortified Microsoft's presence in the professional networking and HR solutions space, fast-tracking its expansion in the enterprise sector. While M&A-based growth strategies hold immense potential, companies must approach them with due diligence, meticulous planning, and thoughtful integration. The success of such endeavors hinges on comprehensive risk assessments, cultural alignments, and a shared vision for the future. In conclusion, the art of growth lies in making bold and visionary decisions, and M&A-based strategies provide a compelling framework to achieve above-average growth rates. By harnessing the power of synergies, diversification, innovation, and speed, organizations can navigate the complex business landscape with confidence and capitalize on untapped potential. As companies embrace M&A as a transformative growth catalyst, they embrace the promise of unleashing unparalleled growth, driving industry disruption, and redefining their place in the global market. The journey toward exponential growth begins with a strategic vision and an unwavering commitment to harnessing the power of collaboration and integration. Are you ready to embark on this transformative path to success?

The health club industry in the United States continues to witness dynamic shifts, and companies must embrace strategic planning to seize growth opportunities. In addition to understanding consumer trends, health clubs should explore expansion options such as franchising and acquisitions, which can lead to significant success. Let's delve into these aspects, supported by real-world examples: Franchising for Widespread Growth: Franchising has emerged as a potent growth strategy for health club companies seeking to expand their footprint rapidly. It allows entrepreneurs to buy into a proven business model, benefiting from brand recognition, operational support, and established marketing efforts. For health clubs, franchising offers a scalable approach to tap into diverse markets without shouldering the entire financial burden. One noteworthy example of successful franchising in the health club industry is Anytime Fitness. Founded in 2002, the company embraced franchising as its growth engine. By offering 24/7 access, personalized training, and a welcoming atmosphere, Anytime Fitness attracted a large customer base. Through a strategic franchising model, they expanded their presence to thousands of locations globally, becoming one of the world's largest fitness chains. Franchising provides a win-win situation for both franchisors and franchisees. Franchisors benefit from rapid expansion with lower upfront costs and reduced operational risk. On the other hand, franchisees gain access to a proven business model, established brand identity, and ongoing support from the parent company. Moreover, the franchising model allows health club companies to leverage the local expertise and knowledge of franchisees to adapt their offerings to regional preferences, enhancing customer satisfaction and market penetration. Acquisitions for Market Consolidation: In a maturing health club industry, acquisitions play a pivotal role in market consolidation. Larger health club chains or private equity firms seek to acquire successful players to bolster their market share, access new customer segments, and strengthen their competitive position. A compelling acquisition case is the purchase of 24 Hour Fitness by AEA Investors and Ontario Teachers' Pension Plan in 2019. The acquisition allowed the investors to capitalize on 24 Hour Fitness's wide customer base and geographical reach, creating opportunities for further expansion and operational efficiencies. Acquisitions present health club companies with several strategic advantages. Firstly, they provide access to an established customer base, accelerating growth and revenue generation. Secondly, acquisitions can lead to economies of scale, resulting in cost efficiencies and increased bargaining power with suppliers. Lastly, acquisitions offer an opportunity for diversification, allowing health club companies to expand their service offerings and tap into new markets or customer segments. Adapting to At-Home Fitness Trends: The rise of at-home fitness trends, accelerated during the pandemic, presents both challenges and opportunities for health club companies. To stay competitive, health clubs should consider incorporating virtual fitness offerings and digital platforms into their strategic planning. Peloton, a leading example of success in the at-home fitness space, offers a compelling model. With its interactive indoor cycling bikes and connected fitness platform, Peloton disrupted the traditional health club landscape. Health clubs can learn from Peloton's innovative approach and explore ways to integrate digital fitness experiences alongside their brick-and-mortar offerings. While at-home fitness gained traction during the pandemic, health club companies must view it as a complementary rather than a competing offering. By embracing the at-home fitness trend, health clubs can reach a wider audience beyond their physical locations, increase brand exposure, and foster member loyalty through personalized and convenient fitness experiences. Cultivating Community and Personalization: As health clubs evolve, building strong community ties and personalization remain essential for member retention and loyalty. Successful companies focus on creating a sense of belonging and individualized experiences. Planet Fitness exemplifies this approach, catering to a broad demographic with a non-intimidating environment and low-cost membership options. By fostering a judgment-free atmosphere, they have attracted a loyal community of members, making them one of the fastest-growing fitness chains in the US. Community engagement fosters a sense of belonging, encouraging members to be consistent with their fitness routines. By organizing group fitness classes, social events, and fitness challenges, health club companies can create a supportive and motivating environment for their members. Additionally, personalization, such as tailored fitness programs and one-on-one training sessions, enhances member satisfaction, increases member retention, and fosters long-term loyalty. In conclusion, the health club industry in the US demands strategic planning to thrive amid evolving trends. Beyond understanding consumer preferences, companies should explore growth options like franchising and acquisitions to expand their reach and solidify their position in the market. By adapting to at-home fitness trends and prioritizing community engagement, health club companies can drive long-term success and create a lasting impact on the fitness landscape. Drawing inspiration from success stories like Anytime Fitness, 24 Hour Fitness, Peloton, and Planet Fitness can serve as a guiding light for aspiring fitness industry leaders seeking to carve their path to prosperity. Embracing innovation, staying customer-centric, and continuously evolving will ensure health clubs remain at the forefront of the industry's transformation, unlocking new opportunities for growth and success.

Deciding to part ways with your business is a mentally, physically and emotionally challenging decision. The process is rarely clear, the future is foggy, and emotions run high. Family, friends and shareholders all want their say and often hold competing opinions. One of the top questions a business owner struggles with throughout the process is, "When is the right time to sell?". The "right" time to successfully exit typically resides at the intersection of the performance of the business, the performance of the economy, and your own personal goals. I have had the privilege to work with many business owners as they navigate these waters. I have also represented buyers and understand what they demand and take into consideration when looking to acquire. With this unique perspective, I have prepared a guide to help business owners make informed decisions. By taking a methodical and objective approach to the decision-making process, you can ensure that you're well-prepared to navigate the complexities of a sale and achieve the best possible outcome for yourself, your business, and the people who depend on you. The Business Profitability Prospective buyers will assess whether the business generates consistent profits and achieves desirable financial performance. Thus, the profitability of your business is the number one influence on valuation during a sale. Higher profitability translates into a higher valuation because most businesses are valued based on a multiple of EBITDA. Therefore, your EBITDA is your starting point and everything else covered in this article influences the multiple placed on your EBITDA. A strong track record of profitability indicates the business's ability to generate sustainable earnings. Typically, buyers will analyze a trailing twelve month (TTM) EBITDA, where more recent months carry greater weight. It is important to note that the majority of buyers will not consider forecasted EBITDA. While a strong forecast will influence the multiple, it will not serve as a starting point for buyers. In addition to evaluating the overall profitability, buyers and valuation experts will consider certain adjustments known as add-backs. These add-backs include owner compensation that exceeds a typical CEO salary, which is regarded as a discretionary expense. Such adjustments recognize that the owner's compensation may be higher due to their dual role as owner and executive. By adding back this excess compensation, the true earnings potential of the business can be accurately reflected, resulting in a higher valuation. Furthermore, one-time costs or expenses not expected to recur in future years may also be considered add-backs. These expenses could include consulting fees or special expenses incurred by the owner, such as personal expenses that are not directly related to business operations. By excluding these one-time costs, the add-backs reflect the normalized earnings of the business and enhance its profitability, consequently increasing its valuation. It is crucial to present a clear picture of profitability and highlight any relevant add-backs that can improve valuation. By demonstrating consistent profitability and justifying add-back adjustments, you position your business as a desirable investment opportunity for potential buyers, maximizing its value in the marketplace. Revenue The next most important aspect hitting valuation is revenue, but not all revenue is viewed the same. Understanding the impact of recurring revenue versus project-based work on valuation is crucial. Recurring revenue, particularly through scheduled maintenance contracts, holds immense value in the eyes of potential buyers. If your business has established contracts for scheduled maintenance, this significantly enhances its valuation. These contracts provide a steady and predictable income stream, showcasing the reliability and stability of your business to prospective buyers. The longer the duration of these contracts, the higher the potential for increased valuations, as they demonstrate long-term customer relationships and revenue sustainability. On the other hand, project-based work introduces a certain level of risk for buyers. When evaluating project-based revenue, factors such as project size in terms of monetary value, project length in time, and the type of work involved come into play. By its nature, project work is often perceived as more uncertain and volatile than recurring revenue streams. As a result, buyers may view new construction and one-off retrofit work as riskier due to its reliance on securing individual projects and the potential for fluctuations in revenue. However, it's important to note that project work can also offer opportunities for growth and profitability, depending on the specific market and industry dynamics. Acknowledging the interplay between recurring revenue and project-based work is essential when assessing the value of your services business. By recognizing these dynamics and positioning your business accordingly, you can make informed decisions about the ideal timing for selling your business and maximizing its value in the market. Customers Another crucial aspect impacting valuation is the nature of customer relationships. Strong connections with customers enhance the business's worth, indicating loyalty and recurring revenue. Conversely, weak ties raise concerns and lower valuations. It's important to determine who owns these relationships and ensure their transferability. Skilled management or technicians staying with the business post-sale instill confidence in customer retention. The composition of customer relationships also matters. Relying on third-party intermediaries like general contractors or help desks/dispatchers requires evaluating partnership strength and reliability. Consistently winning projects with contractors and maintaining long-term agreements with help desks/dispatchers can positively influence valuations but still do not carry the same weight as direct customer relationships. Customer concentration is an ultimate factor impacting valuation of the business. Heavy reliance on one or just a few customers raises risk and greatly reduces not only valuation but also interest of many buyers. Diversifying the customer base mitigates risk and should be a top priority. Strive for no single customer contributing over 17% of total revenue. End markets where customers operate also impacts valuation. Buyers seeking to enter or expand in the markets you serve value businesses higher— buyer reservations or volatility in your target end markets lower valuation. Understanding market dynamics helps position the business strategically and attract the right buyers. Assessing customer relationships, concentration, and end markets maximizes the valuation of a services business. Mitigating concentration risks and aligning with attractive end markets position the business for a successful sale at its true market value. Organizational Design Several key factors come into play when evaluating the organizational structure of your services business for a potential sale. First and foremost, the transition timeline regarding the owner's involvement is a critical consideration. Different buyers may have varying preferences regarding how long they expect the owner to stay in the business post-transaction. While some buyers may require the owner's presence for several years to ensure a smooth transition, others may only want a shorter period to observe a successful handover. Understanding and aligning these buyer preferences with your plans will facilitate a more harmonious negotiation process. The need for the owner’s involvement in day-to-day operations is a major aspect that impacts the transition timeline and valuation of the business. Buyers will assess the extent to which the business relies on the current owner for its daily operations. If the business is highly dependent on the owner's involvement, it can lengthen the transition timeline and potentially raise concerns for buyers. On the other hand, if the business has a capable and empowered leadership team in place, with individuals who can step up into more senior roles, it enhances the value and attractiveness of the business. A strong leadership team not only reduces the perceived risk for buyers but also indicates the potential for the business to thrive under new ownership. Moreover, the revenue-generating capabilities of your team plays a significant role in valuation. Buyers will assess the presence and effectiveness of sales representatives in winning new business. If the business has proactive and successful sales reps who consistently bring in revenue, it positively impacts the valuation. Conversely, if there is a lack of adequate sales representation, valuation suffers. Similarly, the quality and availability of skilled service technicians should be considered. The ability to attract and train new talent is crucial, demonstrating the business's capacity to grow and adapt. Additionally, whether service technicians are direct employees or subcontractors can influence the valuation, with direct employees typically commanding a higher valuation due to greater control and stability. Assessing the organizational structure of your services business is essential when preparing for a sale. By addressing these factors and positioning your business with capable leadership and revenue-generating mechanisms, you increase its appeal to potential buyers and pave the way for a successful transition. The Economy Understanding the state of the market and the overall economy is vital when considering the sale of your services business. Evaluating the sensitivity of your business to economic changes can provide valuable insights into its stability and future prospects. One aspect to consider is the relationship between your customers and the end markets they operate in. Assessing whether your customers' industries are more or less affected by economic fluctuations can help gauge the potential impact on your business's performance. Industries with higher sensitivity to economic changes may introduce greater volatility and risk to your business, potentially impacting valuation. Another vital factor to consider is the availability and cost of labor. Labor market conditions can have a direct influence on the operations and profitability of your business. Therefore, understanding the labor market dynamics, such as the availability of skilled workers and prevailing wage rates, is crucial for assessing the potential risks and opportunities associated with your business's labor requirements. Evaluating the broader economic outlook is also critical. An analysis of whether your end markets are expected to experience growth or decline can provide valuable insights for potential buyers. Buyers who perceive positive growth in your end markets place a higher valuation on your business. Conversely, if your end markets are anticipated to face challenges or decline, it may lead to a lower valuation due to perceived risks and limited growth potential. Furthermore, buyers want to see a track record of success. Therefore, if your business has experienced 3+ years of consistent growth the timing may be optimal- especially if the future looks grim. Unfortunate as it may be, even a single down year can influence a buyer to lower valuation or even walk away from the deal out of fear. By carefully considering the sensitivity of your business to economic changes, the characteristics of your customers' end markets, labor market conditions, and the overall economic outlook, you can provide potential buyers with a comprehensive understanding of your business's position within the broader market. This analysis enables buyers to assess the future prospects and potential risks associated with your business, ultimately allowing you to strike while the iron is hot. Personal Goals The business owner's personal goals play a profound role in the decision to sell a services business. One key consideration is the possibility of the next generation taking over the business. For owners with family members or individuals within their organization eager to assume ownership, the opportunity to pass the torch can hold significant sentimental value. The prospect of keeping the business within the family or ensuring continuity among dedicated team members can be a compelling reason to not pursue a sale at all. However, many owners do not have family in the business and would like to pass ownership on to a new entity who shares similar values. Equally important is the well-being of the people within the organization. Many business owners prioritize the protection and support of their employees during the transition process. Selling the business with the intention of preserving jobs, providing growth opportunities, and maintaining a positive work environment demonstrates a genuine concern for the team that has contributed to the business's success. Such considerations can generate a sense of loyalty and goodwill among potential buyers, further enhancing the business's appeal and value. It is also important to have candid conversations with potential buyers early on in the process to see alignment with your intentions are met before the deal is too far down the line. Another aspect that holds meaning for some business owners is the legacy of the name and reputation they have built over the years. A strong and respected brand carries intrinsic value, representing the hard work, integrity, and quality associated with the business. Preserving the legacy of the name becomes an essential objective, ensuring that the business's identity and positive standing in the market endures even after the ownership transition. Valuation expectations are a crucial element in the decision to sell a business. Every owner has a desired financial outcome from the sale, whether it is to fund retirement, pursue new ventures, or secure their family's future. Understanding the realistic value of the business and aligning it with personal expectations is a critical consideration. Owners must assess whether their valuation expectations are attainable in the current market or if further growth and strategic positioning are necessary to meet those goals. Ultimately, the personal goals of the business owner, encompassing the aspirations for the next generation, the well-being of the organization's people, the preservation of the business's legacy, and the desired financial outcome, shape the entire process of selling a services business. By integrating these personal goals with the broader considerations of the market, profitability, customer dynamics, and organizational structure, owners can make well-informed decisions that honor their legacy while ensuring a successful transition to new ownership. The Right Time to Sell To ensure a successful sale of your services business, taking action now is crucial. Evaluate the key factors discussed - performance of the business, market conditions, and personal goals. Assess your business objectively, identify areas for improvement, and implement strategic measures. Seek professional guidance if needed. By proactively addressing these factors, you can position your business for a successful sale that maximizes its value. Don't wait - start preparing for a lucrative exit strategy today.

A Young Adult's Guide to Rent a Comfortable Home: Understanding Building Materials and Insulation As a young adult or a college student, finding a comfortable and affordable place to live can be a challenge. I started renting life six years ago, living on the east coast, west coast, and the middle U.S. I have to admit that the experience was daunting at first, as I had few clues about what to examine and ask during the rental open house day. After moving in, I often wondered why my apartment was so cold after just a few hours after turning my heating off, and why I could always hear my neighbor's Netflix drama. During my internship experience at Sellside Group with Chirs Yount, an expert with building materials and waterproofing, I learned a lot about those materials used in my home and how they contribute to a more comfortable renting experience. This guide will give an overview of how the building materials and insulation affect the comfort of your home, and provide some tips on how to find a pleasant place to rent. Section 1: Building Materials The quality of building materials used in the construction of your home can greatly impact your ease level as they are the bones of your house. Some common building materials to consider include: Wood: Wood is a popular choice for building homes because it is renewable and has good insulation properties. However, it also needs good maintenance with products like a wood stain to protect itself from water damage or rot. Plywood: This is a type of synthetic wood that is made from recycled plastic with higher durability and requires low maintenance. But it must be used carefully as it has lower heat retention compared with natural wood. Drywall: This is more commonly seen in internal walls and ceilings. It is a flat panel made of a core of gypsum that is sandwiched between two layers of heavy paper or fiberglass. It is the economic choice but is not as waterproof or sound-insulated as real wood, and it is easily damaged or cracked. Concrete: Concrete is a durable and fire-resistant material, but it can be costly and has poor insulation properties. Brick: Brick is another durable and fire-resistant option, and it has good insulation properties. It brings a special aesthetic taste to the building. However, it can also be expensive. Section 2: Insulation Insulation is another essential factor to consider when looking for a relaxing place to live, especially when living in extreme weather locations. Insulation is the material used to reduce the flow of water, heat, sound, or electricity between spaces. Fiberglass: Fiberglass is a popular type of insulation because it is affordable and easy to install. However, it can be itchy and may require a professional to install it. Cellulose: Cellulose is an eco-friendly option that is made from recycled materials. It is effective at reducing noise and is resistant to fire. Spray Foam: Spray foam insulation is a popular choice because it creates an airtight seal, which can help reduce energy costs. Section 3: Other Factors to Consider In addition to building materials and insulation, there are other factors to consider. Windows: Look for homes with double-paned windows, which can help reduce noise and energy costs. Heating and Cooling: Consider the type of heating and cooling system used in your home. Look for homes with energy-efficient systems, which can help reduce energy costs. Remember to do maintenance or regular inspections of doors and windows, especially when you live in an area that experiences high levels of moisture or precipitation. When looking for a comfortable place to live, consider the building materials used in the construction of the home, and how the insulation is performed. Going inside the house and feeling it by yourself will be the optimal choice. Attend the open house, ask questions, and examine the materials and key facilities. Otherwise, you can ask the landlord or property manager about the materials used, and research the pros and cons of each in detail to ensure that your rented home is cozy and energy-efficient year-round.

While working at Sellside Group, I've gained a great deal of experience in the world of mergers and acquisitions (M&A). The practice is industry agnostic and can occur in any sector. Although M&A deals share similar objectives, each deal is unique. Several factors influence each deal, such as the companies' size, operations, owner's desires, and the economic landscape of the specific industry. Sellside Group's leadership team is truly exceptional. From our CEO, David Weiss, to our Managing Directors and M&A Director, Jake Kitka, they are dedicated to educating and empowering everyone on the team about M&A. Thanks to their guidance and support, I had the opportunity to play a critical role in a sell-side transaction for a commercial facilities maintenance client in the southeast United States. Working closely with the client and my colleagues, I was able to source a strategic buyer with a robust acquisition-based growth strategy. This transaction ultimately resulted in a successful transaction for our client, which played a key part in my finishing 2022 as the top revenue-generating intern. Here are a few valuable pieces that I learned about M&A: The M&A Process Many executives consider implementing an M&A strategy to either grow the value of their business or exit the company, but what exactly does the M&A process entail? Developing a Strategy The first piece of the process is developing an acquisition strategy by leadership within the business. While doing so, it is important first to consider the purpose of the transaction—is leadership looking to exit the company, are they seeking a capital infusion through an equity sale, are they positioning to enter a new market, or is the company aiming to offer new products or services? These are all things that need to be considered before testing the market. Valuation On the sell side, leadership should take action to make their company as attractive as possible to potential buyers. A few things they should do are make sure they can clearly articulate the company's culture and the management team's succession. Leadership should also prepare their current financial statements and make adjustments, such as adding back one-off costs or inflated owner salaries, to the EBITDA, as a multiple of the EBITDA is often used during the valuation process, among other tools. After current financials are in order, the company should generate pro forma financial statements to show a positive operating runway to potential buyers. It is also important to consider what type of deal the owner is willing to accept—do they want to stay on board with the company after the sale? Do they want an immediate exit from the company? Do they want an advisory role? How do they want their payout structured? All of these aspects can make or break a potential fit as they can each dramatically change the overall appeal of an offer and are particularly important for family businesses as this can add another level of stress to the process. There are many similar themes on the buy side compared to the sell side. Leadership should start the process by developing a strategy for the acquisition. Each strategy can look very different based on the company type and the acquisition's nature. For example, a private equity firm may be looking to build out their portfolio in a general industry but may not have the expertise or desire to step into the industry and help run the company, while on the other hand, a strategic buyer may be looking for a particular industry fit as they want to be involved in the day-to-day operations and steer the company in a specific direction. These differences greatly influence the offer structure the company desires to submit. They should also build a budget for the deal. While it is impossible to know the exact transaction cost in the early stages, the company should know how much they are willing to spend. This will allow them to narrow down the companies they are searching for and act quickly, as a company's EBITDA can give them a ballpark estimate of its valuation. Target Identification After the strategy is set, the search for potential targets begins. In this stage, privacy and secrecy are paramount as competition can gain useful insight, giving them a strategic advantage. To protect themselves, companies often hire 3rd party firms to represent the company and maintain anonymity while facilitating the search for a suitable target on either the buy or sell side. Typically, the 3rd party company can source and vet potential companies to buy or sell the client company to. During this process, meetings are held with the candidate's leadership and the 3rd party company to determine cultural fit. Once this has been established, the potential counter company will be provided with a non-disclosure agreement (NDA) and a confidential information memorandum (CIM), which conveys valuable information about the client company, such as customer concentration, notable vendors, financial statements, business structure, a market analysis, industry analysis, end market breakdowns, and other information to help determine if the company would be a good operational and strategic fit. A good CIM tells the story of a business and illustrates why it may be an attractive investment. Following the delivery of the CIM, it may be determined that a site visit is in order. Here, the 3rd party company can organize an in-person visit between the client and counter business so they can get to know each other and better understand how the company operates on a day-to-day basis. After the CIM is reviewed and meetings are held, the buying company will submit a letter of intent (LOI) outlining the purchase price, payout structure, and other terms the company agrees upon to close the deal. The entity receiving the LOI can negotiate the terms of each LOI and ultimately decide which they want to accept. Due Diligence & Closing Following the acceptance of an LOI, the purchasing company will go into the due diligence phase, where there is a thorough investigation and analysis of the target company that another company is considering purchasing to assess risks and opportunities and verify the accuracy of information provided. After carefully considering legal documents, financial statements, employee contracts, and customer and supplier relationships, the purchasing company can proceed with the acquisition and determine an appropriate valuation and terms for the transaction. Post-Merger Integration The final stage of an acquisition is commonly overlooked. Post-merger integration encompasses the integration of two or more companies involving each company's people, processes, cultures, and systems. Without proper integration, the acquisition is bound to fail as there is culture clash and inefficiencies across operations, which prevent the deal's potential value from being harnessed. Practical Experience: Finding the Right Buyer for a Sell-side Client I was part of the sell-side transaction for a commercial facilities maintenance client in the United States. The company I sourced, has an acquisition-oriented growth strategy. This type of strategy allows a company to quickly gain access to a new market by acquiring a business already operating in that market and allowing the company to quickly start providing services to the new market that otherwise would take years to implement competitively. These benefits can make an acquisition-based growth strategy more attractive to business leaders than an organic growth strategy. In this case, the company acquired our client and now has a strong presence in a new geographic region. While it may be capital-intensive upfront, the benefits to a company's top line and long-term strategic positioning outweigh the costs of tying up cash or onboarding additional debt. The Bottom Line As a business leader, you're tasked with taking all relevant factors of the environment into account and steering the business on a track of growth toward success. Each company has its path and a unique picture of what success looks like to them. The potential benefits of implementing an acquisition strategy are constant across nearly all companies. If performed successfully, an acquisition can allow a company to pivot and overtake competitors, and the transaction can become invaluable to the firm. While this strategy is not for everyone and may not work for every business, middle-market executives are responsible for learning about and considering how an acquisition or exit strategy could impact their business.

You have been led to believe Company Mission and Vision Statements will align and motivate employees, while also convincing your customer base you work for them. Unfortunately, the fill in the blank exercises you run through with key leaders often result in several “statements” that tug and pull employees and customers in multiple directions- leaving them with no sense of understanding the intended message. Bring a new sense of commitment to your organization by dumping the outdated practices, drilling down to the rationale behind your company’s existence, and developing a focused Purpose. Bring in the key leaders… Again Discovering a focused purpose will require the inclusion of your team. Now I know many are thinking the same thing, “But we have already done this over and over!”. Surely you have, but if your Mission and/or Vision simply describes your products or services with a final homage to customer service, there is still work to be done. To those operating with a mission like this, it is not your fault. This formula promised you a boost in employee morale, customers crawling to your feet and a magic lamp with a genie who grants three wishes. Fine, maybe not that last part. Nevertheless, you were guaranteed massive ROI. What you were not told is sessions used to create powerful statements, while simple in theory, are difficult in practice. If not guided properly, the discussion will quickly derail and meander down paths that do not reach your ultimate purpose. Guiding the discussion Maintaining structure while simultaneously fostering a space for creativity is a balancing act the finest circus performer would struggle with. Open ended questions followed by periods of response from participants is the key to encouraging engagement and free flowing ideas that work toward a goal. Listen, then prompt deeper and more holistic thinking. Motivate your team to search beyond a product or service, beyond customers, and all the way to why the world needs your company. Employee Buy-in Sorry to bear bad news, but plastering a mission statement on your website and in your break rooms will not increase employee nor customer engagement. Rather it is the process of discovering your purpose in a structured way with employees that will earn you their trust. Though these sessions may feel costly in the short term, they are a critical component to gaining employee buy-in to the company's purpose. After all, they are going to be the ones who define it. Therefore, it is their contribution that guarantees their buy-in. While your guiding of their thought process ensures that contribution is beneficial. Customer buy-in If your employees are sold, your customers will be too. They can sense when employees believe what they are doing is bigger than themselves. Your customers haven’t the time nor inclination to read your website like a book. On the contrary, they want to spend little effort yet be left with a sense that your company is committed to creating a large impact. The right purpose stated clearly leaves your customer base with feelings of missing out, a need to act quick and that doing business with you is the obvious choice they have just discovered. Break away from hollow mission statements that fail to motivate employees or convince customers. Hold a session or two that fosters an environment of inclusion for your team, and guide the ones who know your business best to a powerful purpose. With the right sentiment and motivated workers, customers will begin to notice you as the right choice. If done correctly, the next statement your company makes will be the last for generations to come.

The material handling equipment industry is a niche, complex and fast-growing sector, with many stakeholders involved in its planning, implementation and maintenance. With rapidly evolving technologies and demands, keeping up with all of the latest trends and findings becomes increasingly difficult. Based on my research and conversations with R.J. Safranek, Managing Director at SellSide Group, I aim to provide an overview of some major challenges and solutions facing the industry today. Status Quo There are a number of problems that can arise in the material handling equipment industry, including: Equipment costs. The cost of manufacturing and transporting products has risen over time, which means that customers are paying more for their goods. This is due to factors such as higher fuel prices, higher wages and insurance premiums for employees (which have increased due to health care reform). Higher costs have an adverse impact on EBITDA especially if you are a privately owned company with limited resources. Inflation and an unstable economy can create a challenging pricing environment for material handling companies. This can make it difficult for companies to price their services competitively and can lead to decreased profitability. Lack of skilled labour. With baby boomers retiring from the workforce in recent and coming years, there's been a shortage of skilled workers who can fill these positions--and this shortage will continue into 2030s due to demographic shifts in our country's population makeup (more older Americans) as well as technological advances like robotics replacing certain tasks previously performed by humans at work sites around the world today! Labour costs are a significant challenge for many material handling companies. Skilled workers are often in short supply, and companies may struggle to attract and retain qualified employees. This can lead to increased costs for training and turnover, as well as potential delays in completing projects. The rise of e-commerce has put significant pressure on this industry. Customers increasingly expect quick and immediate delivery of their orders, which can be challenging for material handling companies to accommodate. Additionally, trucking challenges such as driver shortages and rising fuel costs can make it difficult to transport goods efficiently. Alternatives Automation technology. The use of automation in material handling equipment has been a major trend over the past decade, and it's expected to continue growing as companies look for ways to improve efficiency, reduce costs and combat a diminishing labour pool. The advantages of automation include: increased efficiency - automated systems can move materials faster and more precisely than human workers can; reduced labour costs - automated systems don't require salaries or benefits, so they're cheaper than hiring people. By embracing new technologies like AMRs, AGVs, and robotics, companies can improve efficiency, reduce errors, and stay competitive in an increasingly challenging market: AMRs, or autonomous mobile robots, are becoming increasingly popular in the material handling industry. The main difference between an AGV (automated guided vehicle) and an AMR is that AMRs use free navigation by means of sensors or lasers, while AGVs are located with fixed elements such as magnetic tapes, magnets, or beacons. This means that AMRs are more flexible and can adapt to changing environments more easily than AGVs. AMRs can be used for a variety of tasks, from transporting materials to performing inventory checks. AGVs have been around for a while and are still used in many material handling applications. These vehicles are programmed to follow a specific path and can be used to transport materials throughout a facility. They are often used in manufacturing plants and warehouses to move materials between different stages of production. Robotics are also becoming more common in material handling applications, particularly in picking applications. Companies like Locus Robotics are using robots to help workers pick items more efficiently and accurately. These robots are equipped with sensors and cameras that allow them to navigate through a facility and locate items using barcode scanning or other technologies. By automating the picking process, companies can reduce errors and improve efficiency, ultimately leading to cost savings and improved customer satisfaction. Good to Picker solutions. Goods-to-person (GTP) solutions are a modern order fulfilment approach that combines automated storage and retrieval with precise, ergonomic selection methods. Some benefits include: Goods to Picker solutions can increase efficiency and accuracy of the picking process by eliminating wasteful walk time and offering accurate inventory and pick data. This can lead to a reduction in order errors and an increase in operational uptime, as well as improve overall customer experience. Goods to Picker solutions are easily scalable to match growing demand or an increase in SKUs, and can be integrated with other automation technologies and warehouse software for even greater efficiencies. This can help businesses optimize space utilization for a small footprint and flexible layout, and easily increase capacity by adding robots, modules, or workstations with little to no downtime. Warehouse Management Software solutions. Understanding the benefits of a warehouse management system is critical for growing firms. A warehouse management system can tremendously help growing enterprises with on-hand goods (WMS). By monitoring work processes at multiple levels, boosting productivity, and increasing asset utilization, the WMS will improve their operational efficiency for both labour and physical space. Implementing a WMS can help businesses streamline their warehouse operations, reduce inventory carrying costs, and improve customer satisfaction. With a WMS, businesses can automate and optimize many warehouse processes, including inventory tracking, order fulfilment, and shipping. WMS software can provide real-time visibility into inventory levels, order status, and warehouse operations, which can help businesses make data-driven decisions that improve efficiency and reduce costs. By having a better understanding of their warehouse operations, businesses can better allocate resources, optimize order picking, and improve overall warehouse performance. Final Thoughts The material handling equipment industry is constantly evolving, so it's important to stay on top of the latest trends. As you can see from this article, there are many issues that need to be addressed within this field. However, we have also seen some solutions that have been put into place and have helped improve the overall efficiency of how we store and transport products. As I continue my journey in further exploring this field, I will undoubtedly encounter more problems and solutions along the way! From A Student's Perspective

The recent collision of rapidly rising interest rates causing the banking sector meltdown is creating a Perfect Storm for Middle Market owner/operators. Interestingly, the flipside of this Perfect Storm may also offer the last best hope to sell a quality middle market company at fair value for some time to come. The Federal Reserve is charged with the dual mandate of stable prices (i.e., control inflation) and maximum employment. With recent inflation rising well above the Fed’s stated goal of 2%, starting in May 2022 they began rapidly raising interest rates. Although inflation is slowing, the action taken by the Fed had the adverse impact of creating a “run on the banks”. Silicon Valley Bank (SVB) may be the first bank to fail this time but we have not seen the end yet. The Fed, Treasury and FDIC quickly responded to the “systemic risk” posed by SVB but there remains uncertainly by depositors particularly with regards to local and regional banks. The net effect of the recent bank failures is putting enormous depository pressures on all local and regional institutions while they wait for new more rigorous regulation and capital requirements. There is already a steady “run” on the deposits of these institutions that will continue unless (and until) the Federal Government takes the bold step of providing a full guaranty of all deposits, regardless of size. Given the requirement that such a step will need strong bipartisan support in Congress this is unlikely to happen anytime soon. Taken together these factors do not bode well for middle market companies. A credit crunch and likely recession is looming. Any company that borrows money will see their operating profits squeezed as interest expense goes up. Middle Market companies, without access to the Commercial Paper market, rely heavily on local and regional banks for their working capital and other borrowing requirements. As these institutions respond to depository pressure, more stringent government regulation and higher capital requirements borrowers will face reduced credit availability, tighter borrowing restrictions, calls for greater capital contributions to their businesses and recessionary pressures. These same market dynamics adversely impact Private Equity firms, forcing them to pull back on purchase price multiples being offered for deals. Despite all these stress points the overall conditions suggest the current time may offer the best opportunity for middle market companies to move quickly towards a successful sales transaction. Interest rates are not likely to significantly fall in the near future. The shock to the banking system needs time to play out. In the interim middle market companies will be hard pressed to maintain operating profits without owners making significant capital contributions taking up the shortfall from the banks. There is a truism in finance that “Time is the enemy of all IRRs”. A strong case can be made to middle market business owners and Private Equity firms that Now is the Time to consider a sale of their company.

Perfect your elevator pitch. Research the interviewer. Practice your answers. Prepare challenging questions. Memorize the company’s mission statement. These are the first steps you’ll come across in a quick Google search for “Interview Tips.” Although such advice is essential for any interview, the real wow factor in any interview is you. Whether it be a case study, a pitch, or even just an in-depth behavioral interview, each firm has its own method for thoroughly interviewing a candidate. As a hiring manager, I have conducted what seems like hundreds of interviews, each evaluating a pre-prepared project that every candidate is free to develop however they choose. What candidates often misconstrue is that we are not evaluating how accurate their answers are but rather their ability to think through a problem and arrive at a solution. Thus, you can master the company’s purpose, list off an excellent pedigree of past experiences, or even have pi memorized; however, the crucial element of any interview are the so-called “soft skills” the candidate possesses. Being on the other side of the interview, I’ve seen firsthand that one’s process to getting to an answer is more important than the answer itself. The meaning and significance behind a previous role are more important than the job itself. One’s eloquence is more important than their ability to ramble off a list of questions or memorize a pitch. But most of all, I’ve witnessed that, for better or worse, how someone presents themselves on paper may be entirely different from the persona that they emulate in real life (or on Zoom). So next time you have an interview, stop and think about why you want the job itself and how you can let your personality and critical thinking skills shine.

The term “quiet quitting” basically didn’t exist until this past August. But now it’s everywhere and the definitions of the term and opinions on the topic vary widely. Is it really anything new? Isn’t it just a regular work shift? Are the quiet quitters the disengaged and slackers? Is it connected to burnout? Do they love their work but get their sense of purpose outside of work? Let's look at some data A 2019 Gallup Organization study found, before the pandemic, that: Only 18% of respondents were fully engaged at work Only 17% of respondents felt highly resilient at work Only 14% of respondents trusted their senior leaders and team leader In 2018, the Center for Disease Control reported that: 71% or adults had at least on symptom of workplace stress, such as headaches, or feeling overwhelmed or anxious In 2021, a quarter of the US workers quit their jobs – an historic high Deloitte survey of aged 18-38 found work-life balance to be the top priority and when choosing an employer, 75% preferred remote or hybrid environments Quiet Quitting - Our Definition It is NOT Doing the minimum Pretending to work Slaking off Mentally checked out Taking advantage of the company It IS Finding fulfillment without climbing the corporate ladder Loving your work Firm boundaries between work and personal life Limiting 24/7 connectivity Leaving work on-time Less emotionally invested Managing overachievement It’s Not New, But a Continuation of a Trend Discussion about work versus personal life have been around since the 1800’s. 1800’s – 16 hour days – Work/Sleep/Work 1900’s – 8 hour work day – Work/Recreation/Rest 1970’s – Work/Life Balance movement takes shape with more women entering the workforce 2000’s – Work/Life Integration with technology driving 20/7 connectivity 2020’s - Quiet Quitting - Life focus, fulfillment, and personal sense of worth outside of work It’s Good For Your Company Lower burnout, anxiety and stress Higher productivity Improved focus and better decision making Increased team engagement Improved thinking outside the box and innovation Improved well-being, happiness, and organizational trust Increased resilience to do the work and less likely to quit What Does This Mean For Leaders? Our workplace and workforce has changed. C-Suite boomers are retiring, and Gen X and Millennials are the next executive leaders. So let’s embrace the future! Foster A New Leader Mindset Today’s organizations need our help in fostering a different Mindset about work and employees We believe that employees are your greatest asset to deliver for your stakeholders. Talent is the engine that drives an organization When your team has affinity for their work – when they love what they do - they deliver amazing results, and this cultivates resilience; and resilience is so important in our work and life today Flexibility is – and will continue to be key – related to work schedules, locations. Let’s work to foster “balance”. Understand What Your People Value Each employee is a unique person with distinct loves, interests and skills. People in the SAME job do their work differently, so find their strengths. Marcus Buckingham calls this Love + Work and through his current research, has found that if employees are doing work they love, even if only 20% of the time – they are are more engaged and their level of resilience increases. Research by neurobiologists suggests that when “love chemicals” are released, you widen your perspective on yourself and liberate your mind to accept new thoughts and feelings. You remember details more vividly. You perform cognitive tasks faster and better.. You are more optimistic, more loyal, more forgiving, and more open to new information and experiences. One could say that doing what you love makes you more effective, but it’s so much more than that: You’re on fire without the burnout. Use the Gallup Q12 statements to talk with your people about what they value. For example: Was I excited to work every day last week Did I have a chance to use my strengths every day? My leader cares about my opinions Is Your Culture Aligned? Culture defined is shared values, attitudes, standards, beliefs and behaviors that guide our perceptions, judgments and actions. Align your leaders and managers to the organization’s new mindset – whatever it is for you and your organization – but be aligned and onboard. Set boundaries. For example: emphasize that answering after-hours calls or emails is optional introduce an on-call system, where necessary develop a way to mark messages as urgent and define the guidelines of what constitutes an appropriate after-hours emergency reward employees for staying late by allowing them to leave early another day intervene when coworkers pressure each other to overwork and create a way for staff to safely report this occurrence give employees random paid personal days Promote well –being as a value and part of setting boundaries Build Trust What is trust, why is it so important and how do we define trust? Here is one definition - A firm belief in the honesty, integrity, reliability, truth, ability, character, or strength of someone or something - to rely upon or place confidence in someone or something. A 2016 Global CEO Survey by PWC reveled that 50% of CEOs worldwide considered lack of trust to be a major threat to their organizational growth. From the ADP Research Institute study, they found that those who trusted their teammates, their team leader, and their senior leaders were 12 x as likely to be fully engaged and 42 x likely to be highly resilient. How to build trust? Recognize excellence Give employees a voice in their own job design Communicate often Intentionally build relationships Facilitate whole-person growth Show vulnerability Action For Leaders Now The ADP Research Institute and Marcus Buckingham's 2019 study provide some practical next steps. Here are four ideas for action: Organize Around Teams Their study found, that when people are organized around teams, they are 2 x more likely to be fully engaged. We’re not talking about team work, but organizing work through select teams. Today most organizations are not built around teams. Although plenty of teamwork is happening, leaders can’t see it or take advantage of it. Just look at most existing human-capital management software systems – they display individuals and who they report to, but not which teams they’re on. So what’s the difference between team work and organizing work around teams? An organization with a focus on teams institutes formal team joining discussions in which people learn why they were picked for their assignments. This introduction includes detailed descriptions of the skills and talents they bring to their teams and what they can rely on or turn to each teammate for Help them understand the WHY – the impact team’s work has on the organization – when this is understood, – motivation increases But the most important part of being on a team is developing trust with the individuals who constitute it. Make Weekly Check-ins Your Culture We all have done 1-1’s right? Did you know that organizations that build trust view a once-a-week check-in between employees and team leaders as the core human ritual at work. During this chat the team leader will not be checking up on or appraising the person or giving feedback. Instead, the leader will be talking about the short-term past and future, asking, “What did you love about last week?” “What did you loathe?” “What are your priorities this coming week?” “How can I best help?” According to Buckingham, Asking those four questions every week for an entire year will ensure that employees build trust with their team leaders. Invest In Your People Be creative! Think about what each employee values and offer both personal as well as career-oriented investment options. One way to get started is to use the Q12 for an investment framework. Other examples are Amazon which offers college tuition; Starbucks and UPS offer student loan reimbursement; and Google provides discretionary time off to pursue personal projects. ASK them! Give Recognition There is a ton of current research on the value of recognition and employee fulfillment which contribute to engagement and well-being. It is fitting that we include some ideas about recognition as part of the quiet quitter discussion. Recognition refers to praising, acknowledging or expressing gratitude to employees for who they are and what they do. We’re not talking about recognition programs. Workplace recognition often focuses on work output and work-related achievements, but let’s add human-centric milestones too – celebrating birthdays, weddings, birth of a child, and other personal accomplishments. Recognize individuals as well as teams. Public or private? Each employee is unique and values recognition differently. Here are some ideas: Fulfilling Give recognition a few times a week. This sounds like alot but it can be as simple as saying thank you in a team meeting or sending an email of thanks. Authentic Recognition becomes more meaningful when it is clear why it is being given. Telling employees how their work made an impact takes the words “good job” to a new level. Embedded in the Culture Simply having a recognition program is not enough. A culture of recognition is one in which gratitude, praise and appreciation are freely given, regularly received, and reach all corners of the organization. Where everyone feels empowered to take part in showing appreciation and commending achievements. Personalized ASK! What does your team appreciate? Some favor low key acknowledgment while others feel fulfilled through public recognition. Monetary? Time off? Special lunch?

As an intern at Sellside Group, I have gained invaluable experience in the consulting industry and the business world. I have also had the privilege to see firsthand the behind-the-scenes of what employers look for in their interns. As a college student, the ladder of the three is an essential tool to be able to fine tune our CVs and make ourselves more competitive on the job market. At Sellside, I have the opportunity to speak and work indirectly with an abundance of 35 seasoned executives, including Marinus Ferreira and Michael Burress, whom I both want to thank for their continuous support and guidance. Because of the close contact I had with Marinus Ferreira when we worked together on Project New Roots, I decided to interview him with a student's perspective on his intriguing past to not only get to know my coworker better, but to learn from him. How have your childhood experiences carried onto your work today? Growing up in Secunda, a small town in South Africa named after Sasol's second extraction refinery plant (hence Secunda) to a hard-working family, Marinus gained a wealth of values. Integrity, honesty, and determination, he says, are the values which he still carries with him in the business world. In fact, in Marinus' household, failure was not an option if you have determination. You have extensive experience in the Petrochemical, Oil & Gas, Metals and minerals sectors. Do you believe your academic background helped you throughout your career, and do you believe that in today’s world, someone seeking employment in the Petrochemical, Oil & Gas, Metals and minerals sector should have such a background? Marinus learned the basics of accounting and finance in high school, which was enough to land him his first entry-level accounting job. While he doesn't necessarily believe that a degree is necessary, he places a strong emphasis on the importance of education and strong moral values. According to Marinus, having strong values like honesty, hard work, and respect, which he learned from his family, can take you far in life. He believes that even though these values may seem obvious, "common sense is not always that common," and stresses the importance of treating everyone with respect, regardless of their social status. To answer my first question, Marinus emphasized the importance of his gap year, which revealed his dislike for repetitiveness in a job such as accounting. He says, "Take chances, bet on yourself when the world won't bet on you. You must only convince yourself that you can make it (which is the biggest struggle)." For Marinus, risk-taking and determination are some of the most important attributes that a person should display, not necessarily a degree. New entrepreneurs lack confidence, he says. The main concept of starting a company shouldn't be about making money. If you find a job you love you will never work a day in your life. People start businesses for the wrong reasons. Always try your best, enjoy the experience and be willing to learn as there is always something to learn. In terms of landing an entry-level job, from a student's perspective, Marinus says that interviews should just be a conversation. Seek interest in what they're doing and if it starts being a conversation you are on the right path. The key, according to Marinus, is to have a positive attitude and a willingness to learn: "if I fail, I'll try better the next time". As an employer, accountability is the best thing in life to work with, so become accountable for your actions and learn from your mistakes. A hot topic for the new generations, when it comes to seeking jobs, is to find their passion. What got you into the staffing industry, and did you pick it up as a passion? Why did you choose the staffing industry. Marinus, who hails from South Africa, where unemployment is currently at 42%, knows firsthand the importance of taking whatever job opportunities are available. However, he also recognizes the satisfaction that comes with being able to provide employment to others and contribute to their ability to support their families. He sees this as a very fulfilling aspect of his job. For him, finding his passion was more of a journey than a goal. Marinus likes to follow the proverb, "We have two ears and one mouth so that we can listen twice as much as we speak", and only through listening can you learn more and inch towards finding a passion. Regarding Thusanyo Project Services, if you were to tell a recruiter what your leadership style is, what would it be? Lastly, what excites you the most about where Thusanyo Project Services company is heading? What are the biggest challenges you face during these times of high inflation and interest rates? The approach Marinus found most success with is "I'll employ you and leave you work". It is hard and inefficient to upskill and micromanage everyone within a company. If you are hired, you are expected to do the job. Instead, people must find their own way, and getting kicked in their pool is the best way to learn. You must allow people to make mistakes to learn, otherwise they will be stuck in the same place. A very exciting aspect about Thusanyo, says Marinus, is that we always have to evolve and show resilience. A recent example saw the company import labor into Bermuda due to high cost of capital caused by a recent increase in the minimum wage. In terms of the high interest rates, Marinus believes that Thusanyo has been able to deal with it in the past as interest rates are always high in South Africa. In fact, Marinus announced that "[Thusanyo] grew a lot this year, and we opened in the US, and very excited to bring in international niche and leadership". He firmly believes that the US recession will be a big opportunity for them, as less permanent employment means more temporary employment. It will be essential, in the coming months, to allow clients to understand their culture. Marinus wants to elevate and assist their clients.

By now I am sure you are aware U.S. workers are leaving their jobs at rates that have not been seen in decades. Therefore, I will not take time to discuss the 2 million workers who quit their jobs in April 2021 alone. Instead, I would rather discuss what makes employees happy, how to measure if yours are satisfied, and steps you can take to increase employee job satisfaction so you can hopefully maneuver around a problem many companies are facing. What Satisfies Employees? Numerous theories discuss the foundation of job satisfaction, but for sake of time, I will only reference a few that sum up the pack pretty well. For one to be satisfied with their job, basic needs must be met first. Clayton Alderfer refines Maslow's classic hierarchy of needs with ERG theory. In summary, for a person’s needs to be met they must be physiologically satisfied, maintain a sense of belonging, and truly feel as their full and actual self. This is an oversimplification, but you get the point and can read the work of smarter people than I if interested in the topic. The takeaway as it relates to the workplace is self-esteem and self-actualization are the purest forms of satisfaction, and for that to occur a person must be able to provide for themselves and feel as if they belong. Tending to basic needs is important because they make up half of what employees value and are referred to as extrinsic values- things like pay, job security, benefits, and status. On the other hand, employees also have intrinsic values. This side focuses more on the job itself. Employees want to be interested in what they do. They want to be challenged and have the ability to learn. Even more, workers do not want to be challenged for no reason, they want to be challenged because they are growing and doing impactful work. There are two sides to what employees value and each is important for job satisfaction. Herzberg’s two-factor theory shows how they work together. Notably, this theory challenges the common fallacy that if you pay workers more, they will be satisfied. Pay and benefits (extrinsic values) are only half the battle. Lots of pay and great benefits will simply leave employees not dissatisfied. For employees to be satisfied, their intrinsic values must also be addressed. However, this does not mean you can negate compensation because intrinsic values are not considered if employees cannot provide for themselves. Having employees who are satisfied with their jobs is important for more than just turnover rate. A company’s values are equal to the sum of their employees’ values, and nearly 70% of an employee’s satisfaction is determined by their work situation. Furthermore, satisfied employees have an increase in performance, take greater initiative, miss fewer days, and quit less often. With that, you can begin to understand that employees who are satisfied with their work will exude that satisfaction to customers, and employees who are not satisfied will do the same Are your Employees Satisfied? How can you determine if your employees are satisfied? One way is to use a weighted facet model where you ask a bunch of questions about each component of an employee’s job, put a weight on the questions most important to you, and measure where you stand. Sure, this is one way that may have some benefit in monstrous organizations, however, there are faults. Sending surveys like this alienates employees from management, creating a “them and us” dynamic. Second, there is an issue of not knowing whether or not employees have been honest in their responses, which leads to making the wrong adjustments. Overall, this method does not foster trust, and trust is king. I prefer an alternate approach, one that does build trust- be present in your workplace. For CEOs, VPs, Supervisors, and so on, the goal is the same- getting to know your team. The more you do this, the greater the trust, the greater the trust, the greater the honesty, the greater the honesty, the greater the understanding of your employees’ true level of satisfaction. Beyond removing the “us and them” dynamic, beyond knowing how your team feels about the company and their role in it, with great trust comes great knowledge of your organization. Trust this strong helps identify problems earlier and innovations sooner. Ways you can increase job satisfaction To begin, pay your employees and provide competitive benefits to satisfy their physiological needs and increase extrinsic motivation. No need to discuss that any further. Intrinsic motivation, on the other hand, is slightly more nuanced. Start with an assessment of how you have designed the positions within your company. The roles and responsibilities of positions that provide the greatest level of satisfaction allow employees to: use a variety of skills, be included in the creation of the product or service from start to finish, contribute in a meaningful way, have greater levels of autonomy and responsibility, and receive feedback on their performance from the outcome of the work. Having these five characteristics in place creates job enrichment through vertical job loading. Which is just a fancy way of saying you allow autonomy, challenge employees, and provide responsibility. Once meaningful roles are established, attention should be focused on leaders, and more importantly, leadership styles. Refrain from transactional leadership and develop transformational leaders across your organization. Transformational leaders treat each of their employees as an individual by addressing their unique needs. Transformational leaders inspire and motivate employees to be their best through positive reinforcement rather than punishing their failures. This approach goes beyond training skills for the short-term and develops traits that are felt across an organization for years to come. Be proactive in understanding what increases employee job satisfaction. Dedicate the time it takes to get to know your team and earn their trust. Build leaders who transform an organization rather than simply manage one. Your customers will benefit, your employees will become more involved, and your company will be better off for years to come.