As firms and businesses grow, making sure to maximize the value within is an important factor. Stern Value Management helps clients develop implementations and programs designed to maximize the value of the organization. Rather than developing from the top down, Stern Value Management believes that all employees have something to offer, regardless of their status. Chairman and CEO Joel Stern joined us to discuss how you can maximize the value of your business/firm. Here are three takeaways from our time with Joel Stern on Critical Mass Radio Show:
1. Look at your firm’s performance from a new angle. While on the show, Joel Stern discussed EVA - Economic Value Added - a formula developed by his company to measure a company’s performance and value creation, as well as show management how to prioritize on new investments. According to Stern Value Management’s website, “EVA measures the wealth a company creates (or destroys) each year. It is a company’s after-tax profit from operations minus a charge for the cost of all capital employed to produce those profits – not just the cost of debt, but the cost of equity as well.”
2. Size variables are not value variables. When it comes to your team, value does not necessarily correlate with the number of individuals working for your company. It is important to ensure that your team members are providing value, as demonstrated by return on investment. Actively choose value over size when it comes to your team, and create incentives that are based on improvements and added value.
3. View your team members as partners in creating value, not simply employees. Joel discussed his belief that every person has entrepreneurial energies, and that the ultimate goal should be for all team members to release those energies constructively. By doing so, team members will add value to your firm, regardless of their position in the company, acting as partners who are invested in the business, rather than just employees.
Listen to our full interview with Joel Stern here: