One advice startups often get when developing a successful business is to think about the exit strategy from the early days. Admittedly, is not an easy thing to do as entrepreneurs focus on growth and the next phase in the life cycle of their venture. However, it is important to plan for that milestone even before the entrepreneurs embark on the financing path. Exits bring liquidity to the system, make it more dynamic and stimulate growth.

Venture Ideas @ EPFL asked in 2014 Swiss Start-up exits: Can we have more?.  One thing that both the M&A experts and entrepreneurs agreed was that taking business to the next level gets easier with a strategic corporate partner. The exit therefore has to be well prepared so that value creation is maximized for all stakeholders and that the growth can continue internationally.

WEF’s 2014 report on Europe’s Competitiveness – Fostering Innovation Driven Entrepreneurship offered a three phase life cycle model (Stand Up, Start Up, Scale Up). The cycle is conditioned by the individual factors (skills, attitudes and cultural framework) on one side and by the ecosystem factors represented by the regulatory and market framework as well as the network of support organisms such as advisers and partners on the other. Together they ensure a know-how transfer that creates opportunities for growth.

Source: WEF, 2014

This entrepreneurial life cycle turns into a loop stimulating serial entrepreneurship that is fostered by successful exits. Those serial entrepreneurs with multiple venture experience in turn become investors, role models and mentors themselves. They continue contributing to a more dynamic ecosystem and a more competitive economy altogether.

Pamela Dennis, a successful entrepreneur and adviser to Fortune 100 companies states in her recent book Exit Signs that 87% of small and mid-size businesses have no exit plan. This puts them at risk of being sidetracked or taken over at no terms of their own. Her advice to business owners is to focus on building the business into a saleable, attractive and well documented venture with a focus on building relationships with the potential strategic acquirers early in the business life cycle. This will, she says, allow them to be bought rather than having to sell when they decide the time is ripe.

Exit Accelerator is a grass-roots, not-for-profit association, with the aim to boost the Swiss start-up and SME ecosystem by promoting conversations about exits. We believe that exits are one of the important milestones in the life of a business. Companies grow and develop over multiple years, often with exits there is a change in leadership, and an opportunity appears for them to start building great new companies again. The money is recycled and reinvested in the startup ecosystem, creating jobs, and supporting other innovative ventures.

Entrepreneurs that lead their business to a successful exit have a story to tell that startups and more mature SMEs can learn from. Learning first hand from those who did it is second only to doing it yourself.  Exit Accelerator looks forward to open the stage to such conversations.

Already rented out your flat when you left on a vacation or stayed in someone else’s? Took a ride in stranger’s car or worked in a co-working place? If so, you were likely taking part in the sharing economy.

This new way to think the market place is there to stay for at least a little longer, so any traditional company should prepare to operate this altered framework. There are few things to keep in mind.

What is sharing economy and why does it matter?

A phenomenon that goes under names of access economy, peer-to-peer networks or the collaborative consumption represents an important shift in the way consumers are meeting their needs and the way companies are defining their value added.

We used to share trade and swap since the early days of the humanity. And now the sharing is back as a fast growing economic phenomenon. But the key difference that allows all this interaction is the digital interface. The consumer interacts directly with other private parties turned suppliers through an online platform.   This ‘platform capitalism’, facilitating the online economic meeting place between willing sellers and buyers, is resulting in some of the most staggering market capitalizations we have seen so far.

Beyond the names such as Uber or Airbnb that first come to mind, there are giants such as Etsy (crafts and vintage market), WeWork (shared workspaces),  Kickstarter (crowdfunding) or   Bla Bla Car (car sharing service).  And thousands of other app-driven market places for everything from jobs, knowledge, excess capacity or mobility and vacation, catering to consumers and businesses alike.

The growth of the sharing economy is set to quadruple in the next three years and reach EUR 100 billion as per the recent Deloitte report. So how will your company benefit from this massive trend? Or, indeed, prepare to compete in changing economic circumstances?

#1 Select the operating model that fits your business

 Understand what works and what not in the sector or the industry you operate.  If you are a retail business, you are probably present online for years now and digital is a part of your operating model.  Investing into one of the related peer-to-peer platforms or buying the one that is of particular interest may be the next logical step. The recent purchase of HomeAway by Expedia or Avis buying Zipcar are falling in that category.

If you are in machine building, the choices may seem different at first. But the questions remain:  How can you improve your customers’ experience? How are you designing, manufacturing or delivering the product to them? Is your existing business model still the only way to keep your customers happy?  Opening up the design process to the crowd like P&G’s Connect+Develop program or leasing the construction tools to the customer instead of selling them as Hilti does, can be an alternative. Caterpillar chose to partner with Yard Club, a platform that allows the heavy equipment peer-to-peer rental.

Embracing change before it leaves you behind remains the choice of the frontrunners.

 #2 Review your own resource usage

Company’s own resources tie up a lot of capital.  Many assets that companies own, from the office and the storage space, to manufacturing and transport equipment, remain underutilized. With security issues properly addressed, those assets should start generate revenue when opened for use to new partners. Be it a conference room or a spare desk rented through a platform such as ShareDesk, or a truck excess capacity shared through Cargomatic, the underused assets will be made to work.

#3 Select the competences that fit the need of the moment

40% of the workforce will be freelancing by 2020, according to recent predictions.   Economic downturn may have explained the starting point but now we see an increasing number of highly skilled contractors choosing to stay independent.  So when next looking for a specific expertise why not select it through a platform for highly skilled workforce such as Expert360.  Whether you are filling a part time, a full time or ad interim opening, the business preserves the flexibility of matching the evolving needs with the wide variety of competencies available at the freelancing marketplace.

#4 Take part in agenda setting for regulating the sharing industry

Staying in the game for the long term will mean to secure a predictable operating environment and the regulation in particular. In any industry that is being disrupted the regulator is the latecomer. But when the new rules arrive, things change for both the disruptor and the incumbent.

Those companies that are successful in sharing their vision on how that new space should be regulated will retain the first mover’s advantage. And the others will have to adapt.

Lausanne, Switzerland

Guest Speakers: Sanja Fabrio, Fredrik Karlström, Tracey Keys
Moderator: Tony Johnston from World Radio Switzerland

Courtesy: Executives International, more photos here.

Change is the continuous state of play for companies and individuals. The playing field, the roles and the players, all is changing. The change can often be daunting and sideline those who live and operate in the past.

Societal expectations of business are changing, with traditional institutions losing trust, even as regulators struggle to keep up with the changes around them. Regulation too changes at a constant pace, changing ways we operate and compete, produce, consume, plan, engage and who we partner with.

Come and share your views at the following event in Lausanne, Switzerland:

Executives International Panel discussion on Seizing change: Turning global trends into opportunities on Thursday April 30, 2015

In this panel discussion, we will take a look at some of the major trends reshaping the world today and their implications for us and our organizations; how the role of regulation and stakeholder management fits into this picture; and how the future of communications could impact our lives and work.

Embracing this new dynamics means abandoning the ways we are doing things, daring to drop the boxes altogether and accepting change as a way to work, live and think. Recognizing the opportunity and seizing change ahead of others often means success in business and in our individual lives.

Panelists will be:

Moderator: Tony Johnston from World Radio Switzerland

For more details and to register please visit: http://www.executives-int.ch/event/panel-discussion-seizing-change-turning-global-trends-into-opportunities/

We look forward to seeing you there!

After decades of deregulation companies from each and every industry are now facing reversing trends. Regulatory pressure, a direct consequence of crises, scandals, globalization and resource depletion, is on the rise across the board.  And it is, inevitably, taking its toll on corporate operations. So how can a company mitigate this operational risk and ensure a more predictable operating environment?  While there is no easy answer, a proactive and politically astute approach to stakeholder and issue management is already moving the needle.  

Regulatory oversight and scrutiny can delay a merger deal, lengthen time to market of a new and innovative product, increase the cost for company to remain compliant or reduce productivity. But regulation is here to stay and we had better learn how to deal with it. In the last 10 years (2004 – 2013) in the US alone the Code of Federal Regulations has increased by over 30,000 pages, three times more than in the decade earlier. Like “old” industries, new, innovative industries are facing the rising tide of regulation:  bitcoins, the internet, ‘Airbnb’, genome editing, 3D bioprinters… join the debate and brace for regulatory impact.

Weight of public opinion

Beyond governments and politicians, civil society has become one of the key stakeholders when it comes to regulation.  If we trust the recent YouGov internet opinion poll, more than two-thirds of the polled internet users believed that businesses would misbehave towards staff and consumers if there were no regulation.  In today’s interconnected world where any piece of news is available instantaneously, it doesn’t take much to perpetuate such views. With government institutions retreating from a number of regulatory activities and public functions, non-governmental organizations have progressively started to be more active in that space. NGOs have turned their attention toward the powerful private sector and have exercised the high level of public trust they enjoy to secure an important place in the process of crafting public policy.

Remember Greenpeace’s palm oil campaign that pointed finger at Nestlé in May 2010?  The company was put in the spotlight in spite of the fact that Nestlé’s share of consumption of global palm oil production was less than 1%. Daniela Montalto, an international forest campaigner with Geenpeace, said to The Economist with reference to the video from Greenpeace’s KitKat campaign, “We had been asking Nestlé to stop buying products from rainforest destruction for two years before we launched our campaign. Nestlé cracked within just two months because the overwhelming public response made the company listen.”  While Nestlé has reacted quickly and made significant progress to date in traceability of its supply chain and sustainable manufacturing certification, the campaign initially hit its reputation hard. Being one of the biggest food and beverage companies in the world made them an easy and visible target.

The regulatory response followed a year later:  In the EU, a new law on food information to consumers was adopted by the Council of the European Union on 29 September 2011. It requires explicit labelling of the types of vegetable oil used in food products. This means that manufacturers will no longer be able to include palm oil in their ingredients under the generic term ‘vegetable oil.’ With the attention that the palm oil campaign has attracted over the years, the new labeling might negatively impact EU palm oil consumption, warned the Dutch Board for Margarine, Fats and Oils representing the industry. Consumers are likely to scrutinize more the product labels and to be more sensitive to sustainability of this ingredient source.  The law comes into effect on 13 December 2014.

Proactive stakeholder engagement  – showing the way

Even when the company’s reaction to a crisis is prompt and measured, it is just that – a rapid reaction on a hot topic. Its effectiveness is limited as is the time to prepare it, to build meaningful bridges with key stakeholders and to weigh the impact of some strategic alternatives on the company’s business. The associated risks of reputational damage, lost business opportunities or immediate out-of-pocket costs are often high.

To mitigate these risks in today’s business environment, where regulatory pressures and public scrutiny are on the rise in all industries, a regular horizon-screening for the next potentially contentious issue alone will not do the job.  Business decisions need to be informed by the political and public policy environment.  Companies need to be reaching out to regulatory, social, academic and value chain stakeholders in a proactive and politically astute manner. Focus on common regulatory issues within the value chain not only amplifies the industry voice and broadens the reach, but also strengthens trust and cooperation among the value chain partners – and ultimately with customers and consumers. Government affairs officers need to be integrated into the C-suite and business units’ management teams and their input reflected in a long-term corporate strategy. The key government affairs skills and capabilities need to be built in-house to allow optimal issue management and continuity. A cross-departmental team focused on a regulatory issue will both offer a holistic impact analysis to relevant stakeholders and, once the regulation is adopted, reduce compliance costs through higher awareness of the requirements and their quicker integration in company’s business processes.

Overall, proactive stakeholder and issue management creates a more predictable operating environment, diminishes the risk of an unfavorable regulatory development and allows for early identification of upcoming opportunities. Spotting opportunity where others see risk is often a key to success.