How To Value Organizations In The Wake Of Technology Disruption
By Suzy Teele
On March 21, ASPIRE 2019 featured a luncheon panel discussion on “The Future of Work and Its Impact on M&A: How to Value Today’s Organizations in the Wake of Automation and Social Disruption.” As the moderator, I shared the dais with Buddy Flerl, executive chairman and CEO of RDX and founder of 21Ventures, Stephen Gurgovits, managing partner at Tecum Capital, and Petra Mitchell, president and CEO of Catalyst Connection.
A lively discussion ensued centered around three primary topics: the challenge of finding skilled workers for today’s highly automated environment, what investors should look for when evaluating companies and how involved investors should be in new technologies.
Takeaway No. 1 — The fast pace of automation requires investment by organizations to ensure a healthy workforce.
In many industries in the United States, organizations are struggling to find the right personnel. The changing nature of automation, coupled with relatively low unemployment, has made investing in existing employees an important initiative for many organizations. Here are some ways that they are making this investment:
- Taking advantage of digital training (online courses, virtual reality, etc.) to make skills training available anytime and anywhere.
- Collaborating with educational institutions to upskill current employees and build a pipeline of future skilled workers.
- Building standardized skill sets and employee engagement using certificate programs.
- Using apprenticeships.
- Expanding the candidate pool to hire for potential instead of perfect fit.
Takeaway No. 2 — Investors must carefully evaluate the commitment to continual workforce development when valuing organizations for investment or acquisition.
Given the above challenge, investors need to make workforce issues a key component of due diligence by asking the following questions:
- Is the organization investing in its current workforce?
- How is the organization preparing for its future workforce?
- When automation investments are made, does the organization ensure that its employees have the proper skills to maximize the investment?
- Given the pace of change, is the organization taking proper care to document their environment?
- Is the organization rewarding employees who thrive in the changing, automated environment?
Takeaway No. 3 — Automation is a global, competitive advantage and shouldn’t be ignored by leaders or investors.
Whether it’s robotics, artificial intelligence, machine learning, IOT (internet of things), RFID or other technologies, both leaders and investors need to recognize the importance of technology as a competitive advantage for any organization. Countries like Japan, Germany and China have become global powerhouses because of their broad commitment to technology. U.S. investors and leaders need to make the same commitment by looking for ways to leverage these technologies — most of which were invented in the U.S. — to maximize growth and profitability.
Suzy Teele is the head of marketing and communications for Advanced Robotics for Manufacturing, the nation’s leading collaborative in robotics and workforce innovation. Structured as a public-private partnership, ARM works with 200 member organizations to accelerate the advancement of transformative robotic technologies and education to increase U.S. global manufacturing competitiveness.