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Navigating Change Capital Management


Paul Warburg is President and CEO at Xenon arc, an innovative tech company seeking to revolutionize distribution in the chemical industry.

The past year saw the highest mergers and acquisitions activity in history, with more and more CEOs finding themselves transitioning in their roles to become stewards of change capital management. If deployed effectively, sustainable corporate and financial growth can be achieved — and just as importantly — so can the advancement of employees’ careers and personal development. Longer-term results can include better client experiences, sustained growth trajectories and an enduring organization that upholds and optimizes its core values.

But how do you invest change capital in the most judicious manner to ensure the organization doesn’t lose its innovative, competitive and differentiated edge? How do you create alignment when transitioning from an existing model and operating structure to new oversight and objectives? You need to switch your lens.

Switch the lens from a financial to a human focus.

In the business world, “capital” is most often used in parallel with a tangible asset or assets. Currency, inventory, intellectual property, etc., are all nouns associated with an identified monetizable value. As a former CFO, I am continuously learning to piece together plans leveraging these assets with qualitative, intangible assets such as cultural dynamics, team development, nonfinancial motivators and other aspects to drive strategic focus and desired outcomes as we build and grow a disruptive organization.

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As a steward of change capital management, the lens must shift from the transactional mindset of discounted cash flows, detail analysis and statistics to a forward-leaning perspective toward organizational behavior and development.

This requires patience. Cultural shifts impact all facets of business and must be handled methodically, pragmatically and in a disciplined manner to ensure limited disruption to growth and development. This doesn’t happen overnight; it evolves, taking days, months and even years.

Strategic planning must focus on the intangibles and friction points that will inevitably evolve over time — balancing the positive with risk mitigation — for sustainable success.

The genius is in the “how.”

For many, handling the “what” is more intuitive than considering the “how” of change capital management. Numbers are easy. Common sense can be hard.

Developing a list of needs is critical. Perhaps you need to build out your technology, expand your infrastructure, hire more strategic contributors and invest in more talent. But how will you execute? How will you achieve these goals while preserving the important attributes of the company culture that has enabled and driven growth? How do you make sure these upcoming changes and additions to the organization will be positive?

It starts with clear, focused and open communication, not spreadsheets and reports. Executive and senior leadership teams should be part of the deeper conversations about what’s in store for the upcoming year. No one should be surprised. Prepare teams early, and emphasize priorities while creating lofty goals to collaborate with new team members to build alignment and understand where the tactical change pieces are going to come into play.

Consider how you will mitigate risk and capitalize on anticipated outsized returns and career, personal and financial growth. For a “Big Bang” company innovation, the biggest piece is preserving the strongest elements that have enabled an innovation-first company culture. Because you are bringing new people to the table, you need to focus on ways to keep true to the core principles that have enabled success and bring them to the newly expanded table.

Numbers matter, but people count. Your “how” should be people-first for judicious change capital management.

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Create an enduring, evolutionary legacy.

As leaders, we strive to make things better. But are you making things better for now — or better for the future? I believe that thinking short-term short-changes an organization’s permanence. My tenure will come and go, but how can I create an enduring legacy that embraces evolution, progress, performance and value creation? I consider what’s best for the organization.

Change is inevitable. And we should embrace it. Creating a people-first culture and accepting change will create a sustainable future. With this mindset, your organization can thrive through change and continue to advance — while always aiming to advance your people.


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