Our industry is facing major regulatory changes that we cannot control, and buyers are using this uncertainty to discount our valuation. How do we use Keith Cunningham's framing to separate this environmental predicament from our actual operational problems?

Question

Tyler Smith · Accepted Answer

When you go to market, buyers will leverage any external instability to force a lower valuation. It is vital to separate what Keith Cunningham calls a predicament from a problem. A predicament is an environmental reality that you cannot change, such as federal regulations or macroeconomic shifts. A problem is an operational challenge that you can actively solve with the right strategy and resources.

Do not waste valuable time and energy trying to fix the regulatory environment itself. That is a predicament. Instead, focus your leadership team on solving the internal problems caused by that predicament.

Use your weekly Level 10 Meeting and the IDS process to identify how you can adapt your service delivery to comply with the new regulations more efficiently than your competitors. Use structured Thinking Time to design solutions that turn this industry shift into a competitive advantage.

When negotiating with buyers, do not get defensive about the industry changes. Present the regulatory shift as a known predicament, and then demonstrate your highly systematic, documented response to it. Show the buyer how your proprietary compliance processes shield your margins. If you can prove that your team has systematized the solution to this industry-wide predicament, you will transform a valuation discount into a premium.