A complete
integration is
necessary for
success
integration is
necessary for
success
Merging with, or acquiring another business is much like a marriage. You each bring your own
utensils, bad habits and plethora of personal issues to the union. The trick is to find a way to upgrade
your spatulas (IT system), learn to put the cap back on the toothpaste (improve customer service) and
not let your brother-in-law con you out of your nest egg (personnel issues).
By the time that special day comes and both parties say, “I do” you should have everything ironed out.
That way you can go on your honeymoon and begin your long, loving life together as husband and
wife, or as the analogy lends itself to, wholly integrated as a profitable company completely prepared
for the challenges ahead.
As you acquire, you may rightly think of yourself as a brilliant business person. You outsmarted your
competition and now you may own them or plan to overtake market share with your new companion.
You and your financial wizards have looked at the bottom lines and decided how the capitalistic
marriage can be most profitable. Yet the #1 factor in acquisition failure is the inability to mesh the
cultures.
As ink is put to paper, consider that studies show over half of all companies lose market share in the
first quarter following acquisition, with 90% losing share in the third. Human due diligence is as
utensils, bad habits and plethora of personal issues to the union. The trick is to find a way to upgrade
your spatulas (IT system), learn to put the cap back on the toothpaste (improve customer service) and
not let your brother-in-law con you out of your nest egg (personnel issues).
By the time that special day comes and both parties say, “I do” you should have everything ironed out.
That way you can go on your honeymoon and begin your long, loving life together as husband and
wife, or as the analogy lends itself to, wholly integrated as a profitable company completely prepared
for the challenges ahead.
As you acquire, you may rightly think of yourself as a brilliant business person. You outsmarted your
competition and now you may own them or plan to overtake market share with your new companion.
You and your financial wizards have looked at the bottom lines and decided how the capitalistic
marriage can be most profitable. Yet the #1 factor in acquisition failure is the inability to mesh the
cultures.
As ink is put to paper, consider that studies show over half of all companies lose market share in the
first quarter following acquisition, with 90% losing share in the third. Human due diligence is as
| About Our Writer David Himmel is a freelance copywriter, journalist, and humorist. He has written for television, radio, film, Spin Magazine, Liberty Watch, Metromix.com, MGM MIRAGE and more. He can be reached at david@himmelink.com. |
important as the financials in the pre-acquisition stage and remains a critical success factor throughout the integration process.
Companies spent years creating their own cultures, each with a people, a style all its own, and it's hard to convert a believer. What
cannot be staved off iscreating a compatible structure of management styles, personalities, behaviors, beliefs, values and
attitudes of the parties--a process that is usually nonexistent or misinterpreted during the heat of the deal. Like your marriage, you
don’t want to spend the honeymoon getting to know one another – you want to get down to business.
So work quickly and work smart. The longer it takes to integrate beyond organizational hardware, the more your market share can
slip and money be lost. Before you know it, your beautiful relationship is ruined and you’re longing for your single days.
Contact Blueberry Business Group today for a nonpartisan action plan that stages and facilitates pre or post-acquisition
integration, including assessing areas of low, medium and high integration while minimizing cultural gap impact.
Companies spent years creating their own cultures, each with a people, a style all its own, and it's hard to convert a believer. What
cannot be staved off iscreating a compatible structure of management styles, personalities, behaviors, beliefs, values and
attitudes of the parties--a process that is usually nonexistent or misinterpreted during the heat of the deal. Like your marriage, you
don’t want to spend the honeymoon getting to know one another – you want to get down to business.
So work quickly and work smart. The longer it takes to integrate beyond organizational hardware, the more your market share can
slip and money be lost. Before you know it, your beautiful relationship is ruined and you’re longing for your single days.
Contact Blueberry Business Group today for a nonpartisan action plan that stages and facilitates pre or post-acquisition
integration, including assessing areas of low, medium and high integration while minimizing cultural gap impact.
Many organizations fail to see the connection - and need - between their business blueprints (models of their business processes)
and successfully running that business. Business process models are (or should be), after all, a graphical representation of your
business from soup to nuts.
Before you decide to rush out and start modeling, keep in mind that some business processes tend to be more ‘special’ than
others. How come? All organizations have two types of processes: Core and Content. Professor August-Wilhelm Scheer defines
a Core process as “a company’s essential value-adding [set of] processes. These are the operational expressions of corporate
strategy. If the strategy is one of price leadership, core processes will be geared toward cost minimization. If high service quality is
the strategy, the focus will be on smooth operation and ongoing optimization of all processes with customer touch points.” Scheer
also notes that Content processes occupy supporting activities, such as Finance, IT or HR processes.
Core business processes are unique to an organization, just like a fingerprint or DNA is to a person. These processes set an
organization apart from its competition. Depending on how successful Core business processes are executed determines
whether an organization will be a leader or just another ‘also ran’. Therefore, 'Continued investment in Core business processes is
essential to retain existing customers and acquire new ones”, alerts Scheer.
Senior executives feel compelled to take swift action in times like these. One of the most common activities is to lay off a certain
percentage of the work force. Anyone who has read Peter Senge’s The Fifth Discipline knows the folly of making quick decisions
without understanding the full extent and impact on the organization.
Resist the desire to make tweaks to highly complex, volatile environments. Be rest assured, if you begin to mess with your
company’s Core business processes (your very competitive advantage / edge), you face the risk of rocking your customers’ boat,
who will quickly jump ship, further worsening your financial woes! If you are a senior executive who has to takes steps to ‘shore up
the dykes’ and are considering making dramatic changes, you need to know exactly what to cut and the business ramifications of
doing so.
Building a sustainable competitive advantage now requires that we:
1. Reevaluate (and refine if necessary) your business strategy, goals and objectives.
2. Formulate a robust, holistic set of your Core business processes with appropriate measures.
3. Establish a clear Governance structure outlining explicit accountabilities.
4. Create variants of the affected Core processes and simulate these until you achieve your financial objectives.
5. Execute your new strategy by implementing your best performing scenario/s of your Core business processes.
By doing so you not only know exactly how to meet your economic objectives, but also have full confidence that the necessary
changes (i.e.: cuts in staff and/or operations etc.) are made without negatively impacting your customers’ experience, and key
resources are still in place ready for that inevitable uptick in business. This is how creating and preserving a sustainable
competitive advantage in today’s uncompromising business environment can be achieved.
and successfully running that business. Business process models are (or should be), after all, a graphical representation of your
business from soup to nuts.
Before you decide to rush out and start modeling, keep in mind that some business processes tend to be more ‘special’ than
others. How come? All organizations have two types of processes: Core and Content. Professor August-Wilhelm Scheer defines
a Core process as “a company’s essential value-adding [set of] processes. These are the operational expressions of corporate
strategy. If the strategy is one of price leadership, core processes will be geared toward cost minimization. If high service quality is
the strategy, the focus will be on smooth operation and ongoing optimization of all processes with customer touch points.” Scheer
also notes that Content processes occupy supporting activities, such as Finance, IT or HR processes.
Core business processes are unique to an organization, just like a fingerprint or DNA is to a person. These processes set an
organization apart from its competition. Depending on how successful Core business processes are executed determines
whether an organization will be a leader or just another ‘also ran’. Therefore, 'Continued investment in Core business processes is
essential to retain existing customers and acquire new ones”, alerts Scheer.
Senior executives feel compelled to take swift action in times like these. One of the most common activities is to lay off a certain
percentage of the work force. Anyone who has read Peter Senge’s The Fifth Discipline knows the folly of making quick decisions
without understanding the full extent and impact on the organization.
Resist the desire to make tweaks to highly complex, volatile environments. Be rest assured, if you begin to mess with your
company’s Core business processes (your very competitive advantage / edge), you face the risk of rocking your customers’ boat,
who will quickly jump ship, further worsening your financial woes! If you are a senior executive who has to takes steps to ‘shore up
the dykes’ and are considering making dramatic changes, you need to know exactly what to cut and the business ramifications of
doing so.
Building a sustainable competitive advantage now requires that we:
1. Reevaluate (and refine if necessary) your business strategy, goals and objectives.
2. Formulate a robust, holistic set of your Core business processes with appropriate measures.
3. Establish a clear Governance structure outlining explicit accountabilities.
4. Create variants of the affected Core processes and simulate these until you achieve your financial objectives.
5. Execute your new strategy by implementing your best performing scenario/s of your Core business processes.
By doing so you not only know exactly how to meet your economic objectives, but also have full confidence that the necessary
changes (i.e.: cuts in staff and/or operations etc.) are made without negatively impacting your customers’ experience, and key
resources are still in place ready for that inevitable uptick in business. This is how creating and preserving a sustainable
competitive advantage in today’s uncompromising business environment can be achieved.
Summer 2009
Talking Blue
| Food Industry Specialists |
 | |  | |  | |  | |  | |  | |  | |  | |  |
Competitive advantage is not something that suddenly comes about, but rather is a product of
skillful analysis of the target market, resulting in the formulation and implementation of an effective
strategy, including supporting goals, and key performance indicators. This is primarily achieved by
creating and/or adjusting pertinent business processes and instituting an effective governance
structure. In other words, leaders tell their organization what to do and how to do it, and then
institute practical mechanisms to measure how such processes perform, proactively rewarding
success and identifying breakdowns.
skillful analysis of the target market, resulting in the formulation and implementation of an effective
strategy, including supporting goals, and key performance indicators. This is primarily achieved by
creating and/or adjusting pertinent business processes and instituting an effective governance
structure. In other words, leaders tell their organization what to do and how to do it, and then
institute practical mechanisms to measure how such processes perform, proactively rewarding
success and identifying breakdowns.
Your Competitive Advantage:
Gaining or Waning?
Gaining or Waning?
Wholly Matrimony
When the economy
turns, you cannot
afford to find your
organization
hamstrung due to poor
decision making now.
turns, you cannot
afford to find your
organization
hamstrung due to poor
decision making now.
The answer to why some companies flourish in times of economic famine while
others struggle to survive in times of plenty boils down to one simple fact:
Winners manage to carve out and maintain a competitive advantage over their
competitors.
others struggle to survive in times of plenty boils down to one simple fact:
Winners manage to carve out and maintain a competitive advantage over their
competitors.
Winter 2009/2010