Traditionally business growth developed organically over the longer term as a company improved its operations and market penetration from year to year. A merger can seem an attractive strategy for leapfrogging into new markets instantly and for a fraction of the trouble involved with growing organically but, in fact, more than 50 percent of all mergers are considered a failure.
Studies of successful mergers suggest a number of areas in which things must go right.
Strategic Fit
The impetus for a merger should emerge naturally from the overall business strategy so that there is a clear vision of how the entities in combination will be better able to increase revenues and gain market share than either could on its own.
A merger without a sound strategic rationale is akin to impulse buying and just as likely to result in the acquisition of something that isn’t really needed or can’t deliver increased competitive advantage.
Establishing strategic compatibility requires a thorough due diligence to establish the internal strengths and weaknesses of the target company as well as the opportunities it will allow. Anything that could present problems further down the line, such as dealing with relocations and layoffs, compensation changes, hardware and software compatibility or the consequences of an unresolved lawsuit, should be considered.
Rapid Integration
There is general agreement that the earlier the integration program gets underway the better the end results. Planning the integration should begin as early as the merger comes up for consideration and integration issues should be considered in the due diligence process.
Before closure, all major integration decisions should have been made at least in principle. For instance, what the new organization structure will be, which product lines will continue and which be terminated, which/whose business processes and IT systems will be adopted as company standard.
Integration decisions are best made, when possible, by joint teams who can bring full information on the capabilities of their respective company’s systems and process to the table. Rather than spending time in an attempt to design the perfect business process or system, it has proved equally effective to choose the best aspects of each organization as the standard for the merged company. Company A may have the best IT system; company B the better customer service protocol. Adopting the best each company has to offer speeds integration and retains the practices that have delivered superior performance in the past.
Maintain Focus On Doing Business
Where integration issues haven’t been adequately addressed before the merger and there are delays in setting up systems, it’s possible for the new entity to lose its focus on doing business. Employees are diverted from their core roles of driving sales and maintaining customer service to tasks around integrating business processes, IT systems, and product lines. The business loses contact with its customers and impetus in its marketing and sales activities.
Customer defection follows and the merger starts to bleed.
The difference between success and failure can turn on the ability to remain focused on doing business throughout the merger process. Pre-merger planning and post-merger allocation of integration tasks must work to ensure that customer-facing employees retain the time necessary to continue their customer acquisition and sales work.
Communicate Continuously
Communication, early and often, to customers, employees, partners, and other stakeholders is integral to managing a merger. Part of the strategic positioning of the new entity should involve developing messages around why the merger is taking place, what it is expected to achieve for the company and what’s in it for customers and employees.
Address Human & Cultural Issues
Mergers mean uncertainty for employees. Layoffs and redeployment or re-grading are a frequent adjunct of the process. And uncertainty translates into decreased productivity. It’s estimated that the majority of mergers fall short of their objectives because management has become bogged down with finance and technology issues and failed to spend sufficient time integrating corporate cultures and management styles. Senior managers involved in mergers regularly identify talent retention as one of their biggest challenges.
Cultural fit should not be underestimated. One of the most costly merger failures was the 1994 acquisition of WordPerfect by Novell. After just two years and numerous troubles, central to which was a colossal culture clash (the two firms disagreed on everything from decision making to customer service) Novell sold WordPerfect for about $1 billion less than it paid
Leads Only Have Value If They’re Managed
/in Sales /by Wayne MoloneyBut that doesn’t mean these leads have any real value. They have to be contacted, made an offer, and usually followed-up several times before they can be sold and converted into customers. This is a time-consuming and often expensive process, and it’s where most businesses get it wrong.
A lead is really just raw material, waiting to be turned into something of value. This value-add requires careful management, from the moment the lead is acquired until finally the sale is made and a new customer joins the database. Like any other industrial process that converts raw material into a finished product, lead management can be viewed as a series of steps that, when followed, will yield the desired results.
Leads are like raw materials in another important way – don’t do anything with them and they’ll just stay as they are, unprocessed commodities with no real value to your business. If you’ve bought a list of leads and don’t manage them correctly your results will be predictable and expensive.
There are many lead management software applications on the market and as you’d expect, some are better than others. Some are suited to smaller businesses and others cater to the needs of larger firms. We’ll just say that having a lead management system that incorporates one of these applications is always a good idea.
Modern lead management systems are a combination of people, software and processes that work together to acquire, manage and convert leads into sales. Lead management isn’t just having a team of salespeople that prospects and sells, although selling is an essential part of the process.
If your business already has a lead management system in place that doesn’t depend on a software application you may want to consider acquiring a program that’s compatible with your firm’s system. If you don’t have a lead management system but want to design one, here’s a way of going about it.
What is the sales process in your business?
How is selling carried out in your company? Are your products sold directly to purchasers or through a dealer network? Do you use agents? You need a clear understanding of the sales process now happening in your business including the people and processes involved. Which channels work best and which deliver the greatest profits?
You also need to identify responsibilities within the sales process – not just who does what, but who is in charge of the process. If you have multiple selling channels prepare an outline for each one. It’s important that everyone in the sales process is accountable for their achievements.
How are leads managed now?
Whether formal or informal, your business will have a lead management system of some kind, even if it’s just a database on the sale manager’s PC. Document the way in which your company manages leads from the time they enter the business until the time they’re either converted to a sale or abandoned.
Review this process to identify the trail of leads through your business. As you did with the sales process, identify responsibilities for everyone involved with handling and managing leads.
How do you create leads?
List your current sources of leads. Some will be purchased and others acquired through your own lead-generation activities. Leads are the ‘input’ into any lead management system and their sources need to be accommodated by the processes your business uses to deal with them.
Brainstorm what you’ve found
This is the fun part. You’ve documented what’s already been happening with sales and with leads; now comes the time to review it with everyone involved in the process.
Just by reviewing the processes now in use you’ll have identified several weak points or places where leads are being mishandled or not handled at all. Go through every step in your selling and lead management procedures and iron out the rough spots. Build on successes and get rid of the failures.
It’s most important that you identify any places where leads can be lost or drop out of the system. This is often the case when the next ‘trigger’ in managing leads depends on some sort of feedback from the prospect. They don’t always respond like they’re supposed to.
What you’ll end up with is a system with which you’re already familiar, but now it’s been ‘repaired’ and will work a lot better than it has before. Take this system to a specialist in lead management and look for the right application to bring into your business to help you get the most out of every lead.
Planning a Successful Merger
/in Business Strategy /by Wayne MoloneyTraditionally business growth developed organically over the longer term as a company improved its operations and market penetration from year to year. A merger can seem an attractive strategy for leapfrogging into new markets instantly and for a fraction of the trouble involved with growing organically but, in fact, more than 50 percent of all mergers are considered a failure.
Studies of successful mergers suggest a number of areas in which things must go right.
Strategic Fit
The impetus for a merger should emerge naturally from the overall business strategy so that there is a clear vision of how the entities in combination will be better able to increase revenues and gain market share than either could on its own.
A merger without a sound strategic rationale is akin to impulse buying and just as likely to result in the acquisition of something that isn’t really needed or can’t deliver increased competitive advantage.
Establishing strategic compatibility requires a thorough due diligence to establish the internal strengths and weaknesses of the target company as well as the opportunities it will allow. Anything that could present problems further down the line, such as dealing with relocations and layoffs, compensation changes, hardware and software compatibility or the consequences of an unresolved lawsuit, should be considered.
Rapid Integration
There is general agreement that the earlier the integration program gets underway the better the end results. Planning the integration should begin as early as the merger comes up for consideration and integration issues should be considered in the due diligence process.
Before closure, all major integration decisions should have been made at least in principle. For instance, what the new organization structure will be, which product lines will continue and which be terminated, which/whose business processes and IT systems will be adopted as company standard.
Integration decisions are best made, when possible, by joint teams who can bring full information on the capabilities of their respective company’s systems and process to the table. Rather than spending time in an attempt to design the perfect business process or system, it has proved equally effective to choose the best aspects of each organization as the standard for the merged company. Company A may have the best IT system; company B the better customer service protocol. Adopting the best each company has to offer speeds integration and retains the practices that have delivered superior performance in the past.
Maintain Focus On Doing Business
Where integration issues haven’t been adequately addressed before the merger and there are delays in setting up systems, it’s possible for the new entity to lose its focus on doing business. Employees are diverted from their core roles of driving sales and maintaining customer service to tasks around integrating business processes, IT systems, and product lines. The business loses contact with its customers and impetus in its marketing and sales activities.
Customer defection follows and the merger starts to bleed.
The difference between success and failure can turn on the ability to remain focused on doing business throughout the merger process. Pre-merger planning and post-merger allocation of integration tasks must work to ensure that customer-facing employees retain the time necessary to continue their customer acquisition and sales work.
Communicate Continuously
Communication, early and often, to customers, employees, partners, and other stakeholders is integral to managing a merger. Part of the strategic positioning of the new entity should involve developing messages around why the merger is taking place, what it is expected to achieve for the company and what’s in it for customers and employees.
Address Human & Cultural Issues
Mergers mean uncertainty for employees. Layoffs and redeployment or re-grading are a frequent adjunct of the process. And uncertainty translates into decreased productivity. It’s estimated that the majority of mergers fall short of their objectives because management has become bogged down with finance and technology issues and failed to spend sufficient time integrating corporate cultures and management styles. Senior managers involved in mergers regularly identify talent retention as one of their biggest challenges.
Cultural fit should not be underestimated. One of the most costly merger failures was the 1994 acquisition of WordPerfect by Novell. After just two years and numerous troubles, central to which was a colossal culture clash (the two firms disagreed on everything from decision making to customer service) Novell sold WordPerfect for about $1 billion less than it paid
Employee Incentives
/in Human Resources /by Eric de DiesbachOne of the most efficient ways to achieve this is to introduce an incentive that would motivate them by the prospect of a reward if they and the business perform well.
An employee incentive plan aims at increasing employee productivity and therefore profits for the company (financial objective), or aims at giving back to them (a well being, non-financial objective such as job satisfaction), or both. Read more →
Greenhouse “sceptics” benefit from knowing their footprint
/in Process Improvement /by Wayne MoloneyWith the demise of the Emissions Trading Scheme, a lot of businesses are uncertain of what they should be doing/need to do with respect to carbon emissions. Senior Consultant Michael du Plessis and I have been working with one business which is not asking questions, but taking action. This leader in carbon neutral printing has been building their business in a sustainable manner for some years and surprising as it may seem, they see opportunities to reduce carbon as a way to improve their profitability.
One question we hear often in discussios with business managers and owners is – “If I don’t have to report on greenhouse gas (GHG) emissions, why would I be interested, specially in knowing my carbon footprint?” A very valid question, and one I have asked being a bit of a sceptic when it comes to global warming and the impact of carbon dioxide (CO2).
Well even if the sketics are right and GHG emissions were not causing global warming, if it becomes the catalyst for us to further cut down on waste and reduce pollution, it couldn’t be all bad. To quote Warren Buffett, “I believe the odds are good that global warming is serious…. If you have to make a mistake, err on the side of the planet. Build a margin of safety to take care of the only planet we have.”
While most businesses in Australia do not have to report on their GHG emissions, and more importantly, those that do only have to report on what is generated as a direct result of their manufacturing processes (this is known as Scope 1 & 2, not Scope 3 which refers to their supply chain), why would they be interested in knowing their carbon footprint?
We have discovered that many organisations that undertake a review of the environmental impact of their business operations come up with new ideas that can improve productivity and their bottom line. Often they are surprised that the environmental review comes up with ideas that they may not have considered before. For our client, we agreed to do a high level carbon footprint “snapshot”. What we discovered was that most of his carbon was generated by raw materials he bought in, not his actual manufacturing processes. He also discovered that the “carbon neutral” claims being made by his major competitor were at best, questionable.
From this high level snapshot we were able to determine that:
It’s true that not all organisations are under immediate pressure to measure their carbon footprint, however we are discovering that those looking at sustainability from an environmental perpective, are not just doing the right thing by our environment, but are also reaping commercial benefits of a more sustainable business.
To learn more about how being more “green” can benefit your business, give us a call.
What Makes a Good Salesperson?
/in Sales /by Wayne MoloneyThe following comes from professional motivational speaker, US based Dirk Beverige. Here are his top 11 top sales person separators:
Clearly Defined Expectations
Is everyone under your leadership on the “same page,” or is someone marching to a different drummer? Improved productivity and performance require the clear communication of expectations. Our sales representatives should:
Know their roles and responsibilities — what they should and should not do. For example, they should let customer service representatives service while they themselves focus on consistently executing the sales function.
Understand the desired end game – what they must accomplish.
Work toward set goals and use those goals to measure their performance.
Planning
Planning and organization at the territory level are critical to sales success. Each sales representative must develop and execute a strategy that proactively addresses the dynamics and changes in his territory. Effective planning means establishing clear objectives and organizing specific sales activities into integrated yearly, quarterly, monthly, weekly and daily work plans. The sales representative should:
Develop a plan for maximizing the territory’s potential.
Follow a process that begins with an annual plan and filters down to shorter-term quarterly, monthly, weekly, and daily plans.
Develop a plan for each call that includes specific objectives for that call.
Practice organizational skills that make his work both efficient and effective.
Understand The Customer’s Needs & Business
To compete at the highest levels, sales representatives must develop professional interviewing skills that establish their credibility and expertise, as well as demonstrate empathy. Additionally, they’ll use these skills to reveal the customer’s important business needs, goals, priorities and points of view. Each sales representative should:
Focus on the customer as a “market of one.”
Cultivate skills that allow him to drive a discussion around the strategies, objectives, and initiatives of his customer’s business.
Avoid dumping information, and instead, listen while the customer does most of the talking.
Cultivate skills that help him communicate effectively at all levels in the customer’s business. This includes participating in quality business discussions with those higher up in the customer’s organization chart.
Passion For The Business
Passion creates the energy and drive required to succeed over the long haul. Sales representatives with a natural enthusiasm and passion for their business need no motivation. Members of the sales team must:
View their work as more than “just a job,” love what they do and the market they’re in.
Have the work ethic to do what it takes to succeed.
Creativity & Innovation
Developing new and better solutions to customer problems requires a big dose of creativity on the part of the sales representative. Innovation and creativity hearten perseverance and spark performance breakthroughs. Our sales team must understand that:
Required solutions are not always easy to find.
The sales cycle at times may become a drawn out process. The sales representative must find ways to stay engaged and lead that process.
Create new opportunities
Some seize existing opportunities and call it a day, only to wake up the next morning in a cloud of dust left by trailblazers who have created their own fortunes from the most unlikely and overlooked places. Top-producers not only take advantage of existing opportunities, but find ways to create them as well. Our sales representatives must understand that:
Selling requires more than sustaining current business.
They must create new business not only within current accounts, but also through new accounts.
Know your company
Only by fully understanding our resources and total capabilities can we know what it is we take to market; and, as those capabilities expand, what we take to market changes! Because of this, our sales team must understand:
That selling is more than taking orders (i.e. some sales reps run to management saying they need certain products that we don’t represent).
Our capabilities – what we do well and not so well.
The suppliers we represent, our product offerings and the applications that they best address.
Our value proposition and competitive advantage.
Authors Note – This is a huge void in most distribution sales organizations. Generally speaking our sales people do not understand our capabilities and how to present them as solutions to our customer’s business needs.
Know the market
“The ability to learn faster than your competitors,” says business strategist, Arie de Geus, “may be your only sustainable competitive advantage.” Because markets and tastes change, our selling opportunities change. Our sales representatives must learn all they can about their selling environments, including:
The markets and industries in which they compete.
The strengths and weaknesses of their competitors.
Personal development
Tennis champion, Venus Williams’ candidly observed, “You either improve or retire. I try to keep evolving.” Likewise, survival in today’s business climate mandates a continued evolution. “All of the top achievers I know are life-long learners looking for new skills, insights, and ideas,” says author, Denis Waitley, “If they’re not learning, they’re not growing . . . not moving toward excellence.” Our sales representatives must:
Desire continued growth and accept the support our company offers to achieve it.
Commit to continued growth (When is the last time they did something for the first time?)
Agree to after-hours development (Remember when sales meetings were held on Saturdays?)
Collaboration
Collaboration allows us to “huddle” with co-workers to produce greater results than we could ever achieve on our own. It’s based on the belief that early involvement, teamwork, defined responsibilities and processes can turn good ideas into dynamic solutions. Our sales representatives should demonstrate the willingness to share knowledge and expertise.
Integrity
More people are watching you than you think. The University of Notre Dame Athletics Department advises participants in its sporting events to be their “best” selves because “everything we say and do (and don’t say or do) sends a message about our values.” Notre Dame describes integrity as doing what’s right even when it’s unpopular or personally costly. “By not making a wrong right, you are supporting the wrong. By inaction, you condone the behaviour. If you know the truth, speak it loud and clear. In other words, don’t hide behind the presence of officials – play as if you are refereeing the event.”
What did you think of this list? Do you agree? Disagree? Have others to add? Let me know – I look forward to your input.
OEE – a measure of plant efficiency – what is it?
/in Process Improvement /by Mike KarleYou may have heard of the term OEE – Overall Equipment Effectiveness.
This is a great way to measure the true utilisation of your capital equipment; you may be shocked at how low your utilisation actually is….
As well as taking into account the lost time due to planned stops (maintenance, meal breaks, shift changes) and breakdowns it also measures:
Why do we want this measure? It is a great way to see where your major losses are occurring and where you should be focusing your improvement actions.
International Marketing…some tips and tricks
/in Marketing /by Mike KarleThe logistics of exporting can be quite daunting so take some time to understand what is involved and what the cost of each service or activity. Consider the following; this is just the start not the complete “picture”:
This is not the complete list, but do go into the detail, the cost will quickly add up. Make your decisions based on the best available information – talk to other who are exporting and get there experiences.
International marketing can be fully of fantastic experiences and the opportunity to travel the world. This is all great but remember you do need to remember that you have a business to run. What additional staff, expenses and time is required for visiting agents, customers, trade shows and market research?From experience, I ensured that I travelled once per quarter to my key customers and in those trips I would visit a market I wanted to develop. I kept the trip to between two weeks and three weeks – not longer. Plan well and ensure that you are using weekends to the best business advantage – building relationships.
Dave Burgess
“F” Word Business Management
/in Business Strategy /by Wayne MoloneyAs a parent of young children, I have never been a fan of Gordon Ramsey’s straight-talking TV shows. However, I have watched with a professional interest as I find the way he approaches solving a restaurants problems are so characteristic of the basic business management principals I use when working with clients.
Well it seems I am not alone as I have recently read an article in “In The Black” magazine that looks for the “gems that are often lost among the expletives and insults”.
If you have ever watched “Kitchen Nightmares”, think about some of the basic questions Gordon asks. He looks for honest feedback about the owners’ vision and why they do things like they do (often because they are copying someone else). He invariably looks at how they can simplify what they do, use more local produce and then meet their goals. Those that can put up with the abuse and take on board what he offers, and maintain the introduced changes usually go onto success in their restaurant.
With thanks to “in the Black”, let’s look at what business can learn from foul-mouthed Gordon:
So you will be surprised where you can learn about how to better run your business – we just need to keep our *%#*ing eyes and ears open.
If we are serious about efficiency….it is an ETS
/in Process Improvement /by Mike KarleThe continuous strive for excellence over the last 30 years has refined the methods and processes used resulting in LEAN principles and Six Sigma methods.
The systematic application of LEAN and Six Sigma has enabled many organisations to lead their industry in profitability and the most efficient use of raw materials and inputs.
Paul Kerin, Professional Fellow, Melbourne Business School, in his recent article states the case for the validity of an Emissions Trading Scheme(ETS) over a Carbon Tax.
For all of us who take an active role in improving the performance of businesses over the long term you should read the following article from the Australian.
Practical Business Skills Training….TAG it!
/in Human Resources, Process Improvement /by Mike KarleIt is common knowledge that in today’s complex business environment, good is frequently not good enough. TAG Team is a Business Skills Training System that stimulates Systems Thinking and encourages team members to ‘think outside the box’.
We all know that running a business requires that we have an input, a transformation process, and finally an output that we sell and deliver to our customers. If we do this efficiently, then the income generated from sales exceeds the operational expenses, and we make a profit.
But can it really be that simple?
Perhaps not…
TAG Team is designed to improve the understanding of business principles by simulating a typical business environment. The game is not a computer simulation, but rather a practical ‘hands-on’ game where groups or teams compete against each other in an attempt to generate the maximum profit for the team. The game highlights how common market and operational conditions impact on the profitability of any business.
TAG Team….
• Highlights the impact that market constraints, quality problems, lead times, operating efficiency, and process design have on business profitability.
• Is ideal for all levels and any mix of employees, from senior executives to operational staff members.
• Is fun, interactive and great for team building
• Is ideally suited to a total group size of 12 to 25 people.