In September 2009 Kraft released details of its rejected Cadbury’s merger proposal. Kraft offered Cadbury a price above their share price, 90 day stock price and closing stock price-so why did it fail? The proposal provides some important points that shed light on why the merger failed and more importantly what small businesses can learn from this situation.
Value Your Partners
Kraft started with right idea, the proposal indicates the prices are 42% over the initial share price, 34% over the 90 day stock price and 31% over the closing stock price. With these figures, the natural question is why did the merger fail? Cadbury viewed Kraft’s offer as a smoke screen. Kraft failed to provide the necessary degree of professional respect for Cadbury’s market share and growth strategies. Small business’ thinking about merging or creating professional partnerships should approach potential partners as if they have the most knowledge in the situation, I call it the ‘courtesy genius effect’. Even if your target partner cannot see the big picture, give them your respect and acknowledgement of their successes.
Tell Your Partners What You Can Do For Them
Kraft offered to keep the Somerdale facility open and to invest int he Bournvile facility, but the gesture reads like an afterthought. Kraft should have emphasized why the acquisition of these two facilities were attractive to them and how they could continue to support them.
Acknowledge A Potential Partner’s Success
Kraft acknowledged their attraction to Cadbury’s iconic brands: the Creme Egg, Cadbury Roses, Schweppes and Bubblicious. Their mistake was acknowledging the attraction and then trying to beat it with their brands. By failing to acknowledge Cadbury’s success, Kraft completely dissolved any goodwill that could have been created out of mutual respect.
Partnerships and mergers represent a powerful business tool with the potential to create an alternative avenue to success for a small businesses. For mergers and partnerships to be successful, you must bring as much to the table as you request. Avoid Kraft’s mistakes and create a relationship based on value, strengths and growth.
In every business in every part of the world there is one situation that baffles even the most gifted professionals: poor performance. Most supervisors view poor performance as an issue of the employee; but I believe that poor performance is an all inclusive situation. Everyone in Executive Leadership should bear some responsibility in creating and maintaining poor employee performance, so how do remedy the situation?
Lead by Example
The first step to combating poor performance is to acknowledge your shortcomings as a leadership example. Do you lead by example? This seems like a straightforward question, but it is the most confusing part of leadership. Make sure that you are the best example for your employee. Create a positive professional model; start your day on time and create a clear plan on what you expect to accomplish during the day. Show your employees your dedication to your tasks and motivate them through you.
Make it easy for your employees to reach you. Everyone in the organization is busy, but in order to create an effective relationship with your employees they need to be able to reach you. Create a concrete meeting schedule that will allow you to hear your employee’s concerns or to celebrate their achievements. Create a 24 hour response rule, whatever the situation agree to contact your staff within 24 hours of their attempt to reach you. In order to build morale and improve performance, you first have to build your staff’s view of their importance.
Be Clear in Your Communication
When your staff comes to you with questions or feedback, do you directly address the conversation or do you stick to PC company responses? Be as realistic as possible with your staff and help them reach their targets. Have clear expectations of your staff and be sure that your staff understands the expectations and how you expect the goals to be completed. Set clear job responsibilities for your staff and if at all possible spend a day in your staff’s shoes to ensure that your expectations are reasonable.
Meet with your staff more than once a year and talk about the staff’s view of their responsibilities and the goals. Make an effort to really listen and absorb the information being given to you. Identify the areas you want to discuss prior to the meeting and let your staff know what you really want to discuss. Set an agenda for the meetings to give your staff the opportunity to provide feedback on the effectiveness of company strategies.
Identify an Action Plan
This step seems to go without saying, but most employees are told to improve without any type of roadmap. If you staff is underperforming create specific actions to address the situation. Be sure to identify any resources available, additional training or one on one coaching. Create a timeline to meet and discuss progress and challenges. The most important part of an action plan is to identify and explain the consequences of failing to improve. Be very open with the staff about the company’s needs and what you are willing to do to help them attain those goals.
Your staff is your biggest investment as a company and it’s more cost effective to reorganize than fire. Performance is a direct reflection on training and if you view your staff as a constant work in progress, you are more likely to build the kind of staff that brings loyalty and quality to your business.
The merger of big business retailer Amazon and independent Zappo’s .com was a shock to many people including the staff of Zappo’s.com. So in the midst of all this shock was can your business learn from this $487 million dollar merger?
1. Discuss change and how it will affect your company openly with the people who will have to survive that change. Sometimes merger’s don’t allow full disclosure due to proprietary information, but if you can be transparent with your staff, then do so.
2. Listen to the fears and staff attitudes about change. Refer to these issues when you develop your change strategy.
3. Keep at least one area of the company familiar. Zappo’s.com has chosen to keep its key leadership and core values in place, and this decision has helped to ease the surprise of the transition.
4. Meet with your staff and show them how the changes to the business will benefit the customers as well as the staff.
5. Create change that will focus on your company’s core values and goals.
6. Build on your company’s current success. Take the best parts of your business and use those strategies to navigate the changes your business will face.
Businesses need customers to survive; without customers, business won’t experience growth or success. So knowing that we need our customers to survive, how can we get them to pay their invoices on time without damaging these important relationships?
1. Ensure that the same tone is conveyed throughout your customer’s purchasing experience. If stellar service is given when the product is purchased, stellar service should be given when a payment is received.
2. Create a written late payment policy and ensure that all of your staff are trained on and understand the policy.
3. Ensure the payment policy requirements, including punitive actions, are discussed with the customer at the time of purchase.
4. If you offer credit terms, establish the payment due date in advance and in writing. The easiest way to accomplish this is to insert the payment terms and conditions within the purchase agreement.
5. Reward your customer’s for prompt payment. If a customer can get a payment to you within 15 days, you may consider providing a 5-10% discount on their next order. If a payment is received within 30 days, you may consider a 3-5% discount.
6. Remind your customers that payment is considered late, even one day after the due date.
7. Manage your Accounts Receivables regularly, so you know in advance when a payment is not going to be timely.
Your business is only as good as your payment policy. In order to present a professional and successful image, you have to have a professional payment policy. Your customers should value your services as much as you their business.
I was at a meeting for the Thetford Manufacturing Club and gathered a great deal of information on some available services for businesses, please pass the information on to any business that can use it.
- BELA II grants for businesses in the East of England- this phase of the grants are for ICT only and are a match funding. You will essentially get reimbursed for up to 50% of the cost of the Technolgy upgrades or training your company needs. My company has utilized a BELA grant and it is a fabulous option for SME’s.
- There will be a change to the REV (Rural Enterprise Valley) website. The new website will be www.ruralenterprisevalley.com. If your company has a profile on the current REV website, the information will automatically transfer to the new website
- A voucher scheme is available for Knowledge Transfer Partnerships (KTP’s) through EEDA. The voucher is called an Innovation Scheme Voucher and information can be located on the EEDA website-www.eeda.org.uk.
- The Motorsport Academy is offering a free 1 Hour consultation to businesses interested in supplying or entereing the Motorsport industry.