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Mergers & Acquisition Disruption for Exponential Growth: How Amazon’s Purchase of Whole Foods Upended Retailer’s Strategic Plan – 2 Tips!

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The Point: When Amazon announced that they were buying Whole Foods for close to $14 billion, the stock price of Amazon rose to 2.4%. This stock price lift was reported by the news to add roughly $11 billion to Amazon’s market capitalization. At this same period, the stock price of Sprouts decreased by 6.3%, Kroger dropped by 9.2% and Super Value plummeted by 14.4%. It was obvious that one could perceive the short term plans of most traditional retailers (including mergers & acquisitions) – that is, working through some shredding machines. Amazon’s recent purchase now holds high implications towards the future of groceries, the food industry at large, including general shopping – it proved how the strategy of exponential growth could be used to disrupt any industry. This post will discuss how any Mergers & Acquisition deal can disrupt an industry using a powerful Strategic Plan that guarantees growth over competitors…Enjoy.

Mergers & Acquisition Disruption for Exponential Growth 2 Tips

Hello, We’re Amazon. We’re Here to Buy You!

The purchase announcement made by Amazon made the speed and nature of future Mergers & Acquisitions far more challenging for all of us, or did it?. There have been 3 questionable premises by which most traditional retailers are now looking to build Strategic Plans on. The first was whether they can include digital capacities quicker than how Amazon is adding more stores. The second being that Amazon’s e-commerce competitive space is still constrained to retails sales in U.S. The last was how retailers who are brick-n-mortar based can transition to a digital world with any profit by cautiously growing e-commerce sales.

It is now very clear that Amazon’s Strategic Plan intends to offer almost everything for customers- this is a strong indicator that the retail arenas are vulnerable. Think of this for a moment, if Amazon was able to buy into the grocery channel, what do you think can stop it from penetrating into department stores, furniture stores, drug stores or electronic stores (Or, fill in the blank when it comes to _____ stores?) Alibaba, for example, did that in China and beyond with their Strategic Plan without regard to Mergers & Acquisitions. Another thing to also consider is that Amazon may decide to use groceries to increase customers’ delivery frequency – this could pile more profit into home delivery vehicles faster. From now on, retailers in any industry must constantly learn how to develop viable retail Strategy Plans that can help achieve exponential growth and compete worldwide in scope. 

2 Tips on Using Mergers & Acquisition Disruption for Exponential Growth

Let’s use the Amazon Mergers & Acquisition as a case study to explain two tips as disruption for exponential growth:

Tip #1: Advance and Merge Physical with Digital Capabilities

Now more than ever, the Amazon Mergers & Acquisitions activity reflects that it’s more strategically reasonable to conclude only the most viable retail Strategic Plan is the one that can advance and merge physical and digital capabilities. This advance and merge will have to be better than Amazon (or your major competitor in your Industry). What this implies is that retailers need to constantly be well equipped in order to compete with Amazon in certain fundamental capabilities – For example, expense management and innovation.

Tip #2: Develop the Innovation Engine

The real truth is that it is not the e-commerce network of Amazon that gives it its greatest competitive advantage. Instead, it is really the innovation engine at its disposal that provides competitive advantage over its rivals. In order to compete with Amazon’s constant innovations; traditional retailers must relearn how to innovate like successful startups do. This will require the movement from predictive plans to adaptive and building teams of agile innovators. Agile innovation teams are small and also multidisciplinary – they are well equipped with every needed physical and digital skill required to complete with task. They are also geared towards rapid pivots, not predictable straight-aways. These teams tend to always prefer creative working environments, instead of hierarchical bureaucracies.

SUMMARY

In this post we’ve explored the topic of Mergers & Acquisition Disruption for Exponential Growth: How Amazon’s Purchase of Whole Foods Upended Retailer’s Strategic Plan along with 2 Tips! As you have seen above, the retail world has recently learned the limitations predictive Strategic Planning can result to (as compared to a Strategic Plan consisting of adaptive innovation – especially in an unpredictable market!) The right moment could be upon us for retailers to rapidly learn how to adapt to their lists of strategic initiatives, merge digital and physical capabilities and improve on the funding/speed for execution through the development of innovation engines.

Sam Palazzolo

Leading at the Tip of the Spear - The Leader

PS – I just published my 4th book, aptly titled “Leading at the Tip of the Spear: The Leader” which looks at the skills needed to successfully lead in today’s business climate. I hope you’ll purchase copies for yourself/the leaders you know. 100% of the net profits go towards supporting my 501(c)(3) charity at the Javelin Institute. Amazon’s editors had the following to say about the work:

“In these days when so many expect so much recognition for doing so little, leadership seems easy, when it’s really harder than ever. To be that person who truly takes a chance, makes a stand, and ventures out in front of the crowd requires courage, commitment, and conviction—qualities that more than ever seem to be in short supply. There’s no shortcut to the skills that mark a true leader, but there are definite strategies that can help you set your internal compass, find the right route, and steer others onto the right path.

Leading at the Tip of the Spear – The Leader focuses on the physical, mental, emotional, intuitional, and spiritual abilities that are found in leaders who are willing to lead. You will learn to develop your individual values and purpose, strengthen your foresight and failure-resistance, step up your self-control, plan for any contingencies, and always stay on the offense. It will take effort and energy to understand the proposed process and fully implement it in life and business, but leadership is all about doing hard things for the right reasons. Once you’ve mastered true leadership, nothing can stop you from having the career and the life you’ve worked for.”

The Leadership Challenge: Recruiting Top Talent – 4 Tips!

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The Point: At Tip of the Spear we know that the best strategic plans and the best processes often come-up far short of potential. Why? Regardless of the strategic plan or the processes in place in the corporate workplace today, if you don’t have the talent to execute both with precision, you’ll fail – And it all begins/ends with how you go about recruiting top talent! So in this post, we’ll explore the leadership challenge of recruiting top talent and provide 4 tips for success… Enjoy!

The Leadership Challenge Recruiting Top Talent 4 Tips

People, Processes and Pay plans… Oh My!

Have you ever heard of the “top” talent? The most important part of every business is leadership, followed closely by the talent they employ. While it might take more than 50 days to hire and activate talent who could fill up organizational positions, your staffing can also be an exciting journey. Building a company might mean finding a way to attract top talent sourced from a global candidate pool. Typically, the “top” talent already has employment. So how will you effectively not only identify but convince them to stop working where they’re at and start working for you where you’re at? Consider the following tips in winning the recruiting game for top talent:

Tip #4 – Win the Recruiting Top Talent Game

Once you consider the orthodox method of hiring, you are likely to shoot yourself in the foot. Change it up with your job description. For example, consider a creative way of hiring. If you want to net high-end or top talent, then your job posting needs to stand out from the crowd. While thinking of an ingenious way of hiring, you should consider adding a competitive salary. In that way, you are matching the value of the applicant with your offer for the job.

Tip #3 – Putting Extraneous Information Away for Top Talent Generation

More than that, put all extraneous information about your company away. Do not include anything that is not relevant about the opening and your company in your vacancy posting. Precision and creating perfects bullets for requirements and benefits of the job are a way of attracting top talent.

Tip #2 – SEO Strategies for Top Talent Recruiting

What SEO plans have you deployed for such openings before? Your Internal SEO experts on your digital marketing team could assist in identifying and incorporating search words, or tags that to drive the talent you are looking for towards you. In LinkedIn’s recent updates, there is a search functionality for both employers and job seekers and Google’s new AI-powered jobs search engine, effective SEO incorporation in job postings is important to get your job posting in front of the high-end or top talent with the skills and experiences your organization demands.

Tip #1 – Forgetting How Long It Takes to Hire

Hiring the perfect top talent can be long time-wise, but rewarding financially. Top talent are always defining the pace of business. Finding a perfect candidate for your business or company might be time-consuming. It might take several weeks/months before you find the perfect superstar. However, no matter how long it takes, most times, the time is worth it.

SUMMARY

In this post we’ve explored the topic “The Leadership Challenge: Recruiting Top Talent – 4 Tips!” It’s important to note that while strategic plans and processes are important to business success, there is little that leadership can do to achieve such success without the right talent on staff (And at the core of that people equation is Leadership!)

Sam Palazzolo

Leading at the Tip of the Spear Lunch Offer

The Importance of a Mergers & Acquisitions Strategic Plan – 3 Tips!

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The Point: The thought of acquiring another company can be a very seductive strategic plan when CEOs wish to improve corporate performance and overall growth. Companies spend a huge amount of money every year on acquisitions – yet studies have confirmed that the rate of failure among mergers & acquisitions is at an all time high (peak!). What exactly are the causes of these failures (and more importantly successes)? In this post, we’ll discuss the importance of a Mergers & Acquisitions Strategic Plan and provide 3 Tips… Enjoy!

The Importance of a Mergers & Acquisitions Strategic Plan – 3 Tips!

What Leadership Does Wrong?

A large number of acquisitions miss the mark in regards to expectations since organizational leadership mistakenly attempts to coordinate candidates with the strategic aim behind the arrangement, neglecting to recognize bargains that may enhance current operations and those that could drastically change growth prospects of the company. These often make organizations pay the wrong price (i.e., overvalued) and integrate the acquisition wrongly.

There are two motivations behind acquiring a company, which most executives frequently befuddle. The first, and the most widely recognized one, is to increase your organization’s present performance – That is, to hold a superior position, while cutting expenses. The second, and less-known reason for acquiring a company, is to re-evaluate the mode of business operations through expense reduction – This is most likely to confound investors with spectacular pay off (especially when labor costs are slashed).

Integration often determines whether the acquisition will succeed or fail. You should be able to describe exactly what you are buying to foresee the way integration will play out.

One powerful way forecast effectively is to view the established targets/goals in its business model. Additionally, value is created and delivered through 4 interdependent elements of a business model:

– The customer value proposition is the first element

– The profit formula

– Available resources (such as technology, employees and cash)

– Lastly processes (including budget, R&D, manufacturing, and sales)

Three Tips of Having a Good Mergers & Acquisition Strategic Plan

Tip #1: Helps in Acquiring Resources That Command Premium Prices

Having plans to improve a new product or service is no guarantee to command a price premium. Buying improved components (compatible with their products) is a strategy that is routinely done by some companies to command premium prices.

Tip #2: It Helps to Lower Company Costs

Leadership often promise that an acquisition will lower costs, where in reality, it’s only possible in few scenarios, such as, and acquiring company with high fixed costs can expect higher profit potential. Most deals succeed using almost the same strategy.

The parent plugs some particular assets from the procurement into its current model, ejecting whatever is left of the acquired model and closing down, laying-off or offering redundant assets for sale. The execution help comes about because of utilizing the objective’s assets such that scale financial matters can drive down expenses. The strategic use of resources from the target will help in boosting performance and drive down costs 

Tip #3: A Disruptive Business Model can be Acquired

Disruptive business models and products have been proven to be the most reliable sources of massive growth in both margins and revenues. Disruptive companies typically offer simpler and more affordable products than what bigger players offer. Their footholds are well secured in the low-end of a market and gradually step up to products with higher margin and performance.

SUMMARY

In Mergers & Acquisitions, we all believe that success will be the end result. However, wrong companies are being purchased daily for the erroneous motive, wrong elements are integrated into the wrong business models, and wrong measures of value used when pricing deals (This is a mess that shouldn’t be!) You must be able to predict accurately if a company under acquisition consideration is a great deal, or just a debacle in the waiting!

 

Sam Palazzolo

PS – If you or your organization are challenged as a result of M&A activity, please don’t hesitate to drop me a line and request future post titles! Here are a few of the other M&A titles previously published/in the works:

– Will Your M&A be a Success of Failure? (CLICK HERE)

– How to Successfully Survive Mergers & Acquisitions

– M&A: Creating Shareholder Value

– M&A: Should You Go For Stock or Cash?

The Leadership Challenge: Acceptance – 3 Tips!

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The Point: No matter how much you’ve tried for a successful outcome (Diagnosed the problem from multiple perspectives, researched potential solutions, spent thousands of dollars, etc.), sometimes you simply have to accept that failure is an option. In this post, we’ll explore the leadership challenge of acceptance and provide 3 tips to help you draw closure… Enjoy!

The Leadership Challenge: Acceptance: 3 Tips!

Welcome to Reality Distortion!

In the “romance” stage of business, everything seems to come up smelling like a rose. For example, as a leader have you ever come up with a plan that you thought was “air tight” in design? Moments of failure after launch were most likely discounted/minimalized. Conversely, moments of success as only you can see them through your focal pattern were romanticized, blown-up to successfully epic proportions, and a comfortable glide pattern presented itself (Hence the “Walking on Cloud 9” analogy is appropriate).

The truth of the matter is that your leadership mind is playing a game on you. Unable to see reality for what it actually is, leads you to a state of reality distortion where the truth is “bent” in favor of what you want to see. Now you may really, really, really want to see things for the way that you want them and not as the way they really are. However, in the end, a slap of reality will occur snapping you out of distortion!

Just Get It Over With

I have worked with a leader for the last several years that is extremely bright, driven to achieve, and successful in their professional life (Not that there hasn’t been struggles professionally, but they’ve weathered many a storm!) This leader’s only downfall is that they continue to put themselves out of position on the personal playing field in the here and now. Their orientation is to simply be down the road where the future lies, leaving them to desire just get the current state over.

This “Just get it over with” mentality rings especially true when they encounter failure in the personal/private moment. Regardless of how much time, effort, or energy was applied to a given situation, their desire is to simply move on… But to where? (I’m not concerned of the “With Who?” as they are content being solo/alone in decision making).

Moving On

As a leader you are challenged to do your best, and depending on the situation at hand your best may not be good enough. So how do you fold tent after failure and simply move on? The following represent three leadership challenge tips for acceptance:

Tip #3 – Take Ownership

To simply “bounce” from project to project, initiative to initiative, and/or place to place might seem like a rather flipped acceptance response. While your visceral reaction might be to pull the sheets up over your head and never leave the bedroom, reality dictates that you take ownership and positively accept the situation for what it was. Whether you like it or not, you must take responsibility for where you’ve been and what you’ve done. Some albatrosses are larger than others to have around your neck, but start with recognizing that you, and you alone are responsible for your own actions (and quite frankly they are the only actions you are in control of!)

Tip #2 – Set a New Course

Upon positive acceptance of the situation at hand, set a strategic plan that identifies where you want to go. There are a host of visualization exercises that you can conduct to help you identify the where’s, who’s, why’s, and how’s that should be considered. Remember, the course you strategically plan for tomorrow might change due to situations outside of your control (But at least you’ll develop them for yourself!)

Tip #1 – Install/Sustain

Lastly, put your plan into action. Include a series of metrics to measure/monitor your successes as well as failures. Important to (1) recalibrate as appropriate and (2) lose your reality distortion goggles!

SUMMARY

In this post we’ve examined the leadership challenge of acceptance, as well as providing 3 tips to help you as a leader be more successful. If life is a game worth playing, I know two things are certain: (1) Tough times don’t last, but tough people do and (2) Challenges are what make life interesting and overcoming them is what makes life meaningful.

 

Sam Palazzolo

www.BloodSweatSpears.com

Leadership Challenge – Is It Possible to Emerge From the Darkest Hell Healed and Restored?

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We recently participated in a leadership roundtable discussion.  The focus was on the many leadership challenge moments that leaders face running their organizations.  Whether the leader is in charge of a startup, with its many ups/downs associated with daily (sometimes hourly) survival or the leadership challenge of running an existing organization (sometimes no easy feat regardless of how long they’ve been in business!)  There were many topics considered for discussion:

  • What’s the best way to develop the strategic plan (and how to get that strategic plan implemented)?
  • Best practices when it comes to dealing with moments of change
  • How to ensure that all (both leaders and team members) have the same organizational vision through communication
  • Implementing recruiting strategies for A+ candidates (A version of the Top Grading methodology)
  • Ensuring that the organization continues to be agile/innovative
  • Creating a “High Potential” program for future organizational leaders

As you can tell, the topics were those most pressing to the leaders gathered.  Questions were asked/answered, and an overall tone of satisfaction permeated the meeting room. That tone though shifted abruptly when one of the leaders in attendance asked the following question:

“Here’s a leadership challenge for you… Is it possible to emerge from the darkest hell healed and restored?”

If you’ve read Malcom Gladwell’s recently released book, David & Goliath, then you know the story presented in Chapter 5 – Emil “Jay” Freireich. The story is of Dr. Freireich and his tumultuous search for a cancer cure for cancer. There is also presented in this chapter a theory regarding direct hits, near misses and overall misses (Think the London bombing that occurred during World War 2 . The theory being that those who received direct hits, as morbid as it sounds, don’t really count for “after bombing” feedback.  Those that achieved overall misses still laid in wait/fear for future bombings (a very small minority).  Finally, those that achieved near misses and lived to tell the tale found that they were not only resilient, but encouraged and grew in their resolve to overcome successfully future bombings!

With this knowledge in mind, we shared the story and similar story that those leaders who have experienced truly dark spaces (The ones they don’t tell you about in MBA school) often times have similar resiliency and resolve to overcome! The pressing leadership challenge therefore doesn’t really appear to present itself of much of a challenge at all (albeit those effected might tell a slightly different tale!)

What’s the Point?  So what’s the point? Can it be as simple as “that which does not kill us only makes us stronger!” Based on the research of Malcom Gladwell adn Dr. Freireich, we think that not only is there a high resiliency that would allow one to overcome obstacles but also succeed.