A passion for business and leadership excellence

A passion for business and leadership excellence

 

TEC Group 422

TEC Group 422 comprises non-competitive CEOs and Presidents of both private and publicly traded organizations with a passion for business and leadership excellence.  Member companies are found listed in the top 250 companies on the 2015 ROB Top 1000, in the top 1/3 of 2015 Profit 500, in Deloitte’s Technology Fast 500™ and have been finalists in Ernst Young’s “Entrepreneur of The Year Awards” for 2014 and 2015.

Joining TEC has enabled the leaders of these organizations, as a team, to share their drive and commitment to enrich each other’s ability to achieve their individual business, professional and personal goals. Members act as a private board of trusted advisors with no agendas other than helping each other share best practices, solve management issues, make better decisions and improve leadership skills.

• This group represents broad industry backgrounds and experience including construction, business services, retail, manufacturing, distribution, real estate development, finance, franchising and technology.
• Member organizations have combined revenues of over $3.0 billion and more than 4,500 employees.
• Member CEOs/Presidents lead publicly traded and private companies which operate globally with sales and marketing offices, operations, clients and suppliers in Canada, US, numerous EU countries, South Africa and Middle East.
• The group holds monthly advisory board executive sessions  during which the team processes issues and opportunities involving leadership challenges, branding and marketing , new business launches, financial re-organization, global expansion, organizational development, senior level staffing and reorganization, retail strategy, manufacturing, board strategy and management.
• Eight times a year the group benefits from workshops with experts covering a wide range of issues and topics.
• Monthly 1-2-1 private sessions are held between the Chair and each member focusing on business and personal growth.
• Members have access to an online best practices library, member conferences and a network of more than 1,100 Canadian and 20,000 global business leaders.

Members comment on how “loneliness-at-the-top” has been eradicated and how “stress reducing” it is to be part of a group of liked-minded leaders with whom they can share and discuss matters that normally they would need to deal with in relative isolation. They are experiencing the quality of their decisions, strategies and overall problem solving noticeably improving. Access to fresh thinking and challenging conversations with peers is enhancing their personal effectiveness. 

T.E.C. is not a social club. It is challenging; it is personal; it is hard work!

If joining a TEC group interests you, contact me and we can discuss if it is a fit.

• Over 1,100 Canadian business leaders have joined TEC groups
• Their companies generate $50 billion in annual revenues and employ over 100,000.
• T.E.C. Canada member companies outperform other companies in terms of CAGR by a factor of more than three to one. (Dunn & Bradstreet research).

                  Richard Peters, Chair



  
LinkedIn: https://ca.linkedin.com/in/richardpeters2
Direct: (416) 471-1956
E-mail: rpeters@tec-canada.com
Blog: Profit and Leadership

From the Outside In: Supply Chain as Strategic Advantage

By Lisa Harrington

Even non-supply chain executives appreciate the value of flexible and agile operations.

Leading companies have come to realize that supply chain management is vital to success in the global market. Organizations now put logistics operations on the agenda for management discussion—including in the C-suite.

CEOs recognize that their supply chains are strategic assets, both for delivering on the customer promise and for fueling growth. Overall, they give their supply chains reasonably high marks for client satisfaction and operational efficiency, according to a recent study by IBM's Institute for Business Value.

Executives in outperforming enterprises, however, rate their supply chains even more highly. "Sixty-five percent say their supply chains are very effective at satisfying clients, and 62 percent say they are very effective at generating higher revenues, compared with just 42 percent and 27 percent, respectively, of executives in other organizations," the study reports.

To gain better insight into how "outsiders" perceive supply chain management, Inbound Logistics asked senior non-supply chain executives at two leading companies to share their views. They discuss the supply chain's role in business generally, and within their enterprises specifically; how that role has changed over the past few years; and how it contributes to profitability, success, sustainability, innovation, customer service, and competitive advantage. 

AT Unilever, flexible Supply Chain is The new table stakes
On any given day, two billion people use Unilever's products to look good, feel good, and get more out of life. From long-established names such as Lipton, Knorr, Lifebuoy, Sunlight, and Pond's to new innovations such as the Pureit affordable water purifier, Unilever's range of brands is as diverse as its worldwide consumer base.

The company markets more than 400 brands, ranging from nutritionally balanced foods to indulgent ice cream, affordable soap, luxurious shampoo, and everyday household care products. Many of these brands embrace long-standing, strong social missions, such as Lifebuoy's drive to promote hygiene through hand washing with soap, and Dove's campaign for real beauty.

In 2013, Unilever reported annual sales of $66.6 billion. Emerging markets account for 57 percent of its business. The company employs more than 174,000 people.

"Unilever sees the supply chain as strategic, driven through global scale and deep expertise, and fully integrated into the business strategy," says Kees Kruythoff, president, North America, Unilever. "Supply chain is absolutely critical to Unilever's success. Most importantly, it is about delivering value to customers. In an increasingly omni-channel environment, it becomes even more important to create a channel-segmented, responsive, and flexible supply chain—and to do so at the lowest possible cost. That has become the new table stakes."

Supply chain plays a lead role in supporting the global Unilever Sustainable Living Plan (USLP). Launched in November 2010, the USLP "sets out to decouple our growth from our environmental impact, while increasing our positive social impact," Kruythoff says. "It is our blueprint for sustainable business.

"By 2020, the plan calls for helping more than one billion people enjoy better health and well-being; halving our environmental footprint; and achieving 100-percent sustainable sourcing," he adds.

Supply chain has played a significant role in advancing the company's sustainable sourcing initiative. "We went from sourcing 18 percent of our commodities sustainably in 2011 to 48 percent in 2013," Kruythoff notes. "That strategy includes a big drive to source from small farmers.

"We've also realized an 18-percent improvement in CO2 efficiency since 2010," he continues. "By 2020, our goal is to have CO2 emissions from our global logistics network at or below 2010 levels, despite significantly higher volumes."

To achieve this, the company plans to reduce truck mileage, operate lower-emission vehicles, employ alternative transport such as rail or ship, and improve warehouse energy efficiency.

"Supply chain is strategic, critical, and an enabler of change," Kruythoff concludes. "As the world gets increasingly digital and connected, supply chain will only become more important."

Supply chain creates value in three key areas, according to Salwan Sumeet, Unilever's senior vice president, human resources, North America. "First, delivering cost effectiveness—the most obvious and direct benefit," he says. "Second, driving brand preference through product and service quality. Finally, driving growth, which is the most critical role.

"Customers are increasingly driving channel-specific business strategies, and adapting to a highly volatile world," he adds. "Being a partner of choice as they see opportunities or difficulties in the marketplace is a huge driver of growth."

Logistics operations also influence Unilever from within. "Nearly 65 percent of our employees work in supply chain," Sumeet says. "We can never underestimate this large and diverse workforce's impact on our culture, values, and implementation of broader company strategies."

Supply chain also plays a major role in business strategy. "Delivering reliable customer service is top priority, and a critical foundation to engaging in strategic joint business planning with customers," says Todd Tillemans, Unilever's senior vice president, customer development. "Supply chain is critical to our U.S. strategy, and especially to our goal of being our customers' choice for top strategic partner.

"A flexible and responsive supply chain enables us to be thought leaders for our customers, drives overall market development, and makes it possible to achieve consistent top- and bottom-line growth for us and for our customers," he adds.

"Supply chain is important to delivering our USLP goals—not only for Unilever, but also for our customers, through our Joint Sustainability Plans," Tillemans explains. "These wide-ranging partnerships include building a sustainable future via renewable energy initiatives, cutting greenhouse gas emissions, and reducing solid waste.

"We are investing heavily in supply chain infrastructure to continuously improve, add more value for customers, and create competitive advantage," he adds. 

Total Wine & More: Raising a Glass to Supply Chain Efficiency
Headquartered in Potomac, Md., Total Wine & More is the largest independent fine wine retailer in the United States. Its 105 stores across 16 states typically comprise 20,000 to 25,000 square feet.

Total Wine's business strategy is based on three pillars: selection, price, and service. The supply chain is critical to delivering on each of these value propositions, says Edward Cooper, Total Wine's vice president of public affairs and communications. Without an effective supply chain, the company would be hard pressed not only to meet the challenges of succeeding in this heavily regulated industry, but to deliver growth and profitability for today and tomorrow.

"We are committed to offering the best wine selection, with an emphasis on fine wines," Cooper explains. "This differentiates us from many U.S. retailers that specialize in one geographic area or price category. Our typicalstore carries more than 8,000 different wines from every wine-producing region in the world.

"Total Wine & More stores also carry more than 2,500 beers, and more than 3,000 different spirits in every price range and category," he adds.

Since opening its first store in 1991, Total Wine & More has focused on being the price leader in every community it serves. "Our tremendous buying power and special relationships with producers, importers, and wholesalers offers us considerable savings, which we pass on to customers," Cooper says. "This includes matching prices with such retail powerhouses as Costco, the largest seller of alcoholic beverages in the United States."

Because Total Wine is a direct-to-customer retailer, the company designs its stores to be welcoming and easy to navigate, with products displayed and organized clearly. Recent generation Total Wine stores, for example, offer beverage selection and wine/food pairing programs on iPads, as well as televisions broadcasting educational information. Its more than 2,000 store associates receive constant training to stay current on the latest wines, beers, and spirits offerings.

Managing large stores with extensive inventory requires an effective and efficient supply chain. "Our supply chain team facilitates product movement between suppliers and stores," says Cooper. "They work to ensure we have the right product in our stores at the right time for our customers by managing orders, inventory, and store replenishment functions."
This is no easy task, given the unusual complexities of alcohol control regulations and taxation in the United States. Alcohol distribution involves a three-tier system, comprising producers (wineries, breweries, distillers, and importers), wholesale distributors, and retailers.

Some states—or even counties—operate as alcohol beverage control (ABC) jurisdictions. Producers may only sell to distributors, who, in turn, may only sell to retailers. Distributors store product under strict security regulations, shipping it to restaurants for on-premise consumption, or locations such as ABC stores, Costco, Walmart, and other retailers for off-premise consumption. Internet sales of alcohol in the United States are low—just two percent of wine is purchased online—primarily due to these complex and strict regulations.
In the context of this arcane regulatory structure, Total Wine's supply chain team is charged with working with producers and distributors to ensure a smooth operation.

"Jay Clarke, senior vice president of supply chain, works with our partners in the two supply-side tiers to ensure we are rarely out of stock, and customers can get what they want," Cooper says. "They expect that of us, and we do everything we can to deliver. This includes managing seasonal and holiday sales peaks and valleys.

"In summer, for example, beer consumption in the United States jumps by 15 to 20 percent," he notes. "Our supply chain team has to coordinate closely with producers and wholesale distributors to ensure the products we need get to our stores.

"To deliver on our lowest-price promise, Total Wine must closely manage its cost structure—and the supply chain comes into play in a big way," he continues. "Having a mature supply chain capability helps make sure products move from one location to another effectively and efficiently. 

Supporting Small Business
"Our business model is to seek out new small brewers, vineyards, and artisanal spirits distillers, and bring these products to customers," Cooper says. "The big breweries have sophisticated distribution capabilities, but small companies do not. So our supply chain team works with them to design the logistics needed to support our stores."

Part of this forecasting support includes the craft beer market, which is expanding 20 to 25 percent year-over-year, making it the fastest growing part of the industry. It is also, incidentally, the sector of the industry that is most desired by customers, and most underrepresented in distribution. That's why Total Wine seeks out purveyors of the latest craft beers, and puts together schematics for their distribution.

"These beers—along with new brands of liquor and various types of cigars—are exactly what Total Wine's customers are looking for," Cooper says. "They are also the kind of business partners we want to build lasting and beneficial relationships with.

"Our supply chain team streamlines inbound-to-store deliveries to keep costs down—buying by the pallet load, for example, so we are not being inefficient by moving a few cases of wine on a big truck," he continues. "Supply chain takes our demand forecasts, determines what we need overall, how much inventory we can hold in our stores, and how we can move product efficiently to our locations."

Throughout all these activities, Total Wine's supply chain group tracks and manages compliance with federal, state, and local regulations. "Our supply chain team works closely with the state alcohol and tobacco regulators to ensure paperwork is done, taxes are paid, and product gets from Point A to Point B in the most streamlined way," Cooper says.

Total Wine's primary focus lies in being a brick-and-mortar retailer, and providing the in-store experience as a value-add to customers. But the company is also exploring the online channel. "We are looking at competitive threats such as Amazon, and the opportunities presented by Internet sales," Cooper says. "We are working with our supply chain group to work out compliance, taxation, and final-mile delivery issues. It's an ongoing exploration.
"We want to grow together with our producers and wholesalers," he adds. "We are big enough, and have enough heft to help build brands, and we like to do that. It's good for our customers, the producers, and wholesalers."

Total Wine's supply chain helps make this goal a reality.

Big Hairy Audacious Goals Drive Innovation: How Modern Engineering Is Reshaping Manufacturing

TEC Canada | Leadership Development for the Thinking CEO

By TEC Canada, February 18, 2014

TEC Canada is comprised of the most influential leaders and entrepreneurs from high-performing organizations across the country. These Members have compelling stories to tell about building brands that stick and creating messages that resonate. TEC has partnered with Sticky Branding to bring you these stories about the successful brands of our Members, like TEC Member and General Manager of Modern Engineering, Udo Jahn. The article first appeared on Sticky Branding.

“The BHAGs looked more audacious to outsiders than to insiders. The visionary companies didn’t see their audacity as taunting the gods. It simply never occurred to them that they couldn’t do what they set out to do.” -Jim Collins & Jerry Porras, Built To Last.

Goals drive performance, especially BHAGs — big hairy audacious goals. They stretch you to try things beyond your reach, but they also focus your team on what’s important.

Modern Engineering is one of the oldest machine shops in British Columbia. It’s a second generation family business founded in 1939, and they have a BHAG. Udo Jahn, General Manager of Modern says, “Our primary goal is to render conditions favorable to manufacture in North America.”

It’s no small goal. They’re not simply interested in competing on a global stage. They’re trying to rejuvenate the value proposition of manufacturing industrial equipment in North America. 

BHAGs drive behaviors
BHAGs have two roles. First, they stimulate and motivate your team to change. And second, they shape the ideology of your brand.

Modern Engineer’s BHAG fulfills both roles. The goal gives the team latitude to innovate and try new ideas. They can look beyond their client projects, and consider how they can make incremental improvements in the business and their approach to manufacturing. It’s liberating to innovate when you have a clear purpose.

The goal also shapes Modern’s brand. They can approach their clients, and challenge them to improve their manufacturing processes too. The ideal becomes infectious, and allows engineers to come together, try new ideas and work to improve processes and techniques.

The BHAG elevates the brand from just another supplier to a company deeply committed to innovation and pushing the status quo. 

There’s no such thing as perfection
Perfectionism is a deterrent to a BHAG. Your team needs latitude to take risks, make mistakes, learn and get better.

Udo explains, “There’s no such thing as perfection. It’s the 80/20 Rule. If you can solve 80% of the problem you’re laughing.” But very few people or companies share this point of view. Udo continues, “Everyone wants to be number one, but they forget they have to get past 50% first. We’re conditioned to strive for perfection. People measure themselves from 100% down versus 50% up.”

It’s an interesting insight, and it makes Modern’s pursuit of a BHAG more achievable. Their goal is massive. It has a lot of moving parts, and many are outside of Modern Engineering’s control. But by focusing on incremental improvements they can work on what’s in their control, and they can make tangible improvements month-over-month and year-over-year.

Udo continues, “We’re heavily invested in becoming better every day. We don’t try to compare ourselves to the competition. We try to compare ourselves to where we’ve come from, and ask are we better today?” 

Make purposeful investments
A BHAG demands action.

You can’t make manufacturing in North America productive and competitive without very purposeful investments. Udo says, “We put our money where our mouth is.”

Modern Engineering makes major investments in capital equipment, processes and talent to achieve their BHAG. For example, they’re about to become the only machine shop in Western Canada with five 5-Axis CNC machines. And they invest in the tools and automation to operate at peak performance.

Modern also invests heavily in talent. Udo explains, “Our apprenticeship program is a clear differentiator for the company. We have more apprentices than all of our direct competitors combined.”

The apprenticeship program allows Modern to find talent early, teach them how to be tradespeople versus technicians, and give them the tools to succeed. Out of Modern’s entire workforce only two of their employees were not apprentices. 

Go big or go home
Does a BHAG make a brand? No. Collins and Porras write, “BHAGs alone do not make a visionary company. Indeed, progress alone — no matter what the mechanism used to stimulate progress — does not make a visionary company.” But when used effectively, a BHAG does shape a brand.

Udo Jahn’s vision for North American manufacturing is infectious. It gets people to say, “That’s interesting. Tell me more.”

And that interest comes out in many ways. It attracts talent that want to make a dent in the manufacturing sector, and want to work towards the vision. It attracts customers that share the same belief, and want to work with suppliers that get it.

The BHAG is a lightening rod. It takes the brand from just another machine shop to one challenging the status quo and working to achieve something greater than the collective sum of its parts. 

Author bio
Jeremy Miller is the President of Sticky Branding — a strategic brand consultancy that helps companies stand out, attract customers and grow sticky brands. Jeremy publishes a weekly column called Sticky Branding Stories that shares examples of how mid-market companies are growing sticky brands. You can reach Jeremy at 416.479.4403, and for more information visit http://www.StickyBranding.com. 

TEC Member Profile
Modern Engineering is a CNC machine shop dedicated to serving their customers with integrity. They provide the latest in machining and measuring technologies in order to provide high quality, cost effective solutions. Modern is one of the oldest machine shops in British Columbia, founded in 1939. They stand out as an innovator in their sector.
photo credit: ferdy001 via photopin cc

Big Hairy Audacious Goals Drive Innovation: How Modern Engineering Is Reshaping Manufacturing

By TEC Canada, February 18, 2014

TEC Canada is comprised of the most influential leaders and entrepreneurs from high-performing organizations across the country. These Members have compelling stories to tell about building brands that stick and creating messages that resonate. TEC has partnered with Sticky Branding to bring you these stories about the successful brands of our Members, like TEC Member and General Manager of Modern Engineering, Udo Jahn. The article first appeared on Sticky Branding. 

“The BHAGs looked more audacious to outsiders than to insiders. The visionary companies didn’t see their audacity as taunting the gods. It simply never occurred to them that they couldn’t do what they set out to do.” -Jim Collins & Jerry Porras, Built To Last.

Goals drive performance, especially BHAGs — big hairy audacious goals. They stretch you to try things beyond your reach, but they also focus your team on what’s important.

Modern Engineering is one of the oldest machine shops in British Columbia. It’s a second generation family business founded in 1939, and they have a BHAG. Udo Jahn, General Manager of Modern says, “Our primary goal is to render conditions favorable to manufacture in North America.”

It’s no small goal. They’re not simply interested in competing on a global stage. They’re trying to rejuvenate the value proposition of manufacturing industrial equipment in North America. 

BHAGs drive behaviors
BHAGs have two roles. First, they stimulate and motivate your team to change. And second, they shape the ideology of your brand.

Modern Engineer’s BHAG fulfills both roles. The goal gives the team latitude to innovate and try new ideas. They can look beyond their client projects, and consider how they can make incremental improvements in the business and their approach to manufacturing. It’s liberating to innovate when you have a clear purpose.

The goal also shapes Modern’s brand. They can approach their clients, and challenge them to improve their manufacturing processes too. The ideal becomes infectious, and allows engineers to come together, try new ideas and work to improve processes and techniques.

The BHAG elevates the brand from just another supplier to a company deeply committed to innovation and pushing the status quo. 

There’s no such thing as perfection
Perfectionism is a deterrent to a BHAG. Your team needs latitude to take risks, make mistakes, learn and get better.

Udo explains, “There’s no such thing as perfection. It’s the 80/20 Rule. If you can solve 80% of the problem you’re laughing.” But very few people or companies share this point of view. Udo continues, “Everyone wants to be number one, but they forget they have to get past 50% first. We’re conditioned to strive for perfection. People measure themselves from 100% down versus 50% up.”

It’s an interesting insight, and it makes Modern’s pursuit of a BHAG more achievable. Their goal is massive. It has a lot of moving parts, and many are outside of Modern Engineering’s control. But by focusing on incremental improvements they can work on what’s in their control, and they can make tangible improvements month-over-month and year-over-year.

Udo continues, “We’re heavily invested in becoming better every day. We don’t try to compare ourselves to the competition. We try to compare ourselves to where we’ve come from, and ask are we better today?” 

Make purposeful investments

A BHAG demands action.

You can’t make manufacturing in North America productive and competitive without very purposeful investments. Udo says, “We put our money where our mouth is.”

Modern Engineering makes major investments in capital equipment, processes and talent to achieve their BHAG. For example, they’re about to become the only machine shop in Western Canada with five 5-Axis CNC machines. And they invest in the tools and automation to operate at peak performance.

Modern also invests heavily in talent. Udo explains, “Our apprenticeship program is a clear differentiator for the company. We have more apprentices than all of our direct competitors combined.”

The apprenticeship program allows Modern to find talent early, teach them how to be tradespeople versus technicians, and give them the tools to succeed. Out of Modern’s entire workforce only two of their employees were not apprentices. 

Go big or go home
Does a BHAG make a brand? No. Collins and Porras write, “BHAGs alone do not make a visionary company. Indeed, progress alone — no matter what the mechanism used to stimulate progress — does not make a visionary company.” But when used effectively, a BHAG does shape a brand.

Udo Jahn’s vision for North American manufacturing is infectious. It gets people to say, “That’s interesting. Tell me more.”

And that interest comes out in many ways. It attracts talent that want to make a dent in the manufacturing sector, and want to work towards the vision. It attracts customers that share the same belief, and want to work with suppliers that get it.

The BHAG is a lightening rod. It takes the brand from just another machine shop to one challenging the status quo and working to achieve something greater than the collective sum of its parts. 

Author bio
Jeremy Miller is the President of Sticky Branding — a strategic brand consultancy that helps companies stand out, attract customers and grow sticky brands. Jeremy publishes a weekly column called Sticky Branding Stories that shares examples of how mid-market companies are growing sticky brands. You can reach Jeremy at 416.479.4403, and for more information visit http://www.StickyBranding.com.

TEC Member Profile

Modern Engineering is a CNC machine shop dedicated to serving their customers with integrity. They provide the latest in machining and measuring technologies in order to provide high quality, cost effective solutions. Modern is one of the oldest machine shops in British Columbia, founded in 1939. They stand out as an innovator in their sector.

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When Acquisitions Become Drivers of Innovation

 

In the world of technology, companies are increasingly moving beyond growing organically and using acquisitions to enlarge their operations. Some have also made a strategic decision to acquire R&D rather than try to grow innovation in house.

Take for example Apple’s acquisition this summer of Toronto-based Locationary, the venture-backed startup that specializes in location data.  According to a number of market experts, this deal allows Apple – which has its own R&D division – to immediately augment its mapping service so that users can access up-to-date information on local businesses.

Whether the acquirer is Apple, Google or Blackberry, the objective in these acquisitions must be carefully defined. That’s the view of John Banks, who teaches MBA students about M&A at Waterloo, Ontario’s Wilfrid Laurier University. “Regardless of how attractive the deal price or fortuitous the opportunity, it is essential that the impact the acquisition is intended to have on the company’s strategic direction be both understood and realistic for the transaction to be truly successful,” Banks says.

Enterprises that use M&A to supplement their R&D can approach acquisitions in a passive or active way. Those doing a formal search process tend to have access to strong corporate finance skills and are able to apply rigorous valuations and criteria for potential deals. Banks agrees with the value of using specialized expertise: “The assessment needs to be especially meticulous since research shows that this particular aspect of M&A is often characterized by incomplete if not irrational thinking.”

A smaller company is often attractive as an acquisition target because it can have the flexibility of a speed boat that manoeuvers rapidly around larger ships. “There is the ability for a small company to be nimble and to not be hampered by bureaucracy. They can do R&D at a quicker pace and without legacy products,” says Amar Varma, founder of Xtreme Labs, a Toronto-based provider of mobile solutions to businesses. (Varma coached BumpTop prior to its acquisition by Google in 2010.)

The issue for a larger company that chooses to use M&A to develop an innovative product pipeline is the risk of missing the window of opportunity to buy. If the targets are very attractive, they will be acquired. Google bought YouTube and capitalized on gaining a unique business while it was still available in the market.

A common impetus to enter acquisition mode is when the larger company is looking to grow by boosting a product or service offering. Once the target has been identified, it’s all about timing.

Says Varma: “Startups are continually looking for cash. The ability for a startup to obtain cash through customers or investors can significantly impact the upward trajectory of the deal price. This means the acquirer must purchase a startup at the optimal time – before there is too much competition to buy. Often, there is no demand until there is demand.”

When a company uses acquisitions to supplement its R&D, the corporate finance process needs to be highly streamlined and focused on its mission. “In order for an acquisition to go well, there needs to be strategic alignment for the bigger vision of the deal, an appropriate integration plan that minimizes day-to-day disruptions, and consideration for the cultural fit of both companies,” says Haroon Mirza, entrepreneur in residence at OMERS Ventures and co-founder of CognoVision, which was acquired by Intel in 2010.

The period immediately after the acquisition can be challenging, particularly if the small enterprise bought for R&D development has a superior product, as this can cause resentment by the acquirer’s team of employees. The need for cultural fit suddenly becomes startlingly clear. The on-boarding entrepreneurs will need a top executive at the acquiring business to champion the buy.

“It becomes important to keep employees of the acquiree informed about what the acquisition means for them – this can be a confusing time for employees who may feel their jobs are at risk and could consider leaving if they’re not well-informed,” Mirza explains.

Mirza was satisfied with his and his co-founders’ decision to have CognoVision acquired by Intel. “I do agree that an M&A can be a viable alternative to organic growth. For the acquirer, benefits include immediate access to intellectual property, business and technical domain expertise in terms of talent, and also our customers.

“For the acquired company, benefits include gaining access to significantly more resources for R&D, sales and marketing which can accelerate business growth by means of improved sales reach, cost optimization, and increased revenues.”

Jacoline Loewen is a director at Crosbie & Co. Inc., a provider of advice to small and medium-sized businesses. She is also the author of “Money Magnet: How to Attract Investors to Your Business.”