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The material handling equipment industry is a niche, complex and fast-growing sector, with many stakeholders involved in its planning, implementation and maintenance. With rapidly evolving technologies and demands, keeping up with all of the latest trends and findings becomes increasingly difficult. Based on my research and conversations with R.J. Safranek , Managing Director at SellSide Group , I aim to provide an overview of some major challenges and solutions facing the industry today. Status Quo There are a number of problems that can arise in the material handling equipment industry, including: Equipment costs. The cost of manufacturing and transporting products has risen over time, which means that customers are paying more for their goods. This is due to factors such as higher fuel prices, higher wages and insurance premiums for employees (which have increased due to health care reform). Higher costs have an adverse impact on EBITDA especially if you are a privately owned company with limited resources. Inflation and an unstable economy can create a challenging pricing environment for material handling companies. This can make it difficult for companies to price their services competitively and can lead to decreased profitability. Lack of skilled labour. With baby boomers retiring from the workforce in recent and coming years, there's been a shortage of skilled workers who can fill these positions--and this shortage will continue into 2030s due to demographic shifts in our country's population makeup (more older Americans) as well as technological advances like robotics replacing certain tasks previously performed by humans at work sites around the world today! Labour costs are a significant challenge for many material handling companies. Skilled workers are often in short supply, and companies may struggle to attract and retain qualified employees. This can lead to increased costs for training and turnover, as well as potential delays in completing projects. The rise of e-commerce has put significant pressure on this industry. Customers increasingly expect quick and immediate delivery of their orders, which can be challenging for material handling companies to accommodate. Additionally, trucking challenges such as driver shortages and rising fuel costs can make it difficult to transport goods efficiently. Alternatives Automation technology. The use of automation in material handling equipment has been a major trend over the past decade, and it's expected to continue growing as companies look for ways to improve efficiency, reduce costs and combat a diminishing labour pool. The advantages of automation include: increased efficiency - automated systems can move materials faster and more precisely than human workers can; reduced labour costs - automated systems don't require salaries or benefits, so they're cheaper than hiring people. By embracing new technologies like AMRs, AGVs, and robotics, companies can improve efficiency, reduce errors, and stay competitive in an increasingly challenging market: AMRs , or autonomous mobile robots, are becoming increasingly popular in the material handling industry. The main difference between an AGV (automated guided vehicle) and an AMR is that AMRs use free navigation by means of sensors or lasers, while AGVs are located with fixed elements such as magnetic tapes, magnets, or beacons. This means that AMRs are more flexible and can adapt to changing environments more easily than AGVs. AMRs can be used for a variety of tasks, from transporting materials to performing inventory checks. AGVs have been around for a while and are still used in many material handling applications. These vehicles are programmed to follow a specific path and can be used to transport materials throughout a facility. They are often used in manufacturing plants and warehouses to move materials between different stages of production. Robotics are also becoming more common in material handling applications, particularly in picking applications. Companies like Locus Robotics are using robots to help workers pick items more efficiently and accurately. These robots are equipped with sensors and cameras that allow them to navigate through a facility and locate items using barcode scanning or other technologies. By automating the picking process, companies can reduce errors and improve efficiency, ultimately leading to cost savings and improved customer satisfaction. Good to Picker solutions. Goods-to-person (GTP) solutions are a modern order fulfilment approach that combines automated storage and retrieval with precise, ergonomic selection methods. Some benefits include: Goods to Picker solutions can increase efficiency and accuracy of the picking process by eliminating wasteful walk time and offering accurate inventory and pick data. This can lead to a reduction in order errors and an increase in operational uptime, as well as improve overall customer experience. Goods to Picker solutions are easily scalable to match growing demand or an increase in SKUs , and can be integrated with other automation technologies and warehouse software for even greater efficiencies. This can help businesses optimize space utilization for a small footprint and flexible layout, and easily increase capacity by adding robots, modules, or workstations with little to no downtime. Warehouse Management Software solutions. Understanding the benefits of a warehouse management system is critical for growing firms. A warehouse management system can tremendously help growing enterprises with on-hand goods (WMS). By monitoring work processes at multiple levels, boosting productivity, and increasing asset utilization, the WMS will improve their operational efficiency for both labour and physical space. Implementing a WMS can help businesses streamline their warehouse operations, reduce inventory carrying costs, and improve customer satisfaction. With a WMS, businesses can automate and optimize many warehouse processes, including inventory tracking, order fulfilment, and shipping. WMS software can provide real-time visibility into inventory levels, order status, and warehouse operations, which can help businesses make data-driven decisions that improve efficiency and reduce costs. By having a better understanding of their warehouse operations, businesses can better allocate resources, optimize order picking, and improve overall warehouse performance. Final Thoughts The material handling equipment industry is constantly evolving, so it's important to stay on top of the latest trends. As you can see from this article, there are many issues that need to be addressed within this field. However, we have also seen some solutions that have been put into place and have helped improve the overall efficiency of how we store and transport products. As I continue my journey in further exploring this field, I will undoubtedly encounter more problems and solutions along the way! From A Student's Perspective

The recent collision of rapidly rising interest rates causing the banking sector meltdown is creating a Perfect Storm for Middle Market owner/operators. Interestingly, the flipside of this Perfect Storm may also offer the last best hope to sell a quality middle market company at fair value for some time to come. The Federal Reserve is charged with the dual mandate of stable prices (i.e., control inflation) and maximum employment. With recent inflation rising well above the Fed’s stated goal of 2%, starting in May 2022 they began rapidly raising interest rates. Although inflation is slowing, the action taken by the Fed had the adverse impact of creating a “run on the banks”. Silicon Valley Bank (SVB) may be the first bank to fail this time but we have not seen the end yet. The Fed, Treasury and FDIC quickly responded to the “systemic risk” posed by SVB but there remains uncertainly by depositors particularly with regards to local and regional banks. The net effect of the recent bank failures is putting enormous depository pressures on all local and regional institutions while they wait for new more rigorous regulation and capital requirements. There is already a steady “run” on the deposits of these institutions that will continue unless (and until) the Federal Government takes the bold step of providing a full guaranty of all deposits, regardless of size. Given the requirement that such a step will need strong bipartisan support in Congress this is unlikely to happen anytime soon. Taken together these factors do not bode well for middle market companies. A credit crunch and likely recession is looming. Any company that borrows money will see their operating profits squeezed as interest expense goes up. Middle Market companies, without access to the Commercial Paper market, rely heavily on local and regional banks for their working capital and other borrowing requirements. As these institutions respond to depository pressure, more stringent government regulation and higher capital requirements borrowers will face reduced credit availability, tighter borrowing restrictions, calls for greater capital contributions to their businesses and recessionary pressures. These same market dynamics adversely impact Private Equity firms, forcing them to pull back on purchase price multiples being offered for deals. Despite all these stress points the overall conditions suggest the current time may offer the best opportunity for middle market companies to move quickly towards a successful sales transaction. Interest rates are not likely to significantly fall in the near future. The shock to the banking system needs time to play out. In the interim middle market companies will be hard pressed to maintain operating profits without owners making significant capital contributions taking up the shortfall from the banks. There is a truism in finance that “Time is the enemy of all IRRs”. A strong case can be made to middle market business owners and Private Equity firms that Now is the Time to consider a sale of their company.

One of the best ways a leader can execute a strategy and supercharge a company’s growth is to lead by example. This simple strategy earns you the respect and trust of your team. When I joined NCH in 2009 as the CEO of Asia, I knew that I would be managing 450 sales people. I was transitioning from owning an advertising agency to running a specialty chemical company and I wanted to earn the trust of the team. I learned the sales process, went out in the field and opened up 100 new accounts in 30 days. This gave me tremendous credibility when working with the sales teams in Asia. Each manager that I hired regardless of their title, had to learn our process and go out in the field. As a management team we knew what the sales people went through every day and were able to develop a strategy for success that the team believed in because we were able to go out and do it. I have had the pleasure of working with some amazing teams in APAC and the US and they have 3 things in common. They all work really hard, have great attitudes and lead by example.

As the world of product distribution is becoming ever more saturated, distributors are looking for ways to differentiate themselves from their competitors as a way to attract more customers and bolster profitability. This has sparked the emergence and success in the past few years of value added distribution or VADs, which I believe will continue to grow and become much higher in demand among private equity firms and strategic buyers in the near future. To start off, these types of firms generally equip the conventional modern-day business model of a traditional distributor, buying in bulk from manufacturers and reselling at higher price to retailers, while also providing basic logistical and informational support. However, in addition to these services, VADs provide additional services to their customers, such as services regarding setup and assembly, product development, product modifications, repairs, etc. With the development of technology we can see these services developing further, with new technologies in regards to building automation and software enabling distributors to incorporate more abstract services such as asset usage tracking and advanced inventory management solutions into their distribution practice, helping to efficiently develop their supply chain operations and boost their customer experience. This is seen in a survey conducted by the IDC, where they found that 62% of the sampled distributors prioritized the increased adoption of modern day technology to boost the innovation and efficiency of value-added services. Pointing to their end goal of one upping their competition which will provide long term benefit regarding where they stand in the market. This has prompted a recent surge in M&A activities, with many companies and private equity firms taking up a deep interest in VAD’s as they prove to be a hot business model. This, for example, can be seen in a recent M&A update released by a prominent middle market investment bank regarding the specialty chemical market. They found that due to the recent ESG (Environmental, social, and corporate governance) wave taking over the chemical production industry, companies are starting to put more emphasis on sustainable and environmentally friendly production, increasing demand for more localized production, which will result in increased benefit for value-added distributors as they are no longer competing against the prices of offshore distributors and could see more logistical benefits as well as overall demand as their value added services put them above other distributors in the pecking order. This is hugely responsible for the increased consolidation seen regarding VAD’s as these benefits are largely valued by not only private equity firms, but also other distributors, as they look to expand their distribution capabilities. However, prior to executing a M&A deal, VAD’s must consider a multitude of factors as completing a merger or acquisition can’t be justified as simply forming a partnership as a way to grow your business. It is important to consider the effects the other party your merging or acquiring will have on your services, as it specifically can pose a high risk to your value added services as attention to the quality and execution of these services can be unproportionally shifted to the services provided by the other company taking part of the M&A deal. In addition, these services are at risk of being diluted or disregarded during the integration process, which is why it’s ultimately important for VADs to formulate an understanding of how their value-added services will be treated and integrated post merger or acquisition. From experience, working as an intern at Sellside Group, the emphasis put on the desirability of VAD’s offers anecdotal evidence pointing to the markets higher demand of these types of firms. This paired with their intrinsic leg up on traditional distributors makes it fair to assume that we will see a consistent growth in the popularity and capabilities of these firms as well as increased M&A activity in the near future as these high-demand businesses weigh their pros and cons in their pursuit of maximizing their potential.

Technology has enabled B-TO-B buyers to use e-commerce for buying and researching products and services online. Technology has also allowed B-TO-B buyers to use social media to connect with vendors and salespeople on their terms. B-TO-B companies and salespeople need new skills and training to meet the expectations of the next level buyers. Important Points Driving B-TO-B revenue growth requires well-defined and ongoing sales training programs. After working with more than 800 sales managers and salespeople, we found less than half possess the capabilities required to drive growth. Providing sales teams with next-level capabilities takes effort, but the ROI is significant. B-TO-Bs having the most success provide a more consultative and solution-oriented approach with their customers. This requires strong product knowledge and a well-thought-out value proposition for the customer. Our research in interviewing thousands of salespeople and managers has shown there are two common threads in successful salespeople: organization and relationship skills. Over the past 30 years, the executives at Sellside have seen buyers shift from relying exclusively on salespeople for product knowledge and purchases, to using multiple channels in their buying process. B-TO-B customers often research and use websites, social media, reviews, and videos in addition to meeting and speaking to a salesperson. To become world-class in today’s digital environment, B-TO-B sales organizations will need to make two significant shifts in the way they lead teams and approach clients; become proficient in multi-channel sales and communications and implement a solution-oriented recurring revenue mindset. They will also have to strengthen their core skills of relationship building and organization. As less than half of the sales teams have the tools and skills to achieve these changes, significant training and development for B-TO-B sales organizations will be required. At Sellside Group we have a simple formula, Success = Work Effort + Attitude + Skills. We believe the people on any team need to have a great work effort and attitude and then it is the managers and the company’s responsibility to make sure the people with great work efforts and attitudes have all the tools, skills and training they need to be successful. Here’s what you need to give those top performers the skills required to deliver outstanding performance in this next era of B-TO-B Sales. 1. Become Proficient in Multi Chanel Sales and Communications As B-TO-B buyers have become more comfortable and proficient buying online and using social media, they have more transparency, more choices, more ways to communicate and more ways to get information. Sales teams need to embrace these new technologies and in addition to being out in the field visiting customers, use email, texting, chatting and phone calls to communicate with buyers. Social media platforms like LinkedIn are great ways to research a buyer, contact a buyer, get referrals and build trust through a shared network. In our research, salespeople fear new e-commerce systems will replace them. However, that is not the case. There are many strategies that can be used to integrate the salesperson into the e-commerce experience to build trust with the buyer, the sales rep., and their company. 2. Implement a solution-selling & recurring revenue mindset With the rise of larger e-commerce players, Companies need to develop programs that add value for their customers and build recurring revenue streams. Salespeople need to add value to their customers through service, training and dependability. Sales teams need to be highly trained experts in their field to add a level of dependability and service their customers expect. Great sales teams will partner with their customers to design a customized value proposition and relentlessly work to show and document the value. An MRO company we worked with was selling its customers one off products by using a method called pitch, demo and close. The sales team ate what they killed every day, and the company was always trying to figure out what was going to be sold each day to support the business. We developed a contractual based model where the sales team would make a friend, find the issues, show the solutions and ROI, and develop a proposal which included service, storage hardware and the products on a monthly contract. This solution-selling, recurring revenue model gave the commission-based sales team a stable income and allowed the company to better plan its inventory and properly support customers. The program benefited the customer by saving them money in parts, labor and downtime costs. 3. Become proficient at Relationship Building Making a friend is the foundation of any great relationship. With all things being equal people want to do business with people that they like and trust. It is surprising how many salespeople go right into a presentation about themselves, their company and their products without investing the time to get to know their potential customer both personally and professionally. For sales teams to become a trusted advisor they first must earn the trust of their customer and that starts with a solid relationship. Once trust and a friendship are built it is much easier to open new accounts and then build on those accounts. Your newfound friend/customer will also be happy to supply you with the holy grail of leads, “REFERALS”. Companies need to make sure they have a proven sales process that combines the relationship building skills with the solution selling and closing skills into a great sales process that can be taught the same way over and over again to both new and experienced salespeople. To Maximize the results there needs to be a program of initial training and continuing education. Just like great sports teams need to practice the same is true with great sales teams. 4. Become highly organized In our research with thousands of salespeople over the years and studying what the top performers had in common, some had great personalities, some were highly motivated, some had amazing work efforts, some came from the industry, some were new to the industry. We found there was only one common thread among all of the high performing salespeople and that one thing was Organization. All the top performers where highly organized. They knew exactly where they were going each day. They kept excellent records on their customers and prospects and knew everything about them, from their personal lives to knowing what they needed to do their jobs better. They knew what happened in the previous call and what they needed to do in the next call. Having a great CRM system, teaching the sales team how to use it and having the managers follow up to ensure the salespeople are using it in the right way makes becoming organized much easier for your sales team. Building a new program and implementing change When we make changes, training and implementation of the desired new skills and programs always starts with the Sales Managers. If the Sales Managers are onboard, they will work hard to get the salespeople on board. Bring the Sales Managers into the program early and give them input into designing and developing the program. Once the program is developed, have the sales managers go out in the field and use it and get some success. Make iterations based on their feedback to fine tune the program and then train the managers how to teach the salespeople the program and the new skills they will need to be successful.

Perfect your elevator pitch. Research the interviewer. Practice your answers. Prepare challenging questions. Memorize the company’s mission statement. These are the first steps you’ll come across in a quick Google search for “Interview Tips.” Although such advice is essential for any interview, the real wow factor in any interview is you. Whether it be a case study, a pitch, or even just an in-depth behavioral interview, each firm has its own method for thoroughly interviewing a candidate. As a hiring manager, I have conducted what seems like hundreds of interviews, each evaluating a pre-prepared project that every candidate is free to develop however they choose. What candidates often misconstrue is that we are not evaluating how accurate their answers are but rather their ability to think through a problem and arrive at a solution. Thus, you can master the company’s purpose, list off an excellent pedigree of past experiences, or even have pi memorized; however, the crucial element of any interview are the so-called “soft skills” the candidate possesses. Being on the other side of the interview, I’ve seen firsthand that one’s process to getting to an answer is more important than the answer itself. The meaning and significance behind a previous role are more important than the job itself. One’s eloquence is more important than their ability to ramble off a list of questions or memorize a pitch. But most of all, I’ve witnessed that, for better or worse, how someone presents themselves on paper may be entirely different from the persona that they emulate in real life (or on Zoom). So next time you have an interview, stop and think about why you want the job itself and how you can let your personality and critical thinking skills shine.

Water Treatment programs for HVAC Systems can have a major impact on how efficiently facilities use energy and water while reducing their impact on health and the environment. ENERGY AND WATER EFFICIENCY The return on investment for Environment Friendly building, (Green Building) is closely linked with increased energy and water efficiency. In a typical facility, the energy used to operate HVAC systems accounts for 60% of utility costs. Water can easily total 5% of utility costs. Although water treatment is a small fraction of utility costs, the results received from water treatment programs have far-reaching impact in terms of operating costs, resource conservation, and reducing greenhouse gas emissions. MORE ENVIRONMENTALLY RESPONSIBLE CHEMICALS Certain chemicals and technologies are considered more environmentally responsible than others. For example, treatment chemicals that more readily degrade when discharged into the environment are less hazardous to manufacture or use, or have lower usage/ packaging requirements can be considered environmentally responsible. Solid water treatment systems in particular offer several green benefits over the liquids traditionally used. Solids contain less hazardous chemicals and require less packaging material. This reduces both landfill waste and shipping weight along with the energy usage and CO2 emissions associated with product delivery. Combined with ease of use, these factors can make solids an attractive alternative to liquid chemicals.While it is important to minimize chemical usage and use environmentally responsible chemicals, it is essential that Green water treatment programs provide similar or better results in terms of system protection and energy/water efficiency. Otherwise, the environmental benefits from reducing chemical usage will be offset by increased energy, water, and material usage. GREEN WATER TREATMENT The following are some benefits of an effective water treatment program supporting green building objectives: Maintain clean heat transfer surfaces. Consider pretreatment equipment, filtration, chemical cleaning, and treatment program upgrades to maintain and restore optimum heat transfer efficiency. Maintain the minimum blowdown rate consistent with good deposit control in boiler and cooling tower systems. Install equipment upgrades that allow reduced blowdown. Consider alternate makeup water sources like harvested rain water or air handler condensate. Install automatic feed and control systems that precisely apply treatment chemicals. Use web-enabled, data-logging controllers to monitor and log key treatment and system parameters. Use concentrates to minimize handling, packaging, and shipping requirements. Consider solid water treatment technologies The water treatment program for a building’s HVAC system is integral to the operation of energy, water, and resource efficient facilities. Obtaining optimum results from a water treatment program has huge economic payoffs and helps meet green building objectives.

The industrial distribution sector, which acts as a vital link between manufacturers and end-users, has experienced substantial growth in recent years. This article aims to explore the factors driving the growth of the industrial distribution sector and the evolving landscape it operates in. Increasing Industrialization and Infrastructure Development: The rapid pace of industrialization and infrastructure development worldwide has created a significant demand for industrial products and equipment. As emerging economies continue to invest in manufacturing and construction sectors, the need for reliable and efficient supply chains becomes paramount. Industrial distributors play a crucial role in ensuring timely delivery and availability of essential products, supporting the growth of industries and infrastructure projects. Technological Advancements and E-Commerce Adoption: The industrial distribution sector has not been immune to the digital revolution. Technological advancements and the widespread adoption of e-commerce platforms have transformed the way industrial products are sourced, procured, and distributed. Online marketplaces and digital platforms have streamlined the purchasing process, providing customers with greater convenience, transparency, and access to a wider range of products. Industrial distributors have adapted to this shift by establishing their digital presence, enabling them to reach a broader customer base and optimize their supply chains. Furthermore, contrary to initial concerns about e-commerce threatening the role of sales representatives, technological advancements and e-commerce adoption have actually aided sales reps in the industrial distribution sector. These digital platforms have empowered sales teams by providing them with valuable insights into customer preferences, purchase history, and real-time data, allowing them to personalize their interactions, offer targeted solutions, and build stronger customer relationships. E-commerce has become a valuable tool for sales reps to complement their expertise and enhance their effectiveness in serving customers in an increasingly digital landscape. Focus on Value-Added Services: To differentiate themselves in a competitive market, industrial distributors are increasingly offering value-added services to their customers. Beyond product distribution, these services encompass technical expertise, training programs, inventory management, and customized solutions tailored to specific industries or applications. By providing comprehensive support and solutions, industrial distributors enhance customer loyalty, deepen relationships, and become trusted partners in the success of their clients' businesses. Embracing Data Analytics and Supply Chain Optimization: The industrial distribution sector has recognized the power of data analytics and supply chain optimization in improving operational efficiency and customer satisfaction. With the proliferation of sensors, IoT devices, and advanced data analytics tools, distributors can collect and analyze vast amounts of data to gain insights into customer preferences, demand patterns, and supply chain performance. This data-driven approach enables them to optimize inventory management, reduce costs, and enhance the overall customer experience. Expansion into New Markets and Industries: Industrial distributors, fueled by the realization that market expansion can add substantial value, are increasingly reaching into new markets and industries, diversifying their customer base and product offerings. This expansion is driven by the desire to tap into emerging opportunities, mitigate risks associated with industry-specific fluctuations, and leverage synergies across different sectors. For example, distributors specializing in electrical components may extend their offerings to renewable energy or aerospace industries, capitalizing on the growing demand for these products. Emphasis on Sustainability and Green Solutions: As sustainability gains prominence across industries, the industrial distribution sector has responded by offering eco-friendly and energy-efficient products. Distributors are partnering with manufacturers that prioritize sustainability and providing customers with a range of green solutions. This aligns with the increasing focus on environmental responsibility and the demand for products that reduce carbon footprints, conserve resources, and comply with regulatory standards. The industrial distribution sector's remarkable growth is fueled by a convergence of factors, such as industrialization, technological advancements, e-commerce adoption, and value-added services. To tap into the immense potential of this thriving industry, businesses can actively participate and join in on its growth trajectory. By embracing digitalization, harnessing the power of data analytics, and optimizing supply chain operations, companies can position themselves to effectively meet evolving customer expectations and cater to diverse industries. Moreover, exploring opportunities to expand into new markets and embracing sustainability practices will further contribute to long-term success and innovation. Now is the time for businesses to take action, invest in the necessary technologies and partnerships, and align their strategies with the growth path of the industrial distribution sector. By doing so, they can secure a foothold in this dynamic industry and drive their own success while making a positive impact on industries worldwide.

You have been led to believe Company Mission and Vision Statements will align and motivate employees, while also convincing your customer base you work for them. Unfortunately, the fill in the blank exercises you run through with key leaders often result in several “statements” that tug and pull employees and customers in multiple directions- leaving them with no sense of understanding the intended message. Bring a new sense of commitment to your organization by dumping the outdated practices, drilling down to the rationale behind your company’s existence, and developing a focused Purpose. Bring in the key leaders… Again Discovering a focused purpose will require the inclusion of your team. Now I know many are thinking the same thing, “But we have already done this over and over!”. Surely you have, but if your Mission and/or Vision simply describes your products or services with a final homage to customer service, there is still work to be done. To those operating with a mission like this, it is not your fault. This formula promised you a boost in employee morale, customers crawling to your feet and a magic lamp with a genie who grants three wishes. Fine, maybe not that last part. Nevertheless, you were guaranteed massive ROI. What you were not told is sessions used to create powerful statements, while simple in theory, are difficult in practice. If not guided properly, the discussion will quickly derail and meander down paths that do not reach your ultimate purpose. Guiding the discussion Maintaining structure while simultaneously fostering a space for creativity is a balancing act the finest circus performer would struggle with. Open ended questions followed by periods of response from participants is the key to encouraging engagement and free flowing ideas that work toward a goal. Listen, then prompt deeper and more holistic thinking. Motivate your team to search beyond a product or service, beyond customers, and all the way to why the world needs your company. Employee Buy-in Sorry to bear bad news, but plastering a mission statement on your website and in your break rooms will not increase employee nor customer engagement. Rather it is the process of discovering your purpose in a structured way with employees that will earn you their trust. Though these sessions may feel costly in the short term, they are a critical component to gaining employee buy-in to the company's purpose. After all, they are going to be the ones who define it. Therefore, it is their contribution that guarantees their buy-in. While your guiding of their thought process ensures that contribution is beneficial. Customer buy-in If your employees are sold, your customers will be too. They can sense when employees believe what they are doing is bigger than themselves. Your customers haven’t the time nor inclination to read your website like a book. On the contrary, they want to spend little effort yet be left with a sense that your company is committed to creating a large impact. The right purpose stated clearly leaves your customer base with feelings of missing out, a need to act quick and that doing business with you is the obvious choice they have just discovered. Break away from hollow mission statements that fail to motivate employees or convince customers. Hold a session or two that fosters an environment of inclusion for your team, and guide the ones who know your business best to a powerful purpose. With the right sentiment and motivated workers, customers will begin to notice you as the right choice. If done correctly, the next statement your company makes will be the last for generations to come.

Mergers and acquisitions (M&A) have become fundamental strategies for organizations seeking growth, diversification, and competitive advantage in the modern business landscape. However, successfully integrating two distinct corporate cultures and workforces poses a significant challenge. Human capital, comprising employees’ skills, knowledge, and abilities, is a crucial asset that requires meticulous attention during this process. Here, we will explore the importance of human capital consulting in the aftermath of a merger or acquisition, emphasizing its role in facilitating smooth integration and maximizing the long-term value of the transaction. Introduction In today's fast-paced global economy, mergers and acquisitions have evolved into strategic tools for companies aiming to enhance market presence, access new technologies, and capitalize on synergies. While M&A transactions offer immense potential benefits, they also introduce complexities that demand careful planning and execution. One of the most intricate challenges is harmonizing the distinct human capital elements of the merging entities. Human capital consulting emerges as a critical component in this endeavor, helping organizations navigate the complexities and uncertainties accompanying such transformations. The Human Capital Role in M&A Human capital represents an organization’s workforce’s collective competencies, skills, knowledge, and experiences. It is the driving force behind innovation, productivity, and the business’s overall success. In an M&A scenario, two entities often bring their distinct human capital assets, each with its culture, work practices, and norms. Failure to manage this integration effectively can result in diminished morale, talent attrition, and a loss of institutional knowledge, undermining the merger’s potential benefits. Challenge in Human Capital Integration The integration of human capital is complex due to the potential clash of cultures, the need for new organizational structures, and adjustments to compensation and benefits frameworks. Employees may experience anxiety, uncertainty, and resistance to change, which can impede productivity and innovation. The merging entities may also have different performance management systems, communication styles, and leadership philosophies, further complicating the integration process. One aspect that is often overlooked is the importance of an integrated culture. An organization's culture defines how it lives out its purpose and fulfills its brand promise. Fewer than half of employees across all industries strongly agree that they know what makes their company unique and what makes it stand out from the competition. But what does that matter? Employees who rate their team's performance excellent are much more aware of the brand's distinctiveness, improving their performance by 65%. Additionally, the turnover rate significantly decreases; according to Gallup’s research, 71% of millennials who are confident they know what their organization stands for and how it differs from its competitors plan to stay with the company for a year or more. In contrast, that number falls to 30% for strongly disagree millennials. Therefore, a company's purpose needs to reflect its historical, ethical, emotional, and practical reasons for being in business. In a culture-oriented organization, everyone thinks and talks the same way about the company, from current and prospective employees to customers, shareholders, and industry influencers. Role of Human Capital Consulting Human capital consulting provides specialized expertise in managing workforce-related challenges during the post-M&A phase. These consultants collaborate with organizations to develop comprehensive integration strategies that address cultural differences, leadership alignment, communication plans, and talent retention initiatives. By conducting thorough assessments of the merging entities' human capital landscapes, consultants can identify areas of potential friction and design strategies to mitigate risks. Cultural Alignment: Human capital consultants assist in identifying the core values and cultural elements of both entities. They then work to align these aspects to create a shared vision, fostering a cohesive and motivated workforce. Cultural integration is vital for maintaining morale and ensuring employees feel valued and engaged. In a clear, consistent, aligned culture, leaders and managers inspire high commitment, which results in employees believing in and living out the organization's purpose in their daily work, ultimately delivering on the brand promise genuinely and powerfully. Leadership Development: Successful integration relies on effective leadership. Human capital consultants work with leadership teams to harmonize management styles, create a unified leadership structure, and ensure transparent organizational communication. Talent Retention: A significant risk in M&A scenarios is the loss of key talent. Human capital consultants develop retention strategies to identify and incentivize high-potential employees, ensuring continuity in critical roles and preserving institutional knowledge. Change Management: Consultants guide organizations through the change process, helping employees understand the rationale behind the merger and addressing their concerns. Clear communication and engagement are pivotal in minimizing resistance and facilitating a smoother transition. Strategy Alignment: Combining two companies and creating an ideal image is nearly impossible without aligned strategies. The success of a merger or acquisition is often measured over the long term. Aligned strategies provide a clear roadmap for achieving sustainable growth and performance. It helps avoid short-term gains that come at the expense of long-term viability. Strategy alignment aids in clear communication with all stakeholders, including employees, customers, investors, and suppliers. Employees work together to create, and there is a shift to a more hands-on approach with more engagement from key stakeholders. Overall, the strategic direction becomes well-defined, making it easier to convey the rationale behind the merger or acquisition, its benefits, and future plans. A company becomes future-focused, and the common path forward is clear. In conclusion, human capital consulting plays a pivotal role in facilitating the successful integration of organizations after a merger or acquisition. The harmonization of cultures, leadership alignment, talent retention, and change management are critical components that consultants address to maximize the long-term value of the transaction. Organizations that invest in human capital consulting demonstrate a commitment to preserving the strengths of each entity while capitalizing on synergies, ultimately positioning themselves for sustained growth and success in the dynamic business environment.

You have spent large sums of time, money, and resources developing your strategic plan. More than likely, you included a bright and shiny new mission statement, some sort of value promise, and an a la carte of however many other vogue frameworks available to business owners. Unfortunately, all the effort you just devoted to your new strategy will add little to no value if you neglect to monitor its execution. But how can you, the business owner, possibly expect to monitor the implementation of your new strategy while caught in the whirlwind of every day operations? Doing so is no easy task. There will most certainly be aches, pains, late nights, and early mornings (correlated to your current level of discipline, of course). But at the end of the day, you are a leader. When you decided to be one, you decided to serve those around you. You put yourself in a position others look to for guidance. If I just made you feel overwhelmed, I apologize, but I do have three actions you can take to help maintain focus on executing your strategy: Accountability, Example, and Consistency. Disclaimer: These actions are not something you do once. Rather, they must become a part of you if they are to provide any significant value. Moreover, this line of thinking presupposes you entered this article already understanding the absolute need to mentor those you lead and delegate workload to them. Watch for coming articles discussing mentorship and delegation, but I digress. Accountability You are the one who developed the strategy and, as a result, know it better than anyone else. Therefore, it is up to you to hold others accountable for how they manage their portion of the plan. However, let me be clear, accountability is not synonymous with punishment or micromanaging. Instead, accountability begins at the top, with you. It is your job to ensure you and your team maintain focus on the execution of your strategy in spite of the wave of incoming daily tasks. Example A dangerous potential side effect of maintaining accountability is an increase in workplace stress. The best way to remove feelings of ill will in those you serve, is to lead by example. Be the perfect representation of what you preach. Let your team see the strategy was not designed for making more money at their expense, but for making a better company. A company they are a part of. Leading by example is a sure way to inspire others to perform at their highest level. Consistency Lastly, we have the most important action. It is also the most difficult because it requires you to ignore how you feel, forget about your bad day, and bring the same level of performance day, after day, after day, and oh yeah, the next day too. Once you allow flexibility in your expectations, the more flexible they will become and the importance of the strategy will grow increasingly less clear. What you demand today is what you must demand tomorrow, and so on. There is much that goes into the development of your strategy, do not allow all those efforts to be for nothing. Your plan is sound and your team is strong, monitor execution and enjoy the change that is important to you.

M&A Strategy: Aligning the buyer type to your desired outcomes. We often get questions from our clients regarding the types of buyers in today’s market and what attributes they look for in potential acquisitions. They also want to understand the implications of getting bought and what they should expect from one type of buyer vs another. Admittedly, it can get confusing with the different terms such as PE, VC, Family Office and Strategics. As you consider selling your business, its important to consider your future goals and current business situation against the objectives of the different buyer categories; there needs to be alignment for all parties to win. Here is my breakdown of the buyer types for private companies and the focus of each. Firstly, there are some common factors across all potential buyers which drives the valuations and thus price – these were covered well in a recent post by @Chris Rolfe where he describes the key considerations that come into play when a buyer prepares an offer. Private Equity (PE’s) firms are the first type of buyer and very active in this dynamic market. A Private Equity (PE) organization is an investor that invests other people’s money for the purpose of generating a return on that capital. PE’s market their funds to investors with a defined purpose, projected returns they expect to achieve and within a specific timeframe (ie 7 years). A traditional PE firm will raise a fund with multiple Limited Partners (LPs), which may beendowments, institutions, pension funds, and/or high net worth individuals, who all contribute to the fund. This capital is then used to acquire a majority stake in a company and scale growth over a predetermined period of time. PE firms are either looking for platforms where they can back a great management team to then grow the company organically and through acquisitions typically over a 5 to 7 year time horizon and then sell the company to a strategic buyer or larger PE firm. PE firms are also looking for tuck-ins to the existing platforms they already own. The common misconception is that PE firms will come in and cut your staff and make major changes. Normally this is not the case;the PE firms are looking to grow sales and EBITDA as fast as they can to build the business. Normally they look for situations to use their capital to ignite growth in successful businesses and keep the team, culture and infrastructure intact. Considering a PE firm as a buyer is well aligned to companies that need serious capital to drive growth and can benefit from the financial discipline that a PE firm will bring to major decisions and also financial reporting. Remember that the pressure is on to generate a return within a specific timeframe and that pressure is passed down to the acquired leadership team. The second category of buyers are the “Strategics” Strategic buyers are companies that already operate in a similar or adjacent industry segment. They are interested in acquisitions to further their existing business or to diversify in an adjacent business where they have competencies. They are interested in acquiring: Business IP and assets to supplement their current business (ie expand/ enrich their offering) Customer portfolios to accelerate their growth and the underlying demand to soak up their capacity New geographies to expand in new markets Capacity to satisfy their own growth constraints Strategic investors will be more interested (than PE’s) in merging the operations and assets of the new entity and less interested in the existing management team; their focus is on furthering their strategic vision, growth goals and achieving synergies. The third category of buyer are Family Offices A family office can take on many forms, but ultimately can be defined as an organization made up of a high net worth individual (single family office) or a pool of wealthy individuals (multi-family office) that deploys its own capital to make direct investments in private companies. Their key goal is to create generational wealth that can be passed down through the family. The biggest difference between private equity and a family office is the source of capital, and this drives many other behavioral differences such as financial discipline, speed of change, and focus; a PE will be all about the financial performance where a Family Office will also care about purpose and the impact of key decisions related to social causes, the environment or the individuals running the company. The other difference with a Family Office is the timeline of the investment which is longer than a PE; A Family Office typically targets a 10 - 12 year investment horizon and with that patience comes more creativity in techniques used to drive growth and profitability. A Family Office and PE’s are similar in that they have a lot of interest in the quality of the leadership team and keeping it intact during the investment period. In addition, where a PE may insert a leader to join the acquisitions’ management team, a Family Office acts more like a Board member capable of “leaning in” and using their deep experience to solve problems, identify opportunities and implement best practices. Acquisitions involving a Family Office are well aligned to companies with: Aging owners that have good leadership teams that want to buy-out the owner but lack the capital. Great growth potential but require capital and management experience to capture the next opportunity and establish Infrastructure to scale quickly. Acquisition by a Family Office is not suited to companies where the owner wants a quick exit but has no succession plan in place. The final take-away Selling your business is one of the biggest decisions of your lifetime. Invest the time to really think through your short-term priorities and the medium-term outcomes. Finding the right type of buyer that aligns with your objectives and culture can make all the difference between success and years of pain.