Bob Davis, business development manager, AME:
The problems with acquisitions often centre on integration, and the Bakers are not unusual in finding that things have not worked out as originally planned. The merging of two cultures is difficult, and a lot of time will need to be spent on creating a new culture. To help, they should look at putting the company in one place, as it will be almost impossible to develop a new culture with different sites.
A study of both operations should be undertaken. Value-stream mapping could be used to establish whether one of the existing sites is suitable for the entire company. If, at worst, the study revealed that a new site was required, the mapping would probably have identified many wasteful activities, which, once removed, would lead to big cost savings.
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The Bakers should consider using the DTI’s Manufacturing Advisory Service to help pay for consultants to advise them on value-stream mapping and developing a new culture.
Find a better way of recruiting
Craig Rowland, managing director, BT Business:
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Trio’s practice of using employee referrals is a sign of the staff’s commitment to the company. But, as it grows, finding new workers through word of mouth will no longer suffice. The company needs to maximise employee productivity and flexibility while minimising the time taken to train new workers. To do this it needs more formal recruitment and training programmes.
By advertising vacancies in the local media and using job- centres, Trio should be able to attract potential candidates from a wider pool. To minimise staff turnover, the job descriptions should explain exactly what Trio does.
With potential employees identified, Trio then needs to apply basic, but formal, assessment criteria. It is possible to buy aptitude tests off the shelf from specialist suppliers, and the results are generally superior to subjective interview-based selection techniques.
Having small clients will spread the risk
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Paul Gostick, international chairman, Chartered Institute of Marketing:
Despite Anne Baker’s assertion that Trio can comfortably handle £2m contracts, she should be careful about considering single contracts that represent more than 40% of the business, as this could pose a big risk and lead to financial exposure.
If the Bakers want to sell the company, Trio will need to stand out from other businesses for sale, and a strong brand name will be a key asset. However, it will be difficult to establish a solid brand if the company conisists of two separate businesses, each clinging to its own identity.
Both divisions of the newly merged company will have their own range of skills, bringing a raft of benefits to the united business. But the Bakers should do all they can to ensure that the values and motivations of each are the same.
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Inviting both teams to share their thoughts on what the company means to them may throw up a few surprises but could provide some solid ideas for a rebranding programme.
Appoint a new chief executive
Manny Gatt, managing director, Business Link, Nottinghamshire:
Succession is a problem for all businesses, but especially for family firms. A carefully planned exit strategy will help to manage the change. The firm’s identity and culture come from being a family business, so for continuity’s sake it could be beneficial for this tradition to be continued.
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One option would be to groom a family member to take on the role of chief executive — a single successor tends to be most effective. This would be a difficult decision that required objectivity to reduce the chances of future conflict. There are ways in which the Bakers could be financially fair to the other family members in the business.
The potential successor should already have an in-depth understanding of the business and demonstrate the leadership and skills — as well as the vision — needed to take the firm forward at this time of change. He or she will also need the full support of the others in the company.
Integrate the two firms
Professor Richard Scase, author of Living in the Corporate Zoo:
Although profits have leapt since the merger, still bigger benefits could be gained. Operating from two sites is an expensive way to do things. Creative ideas are needed across the whole of the business if the product portfolio is to be expanded. At present staff see themselves as working in two distinct and separate businesses.
The Bakers need to communicate their vision and strategies for growth, and staff in the acquired business need to feel engaged in the objectives of the family team.
Appointing one of the acquired staff as a marketing director would be a signal to both staff and customers that the business is changing its culture — that it is a market-focused manufacturer of quality print products and not simply a sign-writing jobbing firm.
This message in the marketplace is crucial if sales are to rise to £6m over the next two years. It will also differentiate Trio from other small signwriting firms.
Fully research your market
Alistair Baker, managing director, Microsoft UK:
If the market is in transition, there are three options — evolve, get out now or die. Before Trio can focus on managed growth, it needs to figure out what forces are at play and how each will affect its growth.
Has the firm lost focus with its acquisition and integration? Has competition intensified? Is the market growing or declining? Is it changing direction? Only through a comprehensive analysis of such factors can Trio make the right decisions on where its growth potential lies.
Assuming that the market is not disappearing because of new technology, Trio needs to manage growth by finding work that will be highly profitable and make sure that it can fulfil all the orders that come its way.
Keeping existing customers happy with great service and by marketing an extended portfolio to them, while finding new customers through marketing campaigns, should provide Trio with growth that is manageable.