Archive for June, 2008

Book Review: Blue Ocean Strategy

June 24th, 2008 Comments off

     Although it wasn’t on my short-term list of reads, I’ve been reading Blue Ocean Strategy by W. Chan Kim.  Although I still have a couple of chapters to go I couldn’t resist posting a small write-up about the book.  The basic premise behind the book is the strategic position of a company to create “Blue Ocean” opportunities to create a long-term advantage.  The “Blue Ocean” strategies are those that are beyond just modifying an existing market, but creating brand new markets.  The book goes into analyzing countless examples, which include companies such as Starbucks, Blockbuster Video, CEMEX, ExecuJet, and a host of others.  While some of these companies are currently struggling and and attempting to reposition themselves, the basic premise is about creating a new market. It also goes into discussing the differences between a “Blue Ocean” and a “Red Ocean”, the latter being a market that is driven by high competition, price competitiveness, and lower resulting margins.  Definitely worth your time to pick-up and read.

Categories: Book Reviews, CorpFin Cafe, Management Tags:

The Cat that came back….

June 18th, 2008 Comments off

     We’ve all had the experience of working within an organization that was highly silo’d and breaking through to other departments was a virtual impossibility.  More frustrating is when you’re tasked with developing, and delivering on a project that requires the participation and cooperation of those departments that won’t even respond back to you.  And when they finally do respond back it’s to tell you that your data is garbage and “not consistent with what they already know”.

     In an article titled “The Cat That Came Back”, authors Gary Neilson and Bruce Pasternack profile the amazing turnaround of Caterpillar and their transition from a heavy siloed operation to one of improved decision rights, information flow, renewed motivators, and an improved structure.  While the article was written in August of 2005, the information contained in the article is just as valid today as it was then.

     This is a huge topic to capture in a single blog entry so I would encourage you to download the article from the Strategy+Business site (Booz /Allen / Hamilton) and read about the transition that $30 billion company went through and ask yourself…”what’s stopping my own company from effecting similar change?”  More than likely you’re at a much smaller company that can effect that change quicker.  I know, as one of the companies I worked with broke down some of those same barriers and increased EBIT levels at a growth rate of almost 4x that of our revenues, without decreasing headcounts.

Thanks for reading…..

 Jeffrey Ishmael

Categories: CorpFin Cafe, Management, Projects Tags:

Developing relationships & not just transactions in M&A…

June 4th, 2008 Comments off

     I’ve had the opportunity to be involved in a number of M&A deals and there was no one deal that was alike. All involved extensive effort and detailed work with the incumbent management team. However, there was one deal that I had the pleasure, and I do mean pleasure, to work on.  I believe that the work I did on this one particular project will shape my approach to future deals and how I work with potential acquisition targets.

     One of the CFO’s I had worked with asked me to meet with one of the V.P.’s within our company who wanted to present a potential acquisition for the business unit he was responsible for.  The target in mind was a small service-based business in the Southeast who he had been using for some 3rd party installation services. It was simply being viewed as a “review of the financials, do the deal, and bolt it on….”  Ummm, right…..

 Read my full commentary at CorpFinCafe