Oops, we did it again

"Empty shelves, aliented customers and huge losses: How the Safeway takeover went from "Coup" to Crisis." (Financial Post)

Sobey's takeover of western Canada's Safeway grocery chain at the time of the transaction was regarded as a strategic coup for Sobey's. What happened is textbook for anyone considering an integration. 

Chapter 1. The Numbers "The Safeway acquisition made sense from a numbers perspective: Quantitatively, it was a good deal" Sylvain Charlebois (Dean of Management, Dalhousie University). 

Chapter 2. The Customer " The customer base at Safeway was very loyal to the stores" Charlebois said. "And Sobeys got rid of a lot of the things that those consumers really cared about".

Chapter 3. The Consumer "At the same time, national competition had only stepped up. As the oilpatch economy dwindled consumers began buying more goods at discounters like No Frills and Walmart".

Chapter 4. The People "Employee sentiment further declined after Sobeys centralized its western Canadian head office functions in a building in Calgary from regional offices in Victoria, Edmonton and Winnipeg".

Chapter 5. The Process "... the acquiring company too often has made an incorrect assumption that all of its processes are superior to that of the one it is acquiring" (Keith McIntyre, KMAC Group).

Chapter 6. The Result "Empire (Sobeys) took a $1.3 billion impairment charge in the quarter, just months after it took a third quarter writedown of $1.59 billion related to the value of Safeway."

I have been a part of exceptional executive teams who have executed successful M&A integration strategies across North America and globally.  Common to the success of those teams has been a focus on growth and value. That focus is anchored by a clear understanding that each organization has a unique set of value drivers and those value drivers operated as a system. Any change to one value driver without consideration to the whole system impacts the financial well being of the organization.