[avatar user=”williambentley” size=”160″ align=”left”]Bill Bentley
Editor-in-Chief[/avatar]
Arctic Glacier (AG) has been sold. And, I believe the sale to The Carlyle Group (CG) is good for our industry for at least two reasons. The first is the purchaser, Carlyle Global Partners, Carlyle Group’s long-duration investment fund. Some industries/companies are rightly situated to do the three year private equity fund flip. I believe H.I.G. Capital bought AG five years ago with that traditional formula in mind but found the investment needed more time to extract maximum value. To their credit, after a thorough strategic analysis of AG and the industry, H.I.G. and its management team decided to support a long term strategy even though it probably realized it would not be keeping AG for the full time needed to complete the strategy. In the Carlyle Group news release (available to read in our Industry Updates section) Fred Smagorinsky, CEO, said, “H.I.G. Capital has fully supported the execution of our strategy and made significant investments in our business over the course of its ownership. Our management team is excited to begin the next phase of our growth…” The industry should thank H.I.G. Capital for their vision and commitment.
The second reason I believe this transaction is good for the packaged ice industry is Carlyle Global Partner’s decision to keep the present AG management team. Looking at the long term and supporting the present management to grow the business kind of reminds me of the strategy you read Warren Buffet’s Berkshire Hathaway using. Mr. Smagorinsky continues, “Carlyle’s long-term investment vision, substantial supportive resources and collaborative approach will be tremendous assets for Arctic Glacier as we pursue our mission…” With this acquisition the industry is moving further away from the disruptions in the past eight to ten years that have not allowed the industry to focus on growth in the way that it should.
Let me say that my opinion of the positive moves made by CG in no way are meant to diminish the other companies in the industry that are following their strategies to successfully prosper and grow their businesses. It’s just good news and a positive step for our industry that this has happened. Again, please read the News Release in the Industry Updates section of this issue to get the full text.
So how do you compete against this well-funded, longer term focused new owner of Arctic Glacier? Probably, just as you have in the past: by staying focused, by building great customer relationships, and, most importantly, by moving your company forward with the help of strong employees and a development program to keep them with you. Good employees are an integral part of your company’s success. When employees see that you want to make them more valuable to the company, and that they’re worth investing in, they generally become more engaged, motivated and committed to your organization’s success.
Knowing who your best employees are begins with knowing what your goals are. And that becomes evident after you determine your company’s immediate and long-term strategic goals. Examples of long-term strategic goals could be improving customer satisfaction or reducing product waste or increasing labor productivity or expanding your product offerings (more bag sizes) or growing your customer base. Maybe it is several of these.
Then, with your goals in mind (and preferably written down), you need to focus on the human side of things and decide these things: what are the best ways to build the expertise(s) and skills to reach your goal?; which department(s) get top priority?; what skills must an employee have to advance my strategy?; can the employees I have now help reach my goal(s) and needs?; who in my company shows the greatest potential for helping meet my goals?; are any of my current employees impeding progress?; and, where are the gaps and how do I fill them? It’s important to distinguish between current and future needs, and to establish a timetable of satisfying them.
Once identified, how do you keep those people in your organization you’ve identified as important to the success of your business? It’s by doing two things. First, it’s through direct communication and open discussion about your strategic goals and how your employee fits into your vision of achieving those goals. They need to understand why they were chosen. You also need to make sure they perceive working on this goal meets their long term ambition and development needs. Second, develop a training/mentoring program. After all your hard work so far to identifying these important people and talking with them, do not just give them the task and let them go at it on their own without a way to know how they are doing and if they are succeeding. They need to be continuously monitored for their growth. You both need each other’s feedback to become successful.
One way to manage this development is similar to how you manage your food safety programs – create a spreadsheet. Put the names of those you have identified on one axis and the steps and training needed to reach the goal on the other axis. Add dates for completion to each task. Doing this will help you identify if your goals and personnel choices fit the need. If not, it will help you to decide to look for another way to achieve success with that goal. Again, just as with a food safety program, if you don’t measure it, it won’t happen. If you do, success will seem a lot easier.
Did you go to your association’s meeting this spring? I did. Did you bring any of your ideas up during the town hall meeting part of the program? Did you talk to the suppliers that are there and buy from them? If you did, together I’ll bet you came up with some real goals, programs and solutions everyone benefited from. I’m no longer directly in the packaged ice business and I learned a lot.
It’s still an exciting and very challenging time to be in the ice business. Please send your comments and responses to billb@graphicvisions.com or call me at (800) 528-6679.
Thanks and Cheers!