CRG Partners increases European practice through Smith & Williamson alliance

As announced last week, CRG Partners has entered into a strategic alliance with the United Kingdom’s Smith & Williamson Limited, a financial services group with preeminent experience in restructuring and recovery within Europe. We expect this relationship will be mutually beneficial, as it will enable us to expand our respective practices. To this end, we will jointly pursue marketing opportunities and share professional and infrastructure resources to support client engagements.

Smith & Williamson was looking to support its efforts serving as fiduciaries for distressed funds having administrative activities in the Caribbean and assets in North America. Specifically, they were looking to better support their fiduciary responsibilities through an ability to manage distressed assets in North America. Their preferred method was to align themselves with a leading and established turnaround and restructuring firm in the U.S. With this in mind, they approached us about a strategic alliance.

Upon discussing and understanding the proposed idea with Smith & Williamson, we recognized the reciprocal benefit of such an alliance, which would increase our own restructuring efforts in Western Europe. We believe this will enable us to continue to grow our presence abroad and meet the ever-increasing demand of our North American clients’ overseas activities as well as the activities of our European-based clients.

An international presence is an important component to many of our clients’ businesses. CRG Partners’ alliance with Smith & Williamson will further our ability to provide our clients with the same outstanding service and high-quality professionals they expect from us, with a greater geographical reach. More.

Do not settle for mediocrity
Gene Baldwin

If you’ve been following Starbucks Coffee Company in the news lately, you’ve probably noticed that things are a little different at this seemingly ubiquitous coffeehouse chain. Since Starbucks went public in 1992 with under 200 locations, it has grown like kudzu in Georgia. With nearly 16,000 stores in 44 countries, Starbucks has built a strong brand for designer coffee drinks and great customer service. But recently Starbucks’ sales have not been as strong.

Faced with a tougher operating environment, the Starbucks Board of Directors brought back its former CEO, Howard Schultz, to retake his old position, and they began re-evaluating the Starbucks brand. Schultz quickly implemented a comprehensive turnaround strategy. Some of the key initiatives included: restoring free Wi-Fi service, stopping the warm sandwich rollout and slowing store growth.

Perhaps the most significant step was to retrain the Starbucks workforce to make coffee drinks properly. For many years, this skill was considered to be one of Starbucks’ core competencies, but in Schultz’s opinion, it was something the company had lost or damaged. To address this, all Starbucks shops closed down for three hours on February 26 for training.

It takes a lot of guts to turn down three hours of revenue in 7,100 stores and pay 135,000 employees to relearn their jobs; and it has significant implications for Starbucks’ customers, employees and management.

First, let’s discuss the implications on customers. There must have been something in Starbucks’ research, customer comments, or focus groups that told it that core customers were no longer as satisfied with their coffee experience. Surely Starbucks would not have closed down completely without a clear indication that something was wrong and that it needed to be fixed immediately. Even though some customers were inconvenienced by the temporary closing, Schultz must have reasoned that it would improve the customer experience overall. If a customer’s recent coffee experience had not been favorable, publicizing and then executing a comprehensive retraining program might provide those core customers with an opportunity to re-experience Starbucks. If that strategy works, then Schultz will have accomplished two goals in one action. He will have improved operations and increased customer counts. With a better experience, customers may increase their visits and overall sales volumes will return to a positive trend. This strategy simplifies and focuses Schultz’s view of Starbucks as a coffeehouse -- not a sandwich shop or music store. Schultz’s way of thinking is vital for any company that is evaluating its brand: Determine what your core competency is and stay focused on it.

Secondly, Schultz’s strategy will dramatically impact employees. Over the last 15 years, thousands of employees have come and gone from Starbucks. With the original management gone and new products being introduced constantly, rank-and-file employees can lose or misplace the essential mission of the company. The retraining process galvanizes everyone’s focus on the excellent execution of Starbucks’ coffee products.

Finally, the retraining should affect all layers of management. With this move, top management has made it clear that Starbucks stands or falls on its coffee offerings. The CEO has set himself up as the guardian of that policy and as long as he is the CEO, that will be the mission of Starbucks. It takes a special conviction to take that stand in the face of pressures to improve same store sales by whatever means possible. I am not saying increasing same store sales is not important, but it cannot trump excellent execution, operational focus and profitability because without the basics, you cannot build a lasting brand.

As a business owner or manager, you can learn some valuable lessons from Howard Schultz. Ask questions of your company, such as: Who is the uardian of our products, services, core beliefs and values? Who is listening carefully to our customers to ensure they receive the best shopping experience? Who is reviewing product offerings and prices to make sure they present a compelling proposition? The answers were critically important to Howard Schultz and they should be for you as well.

Working on these operational imperatives is not as sexy as opening new markets, making an acquisition or completing a public offering, but in many ways it is more important. It is necessary to re-evaluate your brand from time to time.

Gene Baldwin is a partner of CRG Partners. He is a frequent speaker at restaurant finance conferences and has authored numerous articles about the operational and financial management of multi-unit retail businesses. More about Gene Baldwin.