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Putting lipstick on the gorilla? I don’t think so.

It will come of no surprise to anyone that mergers and acquisitions are notoriously difficult to deliver on the synergies predicted by the advisors and analysts. It may surprise most when I predict that Kraft is in a good position to buck the trend.

It’s my view that M&A’s are driven by 3 key assets – brand, people & customers. Of course, none of these assets are mutually exclusive and, in fact, it’s the people within organisations that build great brands which attract and retain loyal customers and attract and retain great people. In other words, the rationale for an acqusition is a virtuous cycle that starts and ends with people.

I think Kraft get this. At the time of their acquisition of the French Danone biscuits business two years ago at, Kraft was criticised for taking over a great national brand and draining money out of France. Sound familiar?

Kraft responded by promising not to close any of the Danone biscuit manufacturing facilities in France for at least three years. They have not only delivered on that promise they have made further commitments. They have recently announced plans to invest €15m in a new innovation centre for biscuits, positioning France at the centre of innovation in a strong European market – a great example of asset building, not asset stripping.

So my optimistic prediction comes from the fact that Kraft has a strong track record on delivery and an equally strong commitment to social responsibility, how can they fail?

Well, I suppose they could always do one or more of the following:-
1. fail to create an inspiring and compelling vision for employees
2. fail to communicate their commitment and plans on how they will achieve this vision
3. fail to demonstrate and communicate quick wins
4. fail to identify and share the pockets of best practice from both businesses
5. fail to remove obstacles to success
6. fail to lead and support their colleagues through the transition.

Each of these are disastrous in their own right but any combination of the above would be even more disastrous than failing to deliver on their existing commitment to the 2012 Olympics.

So, if Kraft are planning to divert even a fraction of the £20m pledge to LOCOG I would advise them to come clean, quickly.

I could also advise them on successful integration, providing a significantly larger ROI for shareholders and greater economic benefit to the UK.

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