Deloitte announced 50 Best Managed Companies

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The winners of Canada’s 50 Best Managed Companies for 2010 are setting the pace for Canadian business by putting growth back on the agenda.

Canada’s 50 Best Managed Companies continues to be the mark of excellence for Canadian-owned and managed private companies with revenues over $10 million. Every year, since the launch of the program in 1993, hundreds of entrepreneurial companies have competed for this designation in a rigorous and independent process that evaluates their management skills and practices. Fifty of the country’s leading private organizations, spanning a wide array of industries, have earned the distinction of Best Managed Company from Deloitte, one of Canada’s leading professional services firms, provides audit, tax, consulting, and financial advisory services.

“After two years of shoring up, deleveraging balance sheets and focusing on cost reduction strategies, Canadian businesses now have growth back on the agenda,” said John Hughes, Deloitte partner, Private Company Services, and national leader of Canada’s 50 Best Managed Companies Program. “Clearly we’re not out of the woods yet, but one of the most impressive aspects of this year’s award recipients is the focus of management teams and employees on growth and investment.”

Combined, 2010’s 50 Best Managed Companies generated $11.5 billion in revenue and employed over 52,000 Canadians. Growth means different things to different companies and the following are just some of the ways Canada’s Best Managed Companies are directing their CEOs and management teams to drive higher revenue and profit in the years to come.

“Sustainability and adaptability have been the hallmarks of these companies,” Hughes says. “They aren’t companies who have had a good year because of a technological innovation or a new product, they’ve built the business over many years by growing where they felt they had a market opportunity.”
“When we look at best managed companies through our process, questionnaire and onsite interview, we ask two questions,” says Hughes. “Where do we want to play and where do we win? Part of the evaluation process for best managed is to evaluate how companies are articulating the answer to those two questions and how they have aligned their resources to execute those strategies.”

The overall theme of the list is that growth is back on the agenda.

“The interesting thing about growth now is that private companies have all the options that public companies do; they can merge, they can explore IPO options, they can go to other parts of Asia and South America, and attune to what is happening globally. If you think back to 18 years ago, there was no Internet, no BlackBerrys, and companies were working much more localized. Technology, globalization, speed of innovation, changing consumer taste, [have all] driven these companies to be global competitors.”

Mergers and acquisitions

Hughes notes that companies are focusing in again on merger and acquisition activities now that liquidity is available once again and capital is once again available. Companies which have weathered the storm and have maintained solid core businesses, and those with realistic valuations and multiples will become attractive return on investments opportunities for private companies.

“I think now, best managed in general have always been on the lookout for mergers and acquisitions or joint venture alliances partnerships to grow their business and that is certainly not off their agenda, having said that it would be a multiple now in terms of pipeline,” says Hughes. “During the last couple of years, liquidity dried up, companies had to stop and really ask where they want to be. They reset the business model, reset the dial and figure out which business we want to be in.”

A continuing theme for Canadian private companies is managing their exposure to the U.S. market. Many companies see this as a huge opportunity to capture market share, grow revenue, relocate manufacturing facilities and engage in M&A activities. On the flipside, another emerging theme is Best Managed Companies’ desire to reduce their exposure to the U.S., and pursue acquisitions or other collaborative investments such as joint ventures and alliances on a global scale, with growing interest in South America, Europe, China and other parts of Southeast Asia.

Helping its customers weather the last year was a key focus of Best Managed Companies. While many companies focused internally, this year’s winners concentrated on their customers’ issues and how to solve them as a means of strengthening their own business. Holt Renfrew, one of the winners, has made a considerable push toward increasing customer service, having hired more staff at its nine department stores across the country, boosting service levels by 10 to 25 per cent in various store areas.

“The strength of our business is directly correlated to the strength of those relationships,” Holt Renfrew President Mark Derbyshire told the National Post. “You won’t be loyal when you don’t get good service.”

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