It is our values that define us. This is true of individuals, and it is also true of corporations.
Look at most strategic planning processes, and they will begin with some exploration of mission, vision and values. What these are, how they are crafted and what they mean, however, is a matter of conjecture. As has been demonstrated by many writers and researchers, vision and mission statements are frequently sufficiently generic as to be at best uninspiring, and at worst meaningless.
Rarer still is any discussion of purpose or values when corporate mergers and acquisitions appear on the horizon. The discussions tend to be limited to ‘maximizing shareholder value’, which is typically code for ‘getting a really good price’. Corporations are often acquired not for who they are as a whole, but for the value of their parts once cleaved off, shined up and sold. Offers are assessed on whether or not it’s a good price now, and not on the potential gain—or loss—of value in the future.
It was particularly noteworthy, then, to read the narrative in today’s Globe and Mail summarizing the process by which Burger King sought to acquire Tim Horton’s, beloved home of the Timbit and the double-double (full disclosure: I take my coffee black, but am awfully partial to sour cream-glazed Timbits). The initial offer on the Berkshire Hathaway supported bid from Burger King was $73 per share in March, a number that was quickly rejected by the board of Tim Hortons as being inadequate. This increased to $78 per share in May, and $82.50 per share in June. Both offers were again declined. The final share price offered was $88.50 in August.
What is fascinating about the deliberations was the strategic assessment by Tim Hortons’ board and executive throughout this process. They had a belief in their existing strategic plan, and the vision and direction they were charting for the organization. Their confidence in their future meant that, at earlier offers, there was a conviction that Tim Hortons could be more successful through continuing to independently follow their current strategy.
Even more important was their commitment to the values and core principles of Tim Hortons as an organization, and the respect and consideration for the impact on all stakeholders. These included not just its shareholders but also its franchisees, its staff, its customers and, impressively,e the people of Canada. Values were central to how Tim Hortons approached the transaction. Embedded in the transaction agreements—and enforceable by the government of Canada¬—was a commitment to maintain the brand, to maintain a substantial executive presence in Canada and to maintain a listing on the Toronto stock exchange. Perhaps most significant was the commitment to not raise franchisee rents or royalties for a period of five years.
Canadians know and identify with Tim Hortons. More importantly, Tim Hortons as an organization knows who it is, where it is going, the values and principles by which it operates. Above all, it knows why all of those things are important, and it is prepared to follow through. Tim Hortons was prepared to walk away from a deal worth billions unless it delivered significantly more value than could be realized through its current strategic plan, and unless its core principles were respected.
It is unfortunate that we don’t see similar stories play out in other acquisitions. But it is inspiring to see it here. There is value in vision. There is significance in strategy. And there is a great deal to be said for being clear about who you are, what you stand for, and the value that you intrinsically posses.
