Comments

In one right now at work (about a year on) Plus been through several in my company.

Success factor?

The one thing all the analysts don't talk about.
The one thing that gets ignored when planning.
The one thing you can't budget for.
Nothing to do with products
Nothing to do with "strategic vision"
Nothing to do with internal systems integration

Culture pure and simple - Get that right and gutsy, coal face based people can get around all the other difficulties and make it a success.

The most important people? - the ones doing the work (obviously) and the first line management. These two groups make or break a merger. These are the people who while snr managers are fighting their turf wars still work with the old customers "because it is the right thing to do"

These are the people who take double the admin workload because of different systems/procedures and still produce the goods.

Take all of the management energy you normally direct at supporting your people (which should already be significant) and triple it. Be there for them.

Posted by PaulH at June 10, 2005 1:36 PM

Paul, I agree with what you're saying here, but I think what you're talking about is honor and a work ethic which are personal values some people hold dear and have nothing to do with "culture" which is becoming synonomous with conformity.

Sounds like you work for a nice company. Good luck!

Posted by Noel Guinane at June 10, 2005 2:45 PM

Perhaps you are right Noel. Maybe I should have split the post into the culture part and the work ethic part. Personally I believe in both.

I do believe company culture makes or breaks a merger more often than anything else. If you merge a high drive short term results driven company with a supportive long term oriented one you are going to get a big mess and something is going to have to give.

I still think the best advice is look out for your people. That's obvious isn't it? well no it actually takes and extrodinary amount of inner strength for a leader to do this in the face of personal uncertainty. Thinking of your people when you don't know about your own job takes guts (and I fall short on my own advice here sometimes)

Posted by PaulH at June 10, 2005 3:04 PM

Of those who aspire to being their best, who doesn't fall short sometimes? Paul, good for you for trying. Most people don't bother anymore - they just protect their own backsides. But who has respect for people like that?

Posted by Noel Guinane at June 10, 2005 3:30 PM

I've been through a lot of them - both sides of the fence. Many don't work because they're done for the wrong reason (two drunks climbing into a crappy car trying to find their way home). Things that I've seen that work:

1. Focus relently on the customer. Understand where the combined companies are vulnerable (service gaps, competitors, distractions), and hold individuals throughout the leadership structure (preferably surviors) accountable for positive outcome. Customers don't care about internal politics unless they hose up good relationships or service.

2. Pay attention to the solid performers as well as the superstars. Make sure you know who they are; listen to them, and meet their needs. Good associates have choices. Many of the quiet ones do more than meet the eye and have power that is not on the org chart.

3. Be decisive. Understand the big issues and make decisions quickly. Don't get stuck in an endless debate about stupid things that should have been decided in about three minutes. Everyone can't participate in every decision.

4. Figure out the culture and where the disconnects are. Engage the right people from all levels of both sides to sort them out.

5. Find and eliminate the derailers quickly. One loud disgruntled malcontent can throw an entire function off track.

6. Don't jack employees around. Tell them the truth - even if it hurts - as soon as possible. Build the budget to treat people respectfully. Nobody with half a brain expects corporate welfare, but everyone, including top performers (who usually have many choices about where to work), will be making decisions about trust and how deep to engage.

7. Force the political battles and clear out the carnage as quickly as possible. The longer it goes on, the higher the stakes and the harder it becomes to focus externally where it matters.

8. Communicate - honestly, fairly, frequently.

Posted by Tom C. at June 12, 2005 11:02 AM

These are my key learnings. I believe it's all about 'people'.

1. Lots of uncertainty.
Strategy - How can the 'uncertainty' element be addressed most effectively? (employees and customers)

2. Make everyone feel a part of ONE team - no 'outsider'/'them'& 'us' feeling (try to minimize this as far as possible).

3. Build trust through actions and show respect.

4. Respond fast to avoid ambiguity.

5. Communicate..Communicate..Communicate

a. Frequent corporate communication - special emphasis on good news.

b. Frequent individual communication from supervisors - Why are you important to us? How would you fit best into the picture and continue to grow?

c. Frequent direct/face to face interactions with the executive leadership team (employees and customers).

Posted by Tojo Eapen at June 13, 2005 12:04 AM

Tom C., what you say seems to makes sense. Have you been in a situation where the other company had the upper hand in the deal, but your people were stronger managers? If so, how was it handled?

Posted by Noel Guinane at June 13, 2005 7:55 AM

Something else I'd like to ask you about which is somewhat related to a conversation we're having on another thread on this blog - you mention that many of the mergers you've been through didn't work because they were done for the wrong reason yet you also say that the malcontents holding a view you agree with but don't express, i.e. that the merger is a mistake, should be eliminated.

Are you suggesting that it is necessary for people to lie about their honest commercial business instincts in a merger situation in order to satisfy the whims of the managers in charge of the deal and so hold onto their jobs?

Posted by Noel Guinane at June 13, 2005 8:11 AM

I'm at a company that's been in a growth mode for many years now, and it's four times bigger now than when I started. Two years ago, and this year, we've swallowed two other companies that is comparable to me stuffing a Burger King cheeseburger into my mouth. It can be digested, but it takes a while.

The Chairman of the Board repeatedly tells the employees about the company's modus operandi - be customer-oriented, put decision-making at the level of people who interact with the customers, have community involvement. I haven't heard of deals they did NOT pursue, but no doubt they're out there. With the last merger, the employees in North Dakota and Wyoming were very skittish about being taken over by this big San Francisco entity. So the biggest wigs did a lot of flying before and after the merger, assuring them that the companies' cultures are similar, and that headquarters would not usurp their authority except in extreme circumstances. And they've kept their promises.

Also, some managers I've worked with took open positions in these new states. This could be seen as the new guy moving in to take over. So it's a chance for that manager to build loyalty through customer service - and in this case, the customers are the existing employees in the new state.

Along with that, several functions have been relocated to the new geographical areas of the company. Now the new employees have a stake in the success of what is now their company, instead of being pawns of the big wigs in San Francisco.

Data issues - problems always come up, and they're dealt with immediately. There may be turf wars, but I'm not aware of them. It's been said here that if the swallowee has a process that's better than the swallower's, then we'll implement the better process across the board. I was intimately involved with one of those cases, so it wasn't just talk, and the company is better off as a result.

What hasn't worked? The big one is that the infrastructure hasn't grown with the company, so there are more technological systems failures due to overload.

Hope that helps . . .

Posted by Ron at June 13, 2005 9:02 AM

Ron, it does and I'm hoping Tom C. will come back too.

Posted by Noel Guinane at June 14, 2005 3:17 PM

I've had a couple of experiences as the acquiree who had stronger managers. The first thing we did was do a quick study to find the biggest opportunities and/or vulnerable incumbents in the new company. Even dominant organizations have weak players with flimsy alliances and problems they can't figure out. Second thing we did was to decide whether or not we could get into the open space and make a quick difference or establish expertise. We kept an open mind, both as a team and as individuals about doing something new or doing it elsewhere in the company (new market, different division, etc.). Third, we looked for ways to make it happen. In one case, executive leadership helped initiate and drive this process, and it turned out very well. In others (earlier mergers by the same executive team by the way), the executive leadership team basically dismissed anything that came from the acquiree as being irrelevant and pretty much got their ass handed to them by the acquiree customer base and Wall Street. how to buy real viagra online

Noel asked my thoughts about making people feel like they have to lie about their business judgments to satisfy whims of managers who led the merger. I do not believe people should have to lie to keep their jobs. Once a merger is in motion, however, everyone should be working to make it succesful rather than to build evidence for a post-mortem of why it should not have been done. I've had pretty good luck in responding "I would not have done it that way, but given that this is where we are going, here's how I would get there...." That's very different from the people who seem to find every forum they can to lay out a list of grievances and excuses about why they can't execute and create a blanket of negativity over their work teams. I have found that in most cases, these folks are either low performers or rulers through intimidation or tenure in legacy organizations. These are the derailers that need to be addressed because they are distracting and counterproductive. Honest, open communication from informed business people with good facts or experience to back them up (particularly when presented in the context of a solution to a particular issue) is critical but not to continually revisit decisions that have already been made (even if they were made wrong). I'll admit it can be a tough line to draw, especially when you have personal emotion invested in it or your team is being treated unfairly, but from an organizational perspective, you need to do the best you can to make your points and then either make it work or move on.

Posted by Tom C. at June 14, 2005 7:55 PM

Thanks, Tom C. for coming back in.

I agree that when a decision has been taken to do something you have to get behind it and do your best to make it work, even if you don't agree with it.

However, it's in that period when the move is being discussed among the senior management team that I'm referring to, if indeed any discussion is held at all. Please understand that I'm not speaking about loudmouths and complainers here. I'm speaking about decent managers who genuinely believe for sound commercial reasons based on supporting facts etc. that the proposed merger will be damaging to both companies involved.

I'm assuming we're dealing with professional people who are relatively tactful. Let's say, for example, we're dealing with you. Have you been in a situation where you have had strong misgivings about an intended merger and, before it took place, i.e., during the whole discussion phase, did you speak up or were you shrewd enough to sense that a negative viewpoint, or a view that could be construed as negative, would get you shown the door?

Now Tom, please be honest here. I promise we won’t tell anyone! It'll be just our little secret!

Posted by Noel Guinane at June 15, 2005 3:27 AM

Noel - I have to admit that I have been at the table for a number of tough decisions that I did not support. In some cases, I was lucky or adept enough to get a little movement - in some cases not. Honestly, a lot of these ill-fated things are about executive ego, if that's the case, they often hurt some good managers, employees and customers. I lump them with other really rotten things I cannot control like hurricanes, old-age and road rage. In a couple of cases, I have stayed and made the best of it. In another case, I decided it wasn't worth the investment of my time to wage an internal fight and went elsewhere.

Posted by Tom C. at June 15, 2005 8:20 AM

Tom, thanks for being so refreshingly honest.

I agree about the executive ego. Seen lots of it and it is out of control.

Posted by Noel Guinane at June 15, 2005 8:44 AM