FOCUS: CHANGE MANAGEMENT - Keys to a perfect business marriage/Mergers and acquisitions can leave existing staff concerned about culture clashes and job security. Change management can help to alleviate problems, often before they arise. Sue Beenstock rep

After all the practice in the 1980s, one would think it would be easy: British Company A spies American Company B, they speak the same language in every sense and before you can say ’ball park figure’ they’ve merged.

After all the practice in the 1980s, one would think it would be

easy: British Company A spies American Company B, they speak the same

language in every sense and before you can say ’ball park figure’

they’ve merged.



Unfortunately, as the current Harvard Business Review (HBR) reports, 50

per cent of mergers and acquisitions fail to achieve their desired goals

because the merger itself is badly handled. HBR goes on to offer a

comparison of performance pre- and post-restructuring among the Fortune

Top 100, and concludes that 90 per cent of those companies would have

fared better had they not reorganised.



It’s sobering news for the likes of, say, BMW or Volkswagen, as they eye

up Rolls-Royce, and no surprise to the likes of change management

consultant, Calum Chace.



In the past few years, says Chace, director of recruitment agency The

Works and director of strategic research consultants AMR International,

there have been countless failed marriages between companies. And if

only they’d called in the change management experts at an early stage

many of their marriages could still be saved.



’It’s a platitude that bears repeating because it’s so often ignored,’

says Chace. ’Change is only successful when supported by those people it

affects. Most of us hate change, and are anxious by the uncertainty

generated by an acquisition or merger, and the more radical the change,

the more it’ll be resisted.’



Professor Colin Carnall, director of programmes at Henley Management

College, says that the last thing change management is about is being

radical. ’Radicalism is needed to create the global economies of scale,

but instituting that process of change is about nuts and bolts and

balance, creating a mental mind map or ethos across the workforce, and

that requires not radicalism, but traditional, consistent

communication,’ he says.



Lorrie Arganbright, director of marketing and communication agency, MCA,

has worked in the UK and is now based back in her native America, where

there is far greater reliance on exploring hi-tech systems to deliver

information around a newly merged or acquired corporation.



’I see glaring differences between here and the US,’ says

Arganbright.



’In the States, there’s more reliance on highly sophisticated technology

to filter change through a company such as business TV, intranet, screen

savers, and if I talk to Americans about team briefings and cascades,

that are part and parcel of the way we work in the UK, people have no

idea what I’m talking about.’



Although electronic communication can deliver news consistently and

quickly, ultimately, says Arganbright, whether staff are in Aberdeen or

Acapulco, all they really want to know is what the global change means

for them.



Will their job be safe? Will their pay and conditions alter?



But just because people want answers to the same questions this doesn’t

mean there’s a template for delivering a message across a newly-created

corporate empire which can be wheeled out for every occasion in every

country. On the contrary, says Arganbright: ’It’s truly amazing how

different company cultures can be within the same industry, within the

same country. So add different nationalities to that already complex

situation and you have the potential for serious problems.’



’Multi-nationals face additional challenges when merging their

organisations - the merging of national cultures as well as organisation

structures,’ agrees Michael Pounsford, managing director of internal

communications consultants Banner McBride.



’Organisations are increasingly taking ethnic and cultural differences

into account when managing change, tailoring communication to local

needs.’



When Smythe Dorward Lambert was asked to work on communication between

Rhone-Poulenc Rorer (RPR) and Fisons during their integration process

last year, it knew that issues of nationality were as sensitive as those

of corporate culture. Traditionally, the French-English mix is not a

happy one, so in the first 24 hours of SDL’s merger team being brought

in, they looked at ways of coping with potential language and identity

problems.



To distinguish business-as-usual communication from integration

information, designers produced a new ’Ensemble’ logo, so-called to

reflect the two languages, one company approach, and all information was

produced in both languages. Curiously, according to post-merger

feedback, the staff of US offices thought the communication too English,

the French thought it too American and the English were generally

content. ’We took that to mean we’d pretty much hit the mark, says Susan

Blum, senior consultant at SDL, who worked on the RPR-Fisons deal.



Merger teams, by nature, are well integrated and work at a frenetic

pace, but they must also be sensitive to the cultural atmosphere around

them, says Blum. ’Every case is different, but you’ll be asking similar

questions each time: ’What are your communication objectives?’ ’Will

they work across the board?’ ’What methods will you use?’



’For instance, focus groups will be fine in Europe, but you’re on a

hiding to nothing with them in Asia, where it must be one-to-one with a

local manager, certainly not an expat.’



And while staff in the UK appreciate being given bad news in a private

face-to-face discussion, those in Asia would be mortified to receive

such personal information this way, a letter would be the acceptable

form.



According to Andy Knott, co-founder of communication and change

consultancy, Hedron, the key is to think global but act local. Knott

knows what he’s talking about, having just completed a rebranding

exercise involving 56 companies in 19 countries for a global financial

services company.



’It was quite an emotional issue,’ says Knott. ’Some of the companies

they had acquired were 200-year-old family firms, there was a lot of

attachment to the old name and potential resistance at a very senior

management level.’ This was solved by instituting face-to-face meetings

with top management from the parent company, offering some compromise on

the more flexible aspects of the name change, such as timing, ’and most

importantly,’ adds Knott, ’involving people as much as possible in the

change process.’



For legal reasons, the first stage of the rebranding had to be completed

in four months, so a project manager was appointed in each country to

lead the rebranding exercise, rather than running everything from

London.



’These project managers were chosen very carefully, they weren’t

necessarily the most senior executives, it was more important that they

were positive about the change and fluent in English,’ says Knott.



A pack, in English, was sent to each project manager, giving compelling

reasons for the change and explaining that it was market driven;

acknowledging people’s affection for the old brand and appreciating

their loyalty both for the old brand and the company’s new identity. The

pack itself looked smart but not lavish. ’It’s important when you’re

putting people through something stressful not to make them think head

office is lavishing money on inessentials when they’re being squeezed,’

says Knott. The pack also spelt out how to deal with the local media and

which issues would be dealt with centrally.



’It gave and explained the facts,’ says Knott, ’but how those facts were

to be communicated was left to the change manager.’ The corporate logo

remained the same, to change that too would have been too much, he

says.



It is still unusual, says Knott, to find a company which puts as much

emphasis on the internal as external communication during a period of

flux, and in this case, it appears to be working well.



’We’re only two months on, but we are pleased,’ says Knott. ’We worked

on the basis of being as open and honest as possible and it proves that

even in the command and control world of banking, where secrecy is part

business rules, part tradition, keeping staff informed, and trusting

them, pays dividends. They’ll work with you rather than pushing

back.’



CASE STUDY: HARVARD IS INSTRUMENTAL IN ACER’S TEXAS DEAL



Last April, Taiwanese computer giant Acer bought the portable computer

section of technology company, Texas Instruments (TI). Although Acer is

a dollars 7 billion PC manufacturer, its profile in Europe is low, and

by buying Texas Instruments, with a dollars 1billion worldwide business,

it hoped to give itself a strong position and brand in the portables

market.



’Within 24 hours of being told about the acquisition, we had prepared

press releases and were briefing journalists,’ says Mark Casey, account

director at Harvard PR, which has dealt with Texas Instruments’ internal

and external communication.



’Our priority was to reassure the media that this wasn’t another case of

a giant swallowing a minnow computer company, and reassure TI channel

partners, suppliers and clients that this was a positive manoeuvre.’ In

such an aggressive, fast moving industry, Casey says it was vital to be

proactive and contact key journalists on relevant titles - PC Dealer,

Microscope, PC Magazine, PC Week - as well as the business and

technology editors of the dailies, to clarify the story before

journalists made damaging assumptions.



’We were helped by the fact that business and technology wise this

wasn’t a complicated story. TI and Acer had worked as technology

partners for years and there were no redundancies because TI was

complementing Acer’s staff,’ says Casey.



Meanwhile, within hours of hearing about the acquisition, Casey had

three senior TI managers round the table. He urged them to adopt an open

door policy, brief them on frequently-asked questions and drafted an

information pack distributed to staff within two to three days of the

announcement, reassuring them that personnel would not be changing and

stressing TI’s brand strength.



Although one company was Asian and the other American, Casey claims they

had more in common that not. ’Both are relatively new, lean

organisations, with a flat hierarchy, run by UK nationals, so there

wasn’t a cultural clash.’ TI staff had to move from their Sunbury base

to Acer’s High Wycombe office about 25 miles away. ’For some it was

better, others worse, but we just told people from the start that we

would be moving and by keeping people informed via meetings and e.mail,

it was done pretty smoothly,’ says Casey.



TI has benefited from a huge capital investment, and a boost to its

brand reach, with full colour ads in trade, reseller and Sunday papers

which was previously beyond its means. And in mid-November Acer launched

a new on-line tool which allows sellers to look at products, service,

pricing, stockists, or even press releases for any Acer or TI item.



’You couldn’t go the new office and tell which staff were Acer and which

TI, so yes, it’s worked,’ says Casey.



CASE STUDY: LSA HELPS BP OIL CONSTRUCT BOVIS ALLIANCE



BP Oil Europe, which has service stations throughout Europe, usually

negotiating site construction on a country-by-country basis. However, to

save time and money, and ensure best practice throughout the Continent,

BP Oil invited construction companies to bid for a contract to build all

its forecourts across Europe - 1,000 by the year 2000 - working in an

alliance with local BP teams on the ground. Bovis Construction won the

contract and a deal was signed by Rolf Stomberg, former BP Oil CEO and

Bovis Construction chairman Sir Frank Lampl.



Corporate communications and political adviser, LSA, was asked to draw

up a strategy to help the new alliance teams work together.



’Traditionally, there was a lot of aggression in the customer-contractor

relationship, they were trained to be confrontational to get the best

deal, but we wanted to replace that with a common purpose and team

working,’ says LSA CEO Laura Sandys.



There was also fear among the teams - nine in total, covering every

country from Slovakia to Spain - that members would be sidelined by

their companies and forgotten about, so it was vital to build up the

prestige of the new alliance team and reassure members they were still

part of their home office. Finally, they had to create common values and

financial objectives.



Dominic Walters, LSA’s account manager on the alliance, says he has not

seen much evidence of the problems anticipated. ’Five levers’ to success

were developed to integrate the teams. These included a monthly review

of project management, regular updates for field teams, assessed

training and motivation schemes, communication via newsletters and

direct marketing, as well as reward schemes for teams who have come up

with innovative deals and designs which can be shared with the rest of

the alliance. Within the teams, power is carefully devolved so one

company’s employees are not seen to win the top team jobs every

time.



’If anything, there was an initial clash getting the BP and Bovis people

to accept each other’s expertise and admitting weaknesses but the five

levers, which all need to work together, have helped build trust,’ says

Walters.



Top bosses in both organisations have written pieces in company

newsletters highlighting the crucial role the alliance teams are playing

and this has helped reassure members of their value to their respective

companies.



The alliance has its own logo for internal use, helping it create its

own identity, and there’s a new quarterly newsletter compiled by LSA and

distributed to all nine teams, publicising best practice and eliciting

feedback from their suppliers to find out how well the alliance is

working for them. So far, admits Walters they’ve had just three replies,

but he confesses: ’I think we were asking for too much information,

we’ll simplify it next time.’ By next year, the alliance will have its

own intranet site, so that project managers will have instant access to

who’s getting the best deals and best designs in Europe. At the moment

Walters is conducting surveys to find out what teams would like the site

to offer - hopefully the response rate will be more encouraging than

that from his newsletter.



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