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.
