Monday, June 05, 2006

Corporate Mergers – A true test for an individual’s adaptability

Andrew S Grove (Ex-CEO of Intel corporation) in his book ‘Only the paranoid survive’ talks about an important term ‘Strategic Inflection Points (SIP)’.An SIP is nothing but a point in time in which the company needs to change very much and that SIP determines the success or failure of the company. Change in company strategy in terms of the service that company offers, corporate mergers, change in the company positioning can be examples of SIPs. For the past 3 years, the company that I am working for gone through a corporate merger and it’s been tremendous experience for me. I am not going to take the names of the companies because I believe learning’s are important than company names. I would any day bet on my learning’s rather than the company.

From the organization’s standpoint mergers are very crucial for their existence. Inventions like Internet, power of PC computing and advanced technologies are re-writing the meaning of the word ‘competition’. In order to keep ahead of the competition and to stay in the business, corporations needs to change and merger is one of the ways to change. By mergers these organizations demonstrate their ‘Adaptive Enterprise’ behavior to their customers, shareholders and their competitors. The new, merged organization suddenly feels ‘young’ and takes up their competitors more aggressively.

Having said that mergers are very difficult process to go through at an individual level. According to me mergers are a true test for an individual’s adaptability. I have gone through many ‘sleepless-nights’, ‘perpetual-chaotic-work-days’ and ‘frustrating debates’. That too when you belong to the smaller entity of the merger it’s even more difficult because most likely all the better things of the smaller company will go off the suddenly the ‘big-company’ culture will set in. I am sure lot of B-Schools and management gurus have done numerous case studies on this topic and according to my experience merger happens in multiple phases.

The first phase (Formalities phase) during which all initial formalities happens. Leaders of both organizations give press release and start ‘selling’ the merger to their employees by giving all sorts of ‘management fads’. During this time an un-usual excitement builds among employees and huge amount of uncertainty prevails. The second phase (Re-org phase) in when the organization structure of the new entity gets announced and most of the top management in the smaller portion of the merging entity quits and they are followed by them a set of ‘Chelas’ followed by one more re-org. According to me this must happen because there cannot be two sailors for the same ship. After the second re-org a new set of leaders come from nowhere and they start talking totally a ‘different-corporate-language’. At this point no one knows what is happening in the top level management and where this is all leading to. The ‘perpetual-chaotic-workdays’ becomes a part of life for low level employees.

During the third-phase (Policy phase) all new policies gets announced and it really really hits hard on people. All the better and employee friendly policies get chopped off, people start leaving in bulk and a huge change happens in the eco-system. Changes in email ID, Internet speed, hiring methods, support functions, salary structure, promotion policies, approval process takes place and the ‘big-company’ culture sets in. This is the thick of the merger and shows the awful face of the merger. This is followed by the fouth-phase (Settling-In) in which the new system slowly gets set in. The company’s face is changed now and employees are in a different world. The company starts moving in the newly defined direction with new set of leaders and policies.

After the merger now I am clearly able to see three groups of people. The first group is ‘Early quitters’ which consists of 20% of the company population who leave immediately after the merger because they don’t have a role to play in the new organization or because of their ego. The second group is ‘Majority cribbers’ which consists of 65% of the population. These are the people who are still not able to adapt or digest the fact that the merger has happened. They still keep talking about their ‘Good-old-days’ and ‘Once-up-on-a-time’ stories. Change is very hard for them and they still feel that the old small company culture will come. I feel very sorry for these people because that will not even happen in dreams. The third group is ‘Real adaptors’ which consists of remaining 15% of the population. These are the people who accept that the company has really changed and start playing their game according to the new rules. They are still performing and working as hard as they were. The only person who comes to their mind is their ‘Customer’ and they are passionate about satisfying customers and giving their best from the heart.

In my experience I have seen Early quitters, Majority cribbers and Real adaptors and I believe it is really dangerous to be in the Majority cribbers group. It sucks an individual’s positive energy and it leads to nowhere with respect to their careers. It’s always better to adapt or quit. From my personal point of view it’s been an excellent learning experience and proves the following evolution theory once again:

“It is not the strongest of the species that survives, Nor the most intelligent that survives. It is the one that is the most adaptable to change”

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