The Merger and Acquisition Fallout – Who Should Stay or Go?

According to Andrew R. Brownstein of Watchell, Lipton, Rosen & Katz, 2015 global mergers and acquisitions (M&As) hit an all-time high with the United States contributing to nearly half of the $5 trillion.  The United States economic outlook was more stable as companies continued to reduce costs and minimally retain comfortable revenue margins, thereby created many opportunities for friendly, hostile, and unsolicited M&As with additional company spinoffs.  However, the fallout of these ventures inevitably result in a change of direction for the vision of the new company with a mandate to modify the employment staff.  Leaders have to determine who should stay and who should be offered a package to leave in peace.

When a corporation pours multi-million dollar investments into another company that has unique assets (the acquired), this is considered an acquisition.  The new leadership team should include a few people from the acquired company for a short period of time to ensure a smooth transition.  This timeframe enables the acquiring parent company to obtain as much knowledge to proceed without interruption with no reliance on the acquired company’s employment sources.  Professional sports teams are the best and simplest examples of acquisitions.  A new General Manager (GM) takes the helm and releases all the staff brought in by the previous leader and hires his own loyal crew to work hard and protect his best interest.  In this case a transition is not required because the skills between the two regimes are transferable and easily replaceable. 

Many employees who don’t want to face the reality of a take-over mistakenly call an acquisition a merger.  A merger is when two companies combine similar resources, methodology, and practices to create a uniform direction and provide an almost equal blend of assets, capital, inventory, customer base.   If one company provided or purchased billions of dollars in another company’s stock, it is an acquisition not a merger.  If two companies provided nearly half of the funds and resources to formulate one company, it can be considered a merger.

Nonetheless, deciding who to keep is based on three factors: 1) loyalty analysis, 2) influence and 3) impact to revenue. 

Loyalty. Loyalty analysis is a complete review of whom and what the employer is dedicated.  This can be a specific person in charge or existing processes in place.  If someone is dedicated to the old processes and blocks the implementation of new processes, remains defiant with the new leadership and complains about conforming to existing staff, or does not want to assist or work on teams with the new regime, a package should be created to encourage the employee to leave.

Influence.  The influence of an executive or manager must be accounted for when creating the direction of the new company.  When a company is acquired, normally the CEO of the acquired company already has a buyout package and is retained a few months to persuade his old subordinates that the holding company’s executives have tremendous strengths in growing the company, the new direction is best for the company, and their career paths will skyrocket in the industry because of the corporate change.  While this is normally an untruth, the parent company uses the influence to their advantage to involuntarily solicit as much buy-in as possible to gain the knowledge to release the maximum amount of people in non-crucial areas.  In an assessment on which management to keep, the influence to turn people in the new direction is key in keeping them employed.

Revenue Impact. Identifying which employees’ work contribute to the bottom line provides a purview into the areas of the company that should not be disrupted.  If a manager and his subordinates are helping to create new profitable solutions on time, in budget and with the existing number of resources, he is a keeper.  If the role requires research or completing mundane tasks that do not feed into revenue increase, a package can be created to remove these low-hanging fruit.

With these three assessments, these tips should help answer the question – to be or not to be employed.

To Meet or Not To Meet: Exploring The Financial Impact of Meetings

When a meeting organizer puts the focus and purpose of the meeting to the test, the result should be measured across two areas - immediate action or more follow-ups.  In either case, there is a financial impact to conducting a meeting when there is no clear agenda, no one capable of facilitating the meeting to stay on topic, and no one with the ability to drive tasks towards completion.  Meetings like these have a financial impact that costs the organization based on the calculated hourly rate for each participant plus travel costs if the participants are not local.  This can be expensive if there are no resolutions and no clear direction because subsequent meetings have to be held which can require additional invitees.

There are three ways to determine if the meeting is financially smart for the organization:

1. Determine 

Determine if an email can be sent to the appropriate parties to resolve the issue.  With modern technology, people can instant messenger others who might have the answer to thoroughly answer the email.  This would save money overall with the use of corporate technology to make a time-saving and cost-conscientious decision.

2. Identify

Identify how many people need to attend because they are actual contributors to the actions deemed necessary. Count how many should be optionally informed and how many are mandatory because they will make the decision - the ultimate sniff test to weed out the informants .

3. Recognize 

Recognize when people just want to take a trip on company dollars with no valid purpose because similar meetings were run using web conference.  It's understandable that those who travel are looking for the hotel points and airfare miles to keep status with their favorite travel partners.  However, the amount of money spent on the airfare, hotel, car rental, and per diem may be extremely costly when web conferencing is nearly free and allows people to remain in the comfort of their homes.

Next time you think a meeting is necessary, take the chargeback rate and expenses associated to all consultants and time and material costs for employees.  Calculate these rates times the length of the meeting.  This will determine financially if the meeting was worth being held  in-person or in a web conference.

Who Is Quarterbacking Your Team?

Every team requires a leader who will go the extra mile to do the work when others don't have anymore to give or will motivate those who need the extra push to do more than their self-imposed limits.  This leader is respected more often than liked and attracts others to be their best and contribute what is necessary to make the team successful.  The team leader is much like American football's quarterback.  

The quarterback is the most important person on the team because he provides leadership, direction, support, resiliency, and ambition that is needed to persevere through obstacles of the game.  The quarterback is the cheerleader who provides the moral support to the other members of the team when they feel as though their mistakes or inabilities to make the plays contributed to a loss.  The quarterback is the person who takes the hit for the team and blames himself if everyone did not perform well.  The quarterback or leader for any team should have these four qualities:

1. Respectful

Respect and admiration of those being led to ensure what is asked is done and expectations are exceeded - inherently forcing others to rise to the occasion to make the team successful by doing more than what is requested by the job title.

2. Altruistic 

Selflessness to take responsibility for the faults and drawbacks of the team with the focus being on how to improve with existing teammates rather than trying to start over with new personnel to make exciting moves to cause corporate buzz.

3. Empathetic 

Empathy as a part of servant leadership to walk in others' shoes to understand their emotions and plights and work to resolve issues rather than close the doors of communication in judgment putting ego aside and others first including the organization.

4. Strong Character 

Unquestionable character that can hold up to any test where the reputation - in-person and online - is solid and there are no indiscretions that would embarrass the team or the organization.

Starting the Year Off Right After Corporate Changing of the Guards

While many resolutions at the start of the new year are about "new you" or "new career", there are many people who will need to re-energize after a prior year of tumultuous changes due to massive layoffs, mergers, and acquisitions. Uncertainty about a current job, the role to be played in the future and the potential of no career path at a company can be mentally tiring.

Here are a few steps to re-energize yourself at the top of the New Year to determine your next move:

1. Assess the new regime.  

Fight through the rumors and media headlines and do the due diligence on what really happened for the change to occur. In the case of a merger, how much of each company's standards and ways of doing business are included in the new company? How quickly can you adjust or make a difference? In the case of an acquisition, how important was your position or did it even exist in the parent company's structure and what would be its value?

What are the policies for working - onsite everyday, telecommuting, travel or longer commuting times than previously? Can you work with the new leadership and middle managers? As described in Seven Transformations of Leadership by David Rooke and Wiliam R. Torbert, are they opportunists, diplomats, experts, achievers, individualists, strategist, or alchemists and how does that blend with your values?

2. Honestly, evaluate your strengths and weaknesses.  

This requires introspection and possibly some peer assessments regarding what is required in your position as well as character and work ethic attributes. Identifying the strengths should help to align with departments in the company that are weak in these areas. Similarly acquiescing the weaknesses means there should be a plan on how to improve them or find another position where those skills are not as prevalent to the role. For help in this area, start out with reading StrengthsFinder 2.0 by Tom Rath.

3. Build a new network.  

If the old network loses power or are sent packing, there are still bills to pay. However, this does not mean switch support or allegiance to those who have always supported your career. While you are planning your next move, it does mean finding a way to show your worth by asking to be invited to meetings, setting up one-on-ones to discuss your strengths, being attentive to the new direction to discover a way to implement those skills and watching the newly formed relationships. It also means doing informational interviews outside of the department, and more importantly, outside the company, to find a new niche with more potential and staying power.

4. Rebuild your brand.  

Create an online video elevator pitch of 3 sentences that describe your key assets to any organization. Take certification courses in an area that can help increase the chances of broader employment outside of the industry. Set up or modify LinkedIn accounts to better describe what you do in recognizable terms of others in the same position both in and out of the industry. Set up quiet time to read and refocus on passions that you always wanted to explore and research how your skills can be incorporated to make that dream come true. Build and create a social media brand based on your expertise and network with those of similar interests.

Published on January 4, 2015

Building a Future While Balancing the Present

Entering into another year always causes some career versus potential introspection. It is the normal time of the year to reflect on what has been done in the past years, the progress or regression along the career path and the reality of a future as it relates to the existing employer or client or the potential to do more and be better. The good news is that you possess the ability to direct where your career will begin or end if you properly balance the existing survival in the workplace with the tasks required to build a future elsewhere.

Delegate The Now.  

Most of what is done in an existing job is routine and can be done on auto-pilot. Delegate the small tasks to free up time to focus on the next career move. Send others to meetings for you and have them distribute meeting minutes. Catch up later and be persistent about pursuing the next career choice.

Set aside time  

In order to get to a destination, time must be allotted for the travel. Identify 2 - 3 hours/day to research, study, intern, highlight strengths and weaknesses as it applies to the future job, or conduct informational interviews with individuals in the desired industry. Block out personal appointments on your work calendar for lunch or multiple breaks in the day to take a walk or sit in the car and plan what is necessary to do to reach your potential.

Limit the distractions 

Successful people work towards the goal without a lot of noise from others in the background. Tell only the people who can help you make the change. There is no need to tell everyone including family and friends your aspirations if they are not in the position to help you get there. If validation is desired, there is a bigger problem that a new career can't fix.

Train Yourself to Need Less Sleep 

It's great that 8-10 hours of sleep is the recommended sleep duration. However, time cannot be turned back to give a second chance to complete tasks not done due to procrastination. Learn to take an hour less of sleep time, if necessary, to do an internship, be mentored or work on the attributes that are required for the next position.

Published on December 11, 2015

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