A few years back, I had the distinct pleasure of working for a fast-growing and exciting company called U.S. Robotics. While there, I witnessed firsthand the turmoil and upheaval caused by an acquisition. This is a brief story about two companies—U.S. Robotics and 3Com—an acquisition, and what managers can do to survive during such times of chaos.
A real story of merger
Back in 1996, U.S. Robotics (USR) was a darling of Wall Street and of northern Illinois, where it was based. USR had more than 6,000 employees, revenues of two billion dollars, and it was in high-growth acquisition mode. The IT group was going crazy—implementing new and better systems, integrating acquisitions, handling 50 plus new employees every week. By autumn of that year, though, USR was struggling, and in 1997, 3Com acquired USR.
3Com was similar in size and revenues to USR. Like USR, 3Com was in high-growth acquisition mode. On the other hand, the company cultures were vastly different, as were the personalities in upper management.
So, like most companies dealing with acquisitions and significant changes, the new 3Com struggled. Suddenly, departments were twice as large as before, with employees spread out over many more locations. Employees watched their bosses engage in power struggles, and many of their bosses left. The executives that stayed struggled too, because they suddenly had lots of new employees with different expectations of work and culture. 3Com was having a tough time getting organized and focused. Even the executives didn’t know which way the company would turn from one day to another.
Imagine a newly-merged IT department—unsure of which goals to follow and which leader to listen to. It was pure chaos.
Acquisitions and change
Business analysts have observed that most mergers and acquisitions don’t yield the expected results. Many, if not most, ventures are later seen as errors and corrected through divestment. (If you take a look at 3Com today, you’ll see that very little of the original U.S. Robotics business is left. Most has been sold or spun off, or burnt out.)
And, frankly, when you take your eyes off the books for a minute, it makes complete sense. People work in organizations, and whether or not executives or analysts like to admit it, people are critical to a company’s success. And guess what? People are not machines. They have feelings and needs. Unfortunately, companies forget that over and over. And managers forget it, too—which is a big reason changes such as mergers and acquisitions are likely to fail. Executive teams don’t recognize the power of the employees—and managers and employees don’t harness their feelings and needs in a way that will benefit themselves and others.
How to survive and even thrive during times of chaos
As a manager, aren’t you just stuck in the middle? The executives expect you to maintain productivity in your department and smile through the whole thing. The employees want you to tell them if their jobs are at risk and meanwhile make everything go back to the old way of doing things. There’s no way you can succeed, right?
Wrong. It certainly might feel like there’s no way to succeed. And in some cases you might just be between a rock and a hard place; if that’s the case, you gut it out or find a new job. But if at all possible, you should rise above the chaos and personal anguish and make the best of it. There’s just no value in staying “stuck” in a bad place—whether that place is mental or physical. You have a few choices. You can:
- Stay and be miserable.
- Stay and learn, and possibly find or create new career growth opportunities for yourself (and help the organization at the same time).
I saw people make all three of these choices during that first year of the merger. People who stayed and were miserable didn’t fare well. They were unhappy, which affected their ability to add value to the workplace (not to mention the home!). But I was most fascinated by those who stayed and thrived. At first, other USR employees viewed them as traitors. After all, how could they commit to this new organization that had disrupted everything? But the fact is, the people who thrived went through the critical stages of change more quickly than others. They applied their ingenuity, work ethic, and experience to make their work life tolerable and maybe even enjoyable.
So how do you do it? Try breaking this formidable task into steps.
- Focus on yourself and getting through the stages of change. You know how flight attendants tell you to secure the oxygen mask first for yourself and then for your children? Well, to some degree, that applies here as well. You can’t abandon your employees, but you can’t help them if you’re struggling with your own issues around the change.
- Establish and use lines of communication in all directions. Ask others who might be a source of information for updates and input—try your boss, your mentor, the HR department—whomever you think is trustworthy. And keep asking. Then, share everything you know downward. Your employees have even less control than you do. The more you communicate with them, the better their sense of control.
- Set short-term goals and find ways for your team to have early wins. Find those wins and promote them.
- Understand the stages of change and what your employees are going through. You’ll be better able to assess your team and their abilities if you do.
- Re-recruit your key people. Don’t spend a lot of time with those that aren’t getting on board.
- Expect a high level of uncertainty and ambiguity for a long time. Following a merger or acquisition, there’s likely to be change and upheaval for a few years.
Too much work?
Six steps are a lot to accomplish, and it isn’t exactly a linear process. Your best project management skills probably won’t help you here. Perhaps it’s just too much work—and, after all, you didn’t start this whole mess anyway.
Whoa. Be careful and don’t fall into that victim mentality. At USR, we were great at blaming 3Com for all of our woes, but the fact is, if we weren’t in trouble in the first place, we wouldn’t have needed 3Com to bail us out. So whom do we blame? Finance? Sales? Product development? Manufacturing? (Yes, I’m sure we considered each of these groups at different times.) It doesn’t really matter. Here we are, stuck in the middle of an acquisition along with hundreds of thousands of employees in other companies!
Given that situation, what’s more work? Sitting around feeling bad, listening to your employees complain, fighting new policies from corporate, and finding your team unable to achieve any satisfying level of productivity? Or, accepting the new workplace, finding ways to create something meaningful at work, and establishing new processes for getting work done?
Both approaches take a lot of work. But the second one is rewarding. The first is depressing. You choose!
When mergers and acquisitions happen, chaos ensues. The right attitude and the six steps I’ve presented here can go a long way toward helping you and your team survive and thrive. In my next article, I’ll cover those six steps in more detail.