Manage People’s Expectations in an Acquisition

Is the firm opening a Los Angeles office, one young copywriter wonders aloud. “I’d love to move to LA. Get myself a convertible.” No one knows for sure what is happening to their New York advertising agency, Sterling Cooper. But something surely is afoot as the partners remain huddled in the executive conference room.
      It turns out the firm is being acquired by a larger London ad agency, and all bets are off. “There’s definitely going to be some redundancies,” says a secretary. Everyone is panicked. Is their job “redundant?”
      An account manager lowers his voice conspiratorially: “Regime change is always tricky. You want to stay neutral. Loyalists are always hung and you don’t want to get caught in the fall-out.”
      Another adds, “They don’t care about us. We’re just a bunch of salaries on a ledger. They’ll draw a line and get rid of everything below it.”
      The traffic manager whines, “I like this company the way it is.”
      Sound familiar? Is it real life? No, but it may as well be. It’s a scene from the final episode of the second season of “Mad Men,” an original dramatic series on cable TV, from AMC. Placed in the early 1960s, it no doubt accurately reflects the fear that is felt among employees in an acquired firm.
      For dramatic effect, while the news of the merger is sifting through the Sterling Cooper organization, there is a very real fear overhanging the world due to the October 1962 Cuban missile crisis, which mirrors and exacerbates the angst of those in the firm and their uncertainties of the coming merger.
      This isn’t 1962 and times do change, but not in the realm of mergers and acquisitions and their effect on the people at ground level – the ones who aren’t reaping the profits that owners and partners do.
      Mergers and acquisitions foment uncertainty, dislocation, fear – and worse. Much of that - the natural human reaction to radical change - cannot be avoided. Changes that such events bring also spawn questions that cannot be answered right away. And when questions can’t be answered promptly, the rumor mill takes over.
      What can be managed, on the other hand, are people’s expectations, and insights into how decisions affecting their lives will be made, and when, as well as communicating why some questions will remain open for a time.
      In today’s business world, much of the value of an acquired firm resides in its people. The acquiring company buys brand names, patents, manufacturing facilities, equipment and the like, to be sure. But without the people, it is an empty shell. So it is incumbent on the senior managers to do all within their power to reassure the people and reinforce the company's core values so that the talent won’t make a beeline for the door the day the sale closes.
      At base, effective, relevant and timely communications will go far in achieving the core business purpose of the merger, which is to preserve and enhance the value of the acquired company by building trust and credibility among the new employees.
      Often, the danger lies in the early days before much is known and few of the big questions can be answered. The acquiring firm will often communicate reassuring words that “nothing (or little) will change” and that people should just keep doing what they’ve always done.
      But as the deal shakes out and the questions begin to find answers, the early general communications may be inadvertently contradicted. It can’t be helped. Much is discovered in the early “honeymoon” phase that hadn’t been anticipated, necessitating unplanned changes in plans.
      Change is like that. The key is to approach the employees and managers of the acquired firm with honesty and reassurance.
      The key messages stay simple, direct and honest:

• We acquired your company because of the excellence it adds to ours. It would be unwise for us to do anything that diminishes or destroys that excellence.
• Please work with us as we get to know one another better, as we learn how we will operate together going forward.
• Help us discover your best practices and show us how they might benefit the new larger company.
• Please understand that there will be stumbles along the way. We will always try to minimize the mistakes and hope that you will be stick with us through the rough patches.
• By working together, by striving to achieve the best for our customers, our employees and our stockholders, we will all succeed together and the final product will be more than the sum of the two components.

Who is Joe Maddon?

Unless you’re a baseball fan, you probably don’t know the answer to that question. Even then, you may not. Joe Maddon is the manager of the Tampa Bay Rays, the surprise contender for baseball’s American League championship and, if they beat the Boston Red Sox, the World Series.

“Surprise” because, up until the 2008 season, the Tampa Bay team was the doormat of the league and had never come close to making it to the playoffs in its short 10 years of existence. All of a sudden in 2008, they tore up the competition and won American League East division title with pretty much the same collection of players as before.

And therein lies a lesson for managers in all lines of work.

One truth about managers in Major League Baseball is that the better ones are often those who were also mediocre players. Very few All-Star ball players go on to become superb managers when their playing careers are over. In fact, off the top of my head, I can’t name any in the modern era.

In other words, outstanding playing ability does not necessarily translate to superb managing skills.

The same is true in business. For instance, how many companies promote their best salespeople to sales managers, only to watch them fail? Unfortunately, it’s too common. Being a superstar salesman does not require the same skill set as being a good manager. Similarly, the ability to hit, throw and catch a baseball does not equate to the ability to manage highly talented and often temperamental people.

Joe Maddon – with a bit of a wise grandfather look about him – took on the top job at Tampa Bay prior to the 2006 season. Before that, he had done stints as a manager with an array of minor league teams, and served as bench coach for 10 years with the Los Angeles Angels. His unremarkable playing career included the Los Angeles Angels farm system for three seasons. He never made it to the big leagues before switching to scouting and then managing.

What makes a great manager like Maddon, one who can take a collection of 26 men and turn them into a contending team? Certainly at the top of the list is an appreciation for talent and the insights necessary to apply that talent correctly to quickly changing, evolving circumstances. One truth about baseball that I read a long time ago is that it is a game of suddenness: suddenly, anything can happen. The same is true in a business environment.

Also right up there is an organized mind, with a knack for making obtuse connections between disparate opportunities and challenges – e.g., the right players and the combination of batting order against a particular pitcher’s style.

But perhaps the most important skill is the ability to communicate effectively with a diverse group of professionals, many of whom in the Major Leagues have outsized egos.

And that’s the secret in business too - which is not to imply that business managers must deal with outsized egos, though they do on occasion. But they do have to contend with evolving situations and unforeseen challenges and opportunities, sometimes turning on a dime. And they must foster the forces and people under their control as best they see fit.

Establishing strong, trusting relationships with those upon whom he/she relies is critical. As has been noted previously in this space (see below, "Fair Weather Employees?"), the manager can’t wait until the crisis starts to begin building those relationships. That effort must begin their first day on the job.

Building trusting relationships with your team members requires superior listening skills, empathy, insight into team members’ relative strengths and weaknesses, along with an on-going desire to see those people improve and excel as individual contributors.

In that regard, I am reminded of the words of the late great sportswriter, Red Smith as he remembered his days at the old (and defunct) New York Herald-Tribune. Sports editor Stanley Woodward returned from World War 2 and set about building what was then and probably still is the best collection sportswriters ever.

“He was scouting for the best men he could get,” Smith recalled. “Stanley was the best department head, perhaps the best all-around newspaperman I’ve ever known. Some sports editors, especially if they write a column, are afraid of competition. They want to be the big man of the paper. But Stanley’s rule was, ‘I don’t want anyone who can’t out-write me.’”

It’s a good philosophy for any manager: don’t be threatened by the superior talents of your own people; hire the best and cultivate them to become even better; and establish the kind of relationships where they wouldn’t want to work anywhere else.

Watch Joe Maddon in the coming week as his Rays take on the defending world champion Boston Red Sox. Watch how he manages his team, how he keeps his cool and counsels individual players quietly. I wish him the best of luck – but not too much, because I’m a Red Sox fan.