Surviving A Merger

Meetings & Conventions Surviving A Merger December 1998 Current Issue
December 1998

Planner Janette Gerl's firm, Bank of America, is in the process of merging with NationsBank.
Surviving A Merger

Keeping your job is the first hurdle.
The next: melding the meetings of two companies (and two staffs)

By Lisa Grimaldi

Until May, Janette Gerl was comfortably ensconced in her position as events-marketing manager for Bank of America’s mortgage division. In her three years at the San Francisco-based bank, she’d carved a niche for herself as planner-of-all-trades, overseeing corporate meetings, elegant special events, client entertainment, trade shows, gifts and her real baby the annual incentive program for the mortgage group’s top salespeople.

But last spring, Bank of America announced it was merging with NationsBank, a fast-growing, 10-year-old firm based in Charlotte, N.C. And in the six months since the shoe dropped, Gerl’s learned enough about the “other side” to determine they have a whole different take on meetings and events.

Although her immediate concern job security has been addressed (she’s staying on in the same role, events-marketing manager), she’s now grappling with a host of merger-related issues. Until this fall, for example, Gerl ran a one-person show, supported by a large network of trusted suppliers. NationsBank, on the other hand, has a marketing department as well as a large corporate meetings department and regional planners. Bank of America’s mortgage group frequently exhibited at trade shows; NationsBank’s division did not. Another wrinkle: She’ll remain in San Francisco, while the other planners will be based in Charlotte, where the merged company will be headquartered.

She expects the greatest challenge will be to forge a common meeting, incentive and event structure that will serve the needs of two different and distinct corporate cultures. Budgets are a key example. “While I didn’t have carte blanche for our events, the budgets for meetings, incentives and events were generous,” Gerl says. “They were quality-driven, but I was accountable for what I spent.” She’s had early indications that NationsBank keeps a tighter rein on spending for its meetings and events.

Another challenge lies in determining what type of incentive program will work for the new joint sales force. BankAmerica Mortgage’s incentives are high-end, pure reward trips to Hawaii for top salespeople and their companions. NationsBank’s comparable incentive program doesn’t include spouses, the destinations are closer to home and the event itself is more business than play.

Between now and April 1 when the two banks’ mortgage divisions are fully integrated Gerl and her counterparts will face the challenge of clearing up, as one insider calls them, the “ambiguities and uncertainties” before the two firms become a couple. “One thing’s a given it will be anything but business as usual,” she says.

You’ve been mergerized
Gerl and the planners at NationsBank are in good company. They’re among millions of employees affected by corporate mergers in the past decade. According to Mergers & Acquisitions magazine, more than 11,000 U.S. firms were involved in mergers or acquisitions this year, compared with 2,700 in 1988.

“The ’90s have seen the greatest merger boom in the history of the U.S.,” says Kevin McCabe of Dallas-based business consultancy Pritchett & Associates Inc. “And just about every type of industry has been affected: communications, financial services, insurance, health care, high tech, banking, oil, auto.”

Why did mergerization (a term McCabe’s company claims to have coined) catch on so in this decade? For two key reasons, says McCabe. “Many folks used stock to pay for their acquisition, which was easy to do when the market was bullish and people didn’t have to pay for it out of their pockets.”

Houda Samaha, a Framingham, Mass.-based business consultant, agrees. “Companies also merge with or acquire another firm because it has a client base or presence in an area they want to get into.”

For select players at the top, the benefits of mergers are clear. It’s a different story, however, for those in middle management or on the front lines. (See “Making the Most of It,” page 79.)

Suddenly, job security evaporates. You may have to explain or even defend your department’s practices to new management and colleagues. You may find yourself becoming a first-time manager, or growing from a department of one to one of a dozen.

Meetings and acquisitions aren’t personal they’re happening for fundamental business reasons. But the initial reaction most people have when they hear the news is fear.

“The first things that come to mind are the ‘me’ issues, like, ‘How will this affect my job?’ and ‘Will I have to move?’” says McCabe.

On the wrong side
Although Gerl and her NationsBank counterparts are still in the pre-merger stage, other planners have gone through the full process. And as Cynthia Dugan, CMP, found out, both sides of a merger don’t always end up sharing the power.

Her firm, Rolling Meadows, Ill.-based US Robotics, merged with another high-tech firm, Santa Clara, Calif.-based 3Com Corp., in June 1997.

Dugan says it’s clear now it was more of an acquisition, even though it was initially presented as a merger (see “Partner or Pawn?” below). Before the deal, she was a corporate meetings coordinator, responsible for organizing board meetings, product road shows and special events. “I was the main meeting planner, but I had a lot of people in the administrative services department to support me.” Dugan also had a lot of autonomy. “My boss let me do what I wanted to do.”

Enter 3Com, which didn’t have a designated planner. Instead, the company, which outsourced everything from switchboard operations to mail-room personnel, had handed over external meeting functions to its corporate travel agency, BTI Americas, in 1995.

At first, Dugan wasn’t concerned about job security. “I did a great job, so I wasn’t worried.” But in the months after the merger, it became clear things were going to change.

“Their philosophy on meeting planning and mine are different. They did things by the book and were more logistics- oriented, interested mainly in getting good rates for flights, rooms and ground transportation. I’m from an educational background, so I’m more strategic-minded; I’m more concerned that the content and ambience are just right,” she says.

At the same time, it was becoming clear that 3Com would be the dominant force in the merger. Out of the 800 positions eliminated as a result of the deal, 600 were US Robotics employees. And Dugan’s position was one of them.

Fortunately, a 3Com employee for whom Dugan had organized a meeting was impressed enough to recommend her for a new position: manager of the company’s Rolling Meadows-based briefing center, an in-house conference center where sales and marketing people meet with clients. And Dugan, who is in the process of hiring five people for her staff, couldn’t be happier.

“You really need to invest in yourself, so when these things happen, you can be wonderful somewhere else,” she says.

From planner to leader
Dianne Anderson is another merger veteran. The planner, who had racked up 36 years with aerospace firm McDonnell Douglas Corp., knew it wouldn’t be business as usual after the company’s 1997 merger with Seattle-based Boeing Co. (A year earlier, the company had merged with another aerospace firm, Rockwell International Corp.) And Anderson decided to use the change to her advantage.

“Prior to the merger, I was a customer relations/protocol rep,” she says. “For years, every time there was a space launch at Cape Canaveral, I flew [from the Huntington Beach, Calif., division of McDonnell Douglas, which was headquartered in St. Louis] to Florida to arrange the accommodations, transportation and evening events for VIPs and clients.” It was a job she loved, but she felt completely burned out by the time the merger was announced.

So she was enthusiastic when, as a direct result of the merger, her job title (customer relations and special events manager for integrated defense systems) and duties (organizing meetings and corporate visits for government and armed forces executives to the firm’s Huntington Beach and Seal Beach, Calif., facilities) changed. She also now plans internal meetings and organizes team-building events such as ice cream socials, indoor golf tournaments and the like, which she says are designed “to break down barriers between the different divisions of the merged company.”

But Anderson didn’t wait for the merger to be announced before taking charge of her career. Already worried about job security in the changing aerospace industry, she and three colleagues began thinking of ways to demonstrate their value to upper management.

“We decided to demonstrate to our managers how key planners are to the success of business,” Anderson says. “We put together a presentation to explain our roles and told them about all the functions we do.” Anderson says that once management was sold, she didn’t have to put on the song and dance again after the merger.

Next, she and her Huntington Beach colleagues established themselves as valuable resources to the 30 other planners throughout Boeing.

“After the merger, we met with all the customer relations people (who are considered planners). I realized that we, because of our planner certification [from California State University, Long Branch] and membership in Meeting Professionals International and the Society of Corporate Meeting Planners, were a little more educated and advanced than they were,” she says. The first step: getting her new colleagues to join MPI “for the education,” she says.

Next, her group came up with a standard guide and procedures for visiting clients they shared with their colleagues throughout the far-flung company. “Now, clients visiting divisions in Washington, D.C., Seattle or Colorado are received in the same way.”

And there’s more best-practices sharing in the works. Anderson is now heavily involved in the customer relations council, in which she and her counterparts from other divisions discuss the way they do things and decide what practices should become planning policy. She’s also arranged seminars for California-based council members on topics like etiquette and military protocol.

Next month, many of these tips will be shared with an even bigger audience: All of Boeing’s customer relations managers will convene for a weekend retreat.

But Anderson isn’t done proving her worth and those of Boeing’s other planners. “We’ve even suggested starting conferences for our rocket users. It’s still in the proposal stage, but it looks like a go.”

Keeping the team
Sally O’Connor, a planner with Boston-based BankBoston, has survived not only one, but two bank mergers first with BayBank and more recently with investment bank Robertson Stephens. Each time, the departments she directs meetings, events and protocol have swelled.

“My greatest challenge is keeping the people I’ve inherited happy. It’s not easy for some who’ve been used to running their own department,” she says. “You can’t come on too hard people need time to get used to the change.”

As for her own survival, the 18-year veteran says she treats new bosses no differently than old. “My boss is the person I’m doing a project for at that time; then it’s on to the next one.”

She adds, “I wouldn’t be where I am today if I weren’t flexible and didn’t go with the flow.”

Making it through
Regardless of the reasons for a merger and your position in the organization, there are steps to safeguard your position and ensure a smooth transition.

Don’t be an ostrich. Mergers call for meetings to keep people (employees, investors and clients) informed and answer questions. Houda Samaha says planners should say, “Let’s get people together to form strategies, discuss how jobs will be divvied up.”

Janette Gerl agrees the worst thing a planner can do is “sit back and wait to see how things will turn out.”

“One of the things I can tell you when you’re going through a merger is that planning goes by the wayside. The role of planner becomes more important than it was before. You need to take charge and keep management focused on the role meetings can play in the success of a new venture,” she says.

Meet with your counterparts. Samaha recommends getting both meetings departments, or at least the heads, to tell each other why they operate the way they do. “You should also both bring up what features of programs you do now you’d like to retain. Sit down and talk about the best of both of your worlds.” She recommends asking each other, “If you had to set up this department all over again, what would you keep?”

Don’t think in terms of “my way” and “your way.” Find common ground and create a third alternative that you both like. It’s easier to adopt a new way of doing things than to push one side’s way on the other.

Don’t underestimate corporate culture. Gene Slowinski, managing partner of Alliance Management Group, a Gladstone, N.J.-based merger-consulting firm, calls corporate culture “the 800-pound invisible gorilla that tears merging companies apart.” Kevin McCabe defines it as “the way we do things around here.”

Culture can mean the way people dress or even whether employees are expected to bond with the boss over martinis at the local watering hole. Also under the corporate culture hat: How is employee training viewed? How are goals set and measured? How are people rewarded?

Cynthia Dugan says that US Robotics was very “Midwestern,” while 3Com Corp. was very “California-centric.”

“We were the ‘country cousins’ at first it took a while for them to respect us.” McCabe says firms’ cultures should never be dismissed. “It’s a crutch people rely on, especially when there’s so much ambiguity about areas of the firm and business.” Instead, he recommends that after the merger has been in place for a while, managers take the “best of the best” of both firms to forge the new culture, as Dianne Anderson and her new Boeing colleagues are doing.

Planners, Houda Samaha says, need to pay special attention to the two cultures when putting together things like the company picnic or holiday party. “You don’t want either side to feel alienated form a dialogue with your colleagues, find out how they’re used to doing things and come up with something that will work for both.”

Set new goals and priorities that are consistent with the new corporate mission and strategy. Individuals’ roles and responsibilities may need to be changed or refined.

Reevaluate suppliers. Use the merger as an opportunity to revisit the vendors you use; you may find the other company has better suppliers or can negotiate better rates.

Look at the merger as an opportunity. This is a good time to give up some part of your job you don’t like, or to wipe the slate clean and start from scratch. Be innovative. Step forward and ask for things you want to be more involved in or learn more about.

The key for successfully surviving a merger, Samaha says, is to be open-minded and flexible.

When you’re the boss
If your job involves managing other employees, your challenge is twofold: You must not only come to terms with the merger but also ensure the members of your staff make a smooth transition into the new corporate structure.

Gene Slowinski, managing partner of Alliance Management Group, a Gladstone, N.J.-based merger consulting firm, says the key is to understand that employees’ priorities change as soon as a merger is announced.

Before the merger or acquisition, he says, most employees are producing top-quality work. “Mergers are remarkably human events... People become terrified when they find out about them and it leads to strange behavior, no matter what they’re working on or what type of employee they were before,” Slowinski says. “Now, they don’t want to attract attention to themselves, at the risk of screwing up what they already have.”

He notes that at first, nearly everyone will drop back to the level where their only concern is to keep their job. “They want to protect that paycheck,” says Slowinski.

Management’s goal should be to bring employees back up to high performance levels as quickly after the merger as possible.

Experts offer the following tips for managers undergoing a merger.

Communicate: Slowinski says managers can’t overcommunicate in a merger situation. “You don’t want the rumor mill to usurp company announcements. Set up a communication system that’s trustworthy, such as the company intranet, or make employees’ immediate supervisors into up-to-the-minute information providers.”

Kevin McCabe, a management consultant at Pritchett & Associates, Inc., a Dallas-based consulting firm, agrees. “Silence is a big sin communications are very important throughout the process.”

He adds, “If you don’t have an answer, at least give a time frame of when you will have it. If the answer is ugly, be honest and communicate as quickly as possible.”

Keep valued staff: “During mergers and acquisitions, your employees will reevaluate their situation and headhunters will begin to call,” says McCabe. “If you want to keep your best employees, figure out what motivates them and come up with action plans to implement motivation.”

Address survivors’ guilt: Tell the employees why they’ve survived and how they’ll fit into the new infrastructure.
L.G.

Partner or pawn?
Major change is on the horizon, but is it a merger or an acquisition? The terms are hardly interchangeable: A merger is when two companies come together on fairly equal terms; an acquisition is when one company buys the other.

“The key difference is the issue of control,” says Houda Samaha, president of Innovation Management, a management consultancy based in Framingham, Mass. “In mergers, there’s equal weight and control between the companies, while in acquisitions, the buyer is in the driver’s seat.” This, she adds, makes a difference in how people view their roles and in their levels of fear.

“The acquiring organization has a built-in compulsion to install its own people, its own methods, its own departments the purchaser’s culture is the one that will prevail,” she says.

In mergers, however, “the best of the best [in most areas] will be what survives and will serve as the basis of the new corporation’s culture.”
L.G.

Making the most of it
In its handbook, “The Employee Survival Guide to Mergers and Acquisitions,” Pritchett & Associates Inc., a Dallas-based consulting firm specializing in post-merger integrations, offers 10 steps on how to survive and even boost your career potential in a merger or acquisition.

Control your attitude.

Be tolerant of management mistakes.

Expect change' be a change agent.

Don’t blame everything you dislike on the merger.

Be prepared for “psychological soreness.”

Get to know the other company.

Use the merger as an opportunity for growth.

Keep your sense of humor.

Practice good stress management techniques.

Keep doing your job.
L.G.