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CASE GAME The Case Of Cultural Differences Contd. Integrating For Synergy THE DISCUSSION
Integration is critical to the success of the merger. Sawhney can ensure this happens in two ways. He should quickly develop a vision statement for ABB. The statement should articulate how the new entity will position itself in relation to customers and competitors. This should be widely disseminated. He should also set in motion a process of absorbing the best people and the best practices from Bradbury, all the while ensuring that the choice of the business model and ultimate control rests with Allen. It is important to be transparent about this process. Simultaneously, Sawhney and his team should review the relative strengths of both the banks (which would have been done prior to the acquisition) and develop a coherent 5-7 year strategic business plan for ABB. He should also put together, on a priority basis, a core team of 100-150 senior professionals at the top-a broad mix of heads from both Allen and Bradbury. Sawhney should hold regular meetings with this team to articulate, disseminate and clarify his vision for ABB. Each senior manager will, in turn, communicate this vision to customers and other colleagues. I'd also like Sawhney to meet large numbers of employees and key customers. ABB should form 5 or 6 committees of 4-5 individuals each from the senior management team. Each committee should be asked to examine issues relating to specific aspects of the integration process. These committees should make recommendations within two months and, after Sawhney's concurrence, their decisions on their respective issues should be made final and binding. Sawhney should avoid, in the initial phase (6 months-1year), layoffs and shedding of employees except at the top level. Every three months thereafter, he should review the performance of his core team. At the end of a year, Sawhney should examine the progress of consolidation and integration through the following steps:
Integration is a serious business. Sawhney and the members of the management committee of Allen Bradbury Bank must give the process of integration the attention it deserves. A separate cell must be set up at the bank with an exclusive mandate not only to set the ball rolling but to see the integration through to its logical end. It is necessary to enlist the help of an outside consultant who has handled similar assignments in the past. One of the first tasks of the cell is to design a roadmap detailing the steps required to implement the integration. Equally, its members must brief small groups of employees down the line about the mechanics of integration. The cell should also invite opinions and observations from employees. This is a confidence building measure that will go a long way in allaying misgivings at various levels. A major task before the cell is to evolve a vision for ABB. Post-merger, the matrix has changed. There are new hopes, dreams and aspirations at the individual level. There are new objectives, values, and differentiators at the corporate level. These must be channelled into a common goal that inspires and energises everyone. It is vital to retain the original strengths of both banks-the very basis of the merger. This also means the cell should identify the best fit for each position and each person. The merger has changed the original paradigm and a greenfield organisation chart is in order. This is an important step in the evolution of ABB. This apart, Sawhney should take several other steps aimed at morale-building. Appointing mentors who can deal with apprehensions in the minds of employees is a good idea. Organising frequent listening-in and feedback sessions also helps. So do out-bound programmes which can foster team spirit. The idea is not only to reinforce the merits of the merger, but also to listen to the voice of the people so that mid-course corrections can be taken whenever necessary. A system of rewards and punishments linked specifically to the goals of integration would also help.
Mergers go sour when all the time and attention at the pre-merger stage is spent sorting out technical details, strategy, and financials. The success or failure of a merger depends on how effectively the underlying anxieties and fears of people on both sides are addressed-and on whether they are addressed upfront. Research shows that over half the mergers and acquisitions done in recent times have resulted in an erosion of market capitalisation. I suggest the following five-point action plan. First, Sawhney must recognize the fact that even in a merger of equals, one side feels it has won and the other, that it has lost. It is important to be sensitive to this factor. As part of a focused communication programme, Sawhney must constantly reinforce the strengths of the merger. He should put to rest the fears of job loss and provide an assurance that the dignity and respect of the individual will be preserved. Sawhney should come up with a common vision which encompasses the synergies of both organisations. The vision must incorporate critical elements which have a strong impact on relationships. These elements include values, attitudes and beliefs. An independent neutral facilitator or a consultant should anchor this exercise. With the help of the facilitator, the group should agree on a description that would define the soundest possible relationships in its ideal form. Many organisations try to work on hard facts without understanding the unresolved conflicts in the minds of employees. These conflicts pertain largely to relationship issues. However, relationships with a high level of candor, mutual support, trust and respect, will create a positive mindset and lead to enhanced results. It is important at this stage that the two groups come to a common understanding of the issues/projects at hand. The leadership of these projects would be based on what needs to be done. The rollout of the vision and values across the organisation must be accompanied by the development of action plans. Responsibilities must be clearly fixed on individuals. These action plans should be reviewed every month by a group headed by Sawhney himself. |
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ASHOK WADHWA
OM KAUL
LEONARD D'COSTA
