Surviving Mergers and Acquisitions:
An Interview with Michael F. Spratt
by Susan Pieper-Bailey
Michael F. Spratt is a San Francisco-based Partner with PricewaterhouseCoopers LLP in The Accelerated TransitionÆ Practice and has over 19 years of international experience consulting to businesses. Dr. Spratt is co-author of Five Frogs on a Log: A CEO's Field Guide to Accelerating the Transition in Mergers, Acquisitions, and Gut Wrenching Change, HarperBusiness, 1999. I recently interviewed him about what mid-career professionals can do to prepare for and survive these events.
What advice would you give to our members who are being impacted by a merger and/or acquisition?
Stay focused on core work. A merger/acquisition event is a period of high uncertainty which can be a major distraction. Many people get caught up in the distraction by participating in office gossip, spreading rumors, allowing projects to stall, and sometimes even neglecting customers. The best "personal" protection plan is to stay focused on doing the things that make the business successful, such as taking care of customers, key people and key projects. Those who do this stand out in contrast to distracted and unproductive employees.
Remember the following to help provide perspective: While it is true that people get cut all the time, generally, deals produce more opportunities rather than fewer. Four of the five top reasons for doing deals are related to growth. Most companies don't try to downsize themselves to greatness. Ultimately this creates new and exciting career opportunities for high performing people.
How can senior and middle managers create value during mergers and acquisitions?
Acquirors are paying large premiums for a brand, intellectual capital and market/customer relationships. To make the premium worthwhile, management needs to keep their best people focused on building the value of these assets. This means retaining and motivating people who add value, especially in critical technical, marketing or supporting roles.
Not all people in an acquired organization are deemed critical to future success. Most often, there are casualties in the administration and support areas, especially when the skills are readily available in the marketplace.
So should our members avoid infrastructure functions like finance and human resources?
No, I think talented and creative people are always needed in all functions. However, in these fields your members must recognize that restructuring is accelerated by a deal. Technical knowledge gets quickly outdated and with the growth of the Internet, has become a commodity. It is like everyone has access to a giant encyclopedia. The real challenge is to identify and develop transferable management behaviors, in addition to the technical skills. What's becoming more important now are the core management behaviors such as how do you analyze and solve problems, manage complex projects, take initiative, and make decisions to be effective. Your members can have great careers in these fields if they are willing to adapt to the rapidly changing organizational landscape.
What about making career transitions after being displaced by a merger/acquisition?
Your members should consider what they can do, will do, and want to do (They should) find their calling in roles that fit their individual operating styles, take advantage of their skills, and are aligned with their preferences. Too often we see people simply make decisions based on their capabilities. This can lead to roles that Ö might not be fulfilling.
Like most people, I thought that the heyday of mergers and acquisitions was in the late 80s to early 90s. What's going on today?
Actually, while there were a large number of big company mergers and takeovers during the time period you mentioned, you'd be surprised at the level of activity today. In fact, the M&A rate has increased and shows no signs of slowing any time soon. There were over 10,000 transactions in 1998 worth in excess of $1.3 trillion in market value and the forecast is that 1999 will be even higher. As competition increases in every sector, businesses have to grow either by developing new products or by acquiring them. Growth through acquisition is widely accepted as a way of keeping up with the breakneck speed required to compete in the Internet economy
