Say It: 'We’re So Glad to Have You with Us!'
In some acquisitions structured as tuck-ins, all that the purchaser wants to obtain is the book of active accounts. In others, the buyer may also absorb equipment and personnel. This scenario brings the arrival of outside people who don’t know what to expect from their new employer or what the employer is going to expect from them.
With some tact and advance planning on the buyer’s part, though, the welcome given to the seller’s staff can be both friendly and businesslike. Goodwill and team spirit created at this early stage will make subsequent integration issues easier to manage as they arise.
What could look friendlier to new arrivals on day one than personalized nameplates on their offices or at their workstations? Workspace identification is a good idea for everyone in the plant—that way, the newcomers will know how to find the veteran employees they’ll be collaborating with. Some of our New Direction Partners clients have set up internal mentoring programs that designate existing staff members as go-to people for those just coming on board. It’s the buddy system, and in an acquisition of this type, it works very well.
So do get-to-know-you parties and similar icebreaking social events. Do whatever it takes to make sure that a month or two down the road, the seller’s people will no longer be feeling like strangers. An us-and-them mentality is a threat to post-acquisition productivity—and so is the us-and-them language heard from disillusioned employees. A company where the existing and incoming sales groups are still going to lunch in cliques is a company with more work to do on the team-building side.
Certain kinds of personnel issues are best resolved ahead of time. Tuck-ins with staff transfers sometimes create redundancies in the head count, and while no one likes to eliminate positions, it’s a step that may have to be taken to make the transaction work.
In one deal we closed recently, the buyer knew that two jobs would have to be cut. The seller very graciously agreed to make the terminations before the new owner arrived to take charge, enabling him to reassure everyone there on his first day that their jobs were intact.
In another transaction, the buyer and the seller cooperated by trimming overlapping positions from each of their respective staffs. With the help of adjustments like these, personnel efficiency can go up in a tuck-in along with the increase in sales volume.
When two different groups of employees become one, pay structures and benefit packages will have to be reconciled. Benefits are easily squared by moving the newcomers into the buyer’s current health plan. Pay can be trickier, especially where sales compensation is involved.
Some of our clients have dealt with this by informing the incoming sales group that for a set period of time—say, one year—they will participate in whichever compensation plan is higher, their former employer’s or the buyer’s. After that, everyone will be brought into the same plan in a prearranged, surprise-free transition.
Something else to think about harmonizing is staff capability. If the seller’s production standards and processes weren’t as rigorous as the buyer’s, the new arrivals may need training to bring them up to the mark.
This shouldn’t be too burdensome if only a few newcomers are joining, but in larger situations, the difficulty will increase with the number of people brought in. This is why part of the buyer’s responsibility in due diligence is to find out where the performance gaps will be and what will have to be done to close them.
Clearly, merging printing and printing and packaging companies isn’t just about making the numbers work. There’s the human element to get right as well, and it’s a more complex proposition than buyers may realize. Qualified M&A advisement always includes firm guidance for the equally important “soft” side of the equation.
James A. Russell, partner at New Direction Partners, brings over 20 years of experience as a printing company executive having served as CEO of two family-owned graphic communication companies. During his tenure as owner and CEO of Arbor Press, a commercial printing company in Michigan, the company was an eight-time winner of the National Association for Printing Leadership’s (NAPL) prestigious Management Plus Awards program. Arbor Press was also recognized twice during his leadership as one of the 50 fastest growing printers in the country. Contact him at (610) 230-0635, ext. 703.