Creating a High Performance Leadership Team in a Post-Merger Environment

Situation

A holding company acquired five unique software companies to offer advanced design and manufacturing capabilities while serving common customers: cabinet manufacturers and metal fabricators. The goal was to integrate the five businesses and create a more profitable entity under a single company banner.

Challenges

• Leadership issues among the combined entities were shaped by a culture of distrust, internal politics, limited cooperation, and poor communication.
• The merger brought together six U.S locations, four separate accounting systems and six phone switches, which created communication and efficiency problems.
• Dealers and resellers were unsatisfied with software performance, technical support, pricing, hostility and lack of communication from the newly merged company.

Solution

A Platinum partner was named president/CEO of the company, and a Platinum marketing consultant was invited to guide development of a strategic plan and help set the vision for an integration process.To form a high performance leadership team, the first step was to identify and resolve internal difficulties. Principles from Jim Collins’ book Good to Great were applied to get the “right people on the bus in the right seats.” Limited personnel changes were made and individual issues were addressed to make way for doing the right things for the team, holding each other accountable and engaging in healthy conflict. Metrics were established to measure team effectiveness.With leadership all on the same page, other initiatives were implemented to address post-merger issues. Finance systems were merged and a single VOIP phone system was implemented to help create some basic commonality among the groups. A single technology platform was established for accounting and unified messaging/communications.Wireless systems increased communications among all locations, such as weekly teleconferences to flag issues and priorities. Formal dealer forums, and informal listening and regional planning sessions addressed their customers’ needs.

Results

Leaders are working as a single team. Over a two-year period, the integrated entity has experienced an annual 18 percent increase in revenues and even better improvement in operating profit. The holding company is relying on the Americas business entity to play a key part in its global acquisitions platform and expects to make at least three new acquisitions in 2006.