Managing Through Mergers, Acquisitions, and Divestitures
Surviving and thriving in the wake of a merger or acquisition requires communication, organization, and an keeping an open mind.
As the global business climate begins to slowly rebound after a lengthy downturn, mergers and acquisitions (M&A) are on the rise. In fact, data from a recent study revealed that global M&A activity increased 12 percent in 2010 over 2009, reversing a two-year decline.
Positive market conditions point to additional M&A growth throughout 2011 as economic conditions continue to improve, credit conditions ease, and corporations strategically utilize large cash holdings. This business environment will be driven primarily by attractive target valuations and domestic competition in 2011.
A study compiled by GE Capital Fleet Services of approximately 60 fleet managers discovered that while a few of the managers surveyed lost their jobs, the majority (71 percent) did not experience a job change, and just under half (44 percent) were even promoted. In other findings:
■ Seventy-one percent of respondents experienced a merger, acquisition, or divestiture in the past 24 months.
■ Only 5 percent have never experienced a merger, acquisition, or divestiture.
■ Eight percent were with the acquiring company.
■ Twelve percent lost their job.
■ Seventy-three percent of the fleets were integrated.
■ Twenty-seven percent of the fleets continued to be operated independently.
■ Fifty-nine percent of fleets reported benefits post integration.
According to Mark Smith, general manager of the Strategic Consulting Group for GE Capital Fleet Services, it's important for fleet managers to promote themselves and demonstrate expertise in multiple areas before a merger or acquisition ever takes place. He recommended that managers remain visible; continue cultivating data analysis, negotiation, and leadership skills; and take on job duties in addition to fleet management, such as travel, relocation, and procurement.
"In other words, make yourself invaluable to your company," Smith said.
Stay Engaged in the M&A Process for a Smooth Transition
When a merger, acquisition, or divestiture occurs, it can be a stressful - even a scary - time for fleet managers. Smith advised managers focus on the fleet considerations at hand immediately after being informed about a merger or acquisition.
"Make sure you have access to relevant information," Smith said. "View this as an opportunity to demonstrate expertise, add significant value, increase your visibility, and even advance your career."
He also stressed the importance of leveraging internal and external networks, developing engagement plans and timelines, and keeping it simple.
"Avoid the urge to overcomplicate," Smith cautioned.
Once a company has been acquired, managers should notify current suppliers, be prepared to work with the acquiring company as soon as possible, provide any necessary information requested, be prepared to change suppliers if required, and show resulting savings or possible cost increases.
Standardize Policies After a Merger or Acquisition
After compiling the results of GE Capital Fleet Servies' M&A study, Smith noticed several central themes repeated by many fleet managers after a merger or acquisition, including the standardization of policies and procedures.
One fleet manager respondent advised: "Be aware of subtle cultural differences that may be a significant barrier to harmonization of policies and processes."
Another manager offered: "Assume nothing. Emphasize open exchange of ideas, successes and best practices [and] communicate, communicate, communicate. Find a champion high in the organization."
Other recommendations from fleet managers who had experienced a merger or acquistion included keeping an open mind when assessing best practices, having a plan and adjusting as you go, and verifying inventory early.
The bottom line when it comes to a merger, acquisition, or divestiture, according to Smith: be patient, proactive, and visible.
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