Mergers & Acquisitions: Stay or go?

Posted by Christopher S Penn on Mar 31, 2011 in Blogging, Marketing, Strategy | 0 comments

In yesterday’s post, we discussed the process of mergers and acquisitions (very roughly) and its implications for employees. Today, let’s talk about the career prospects for those employees.

Stay or go?

When companies merge, culture changes. Sometimes the change is slow and gradual, sometimes it’s immediate.  In cases where a large company acquires a small one, the culture and environment of the target company can  be obliterated overnight. Before you start making any decisions about things to do, you have to decide whether you even want to be a part of the new entity.

Fortunately, it’s easier than ever to research how things are at the other company. Start doing concerted searches on various forums and discussion posts about what the culture and level of happiness is for the other company (regardless of which one you’re in). If you find things aren’t quite so rosy, there’s a good chance that when the merger completes, things will be very not rosy in the merged company.

For that matter, if things aren’t so rosy in your own company, unless your company is likely to be dismantled and absorbed entirely into the acquiring company, things will actually get worse for a while. That should weigh on your decision to stay or go as well.

Your decision: go.

If you choose the path of go, then you need to immediately begin building out your base (actually, you should always be doing that no matter where you are or how happily employed you are). Mergers and acquisitions tend to take a long time – months, sometimes years – so if you’ve just heard about one, you have a little bit of cushion to get moving.

When I was doing recruiting and placement back in the day, I always advised people of my golden rule: never leap unless you know where you’re going to land. Don’t ever quit on the day you read about the merger on Mashable or in the New York Times unless you’ve got something lined up.

While you still have access to coworkers and resources, take the time to quantify and document all that you’ve done in your current role. If you have a sense of timing (say, from a press release about the merger), then take on or get involved with a project that will have a quantifiable impact and will likely be done before the merger is complete as a showcase piece for your personal portfolio.

Take the time to set up a thorough, complete profile on LinkedIn and garner as many legitimate recommendations as you can, especially from current coworkers, supervisors, and subordinates if you have any. Obviously, if you’ve done nothing noteworthy, this will be a harder task than if you’ve racked up some accomplishments.

We’ll cover many more of these tips in an upcoming social job search Webinar.

Your decision: stay.

If you choose the path of stay, then continue building out your base, but stay as attuned as possible to what will be changing in the organization. Especially in larger corporate mergers, there will be both overlap of job functions as well as new positions being created. Take advantage of your internal network to tune into what’s happening. Make a point to routinely visit human resources for internal job postings, not only to see if there are lateral or upward moves you can make, but also to look for the tone and tenor of what might be changing based on what the organization is looking to hire for.

Use social media to your advantage and find as many of your coworkers as well as future coworkers in the other company, then follow them and listen closely. See again if you can garner any sense of tone and information about what’s going on from the biggest possible picture. Do the same as above for yourself as well with regards to LinkedIn. Gathering legitimate recommendations for your profile about your current work is a stupid-simple asset to create that provides very public proof of your competence.

Here’s a obvious-but-not-obvious secret from the world of open source intelligence gathering: lots of little things add up. No one will outright talk about major organizational changes or major moves in a merger – such things are usually confidential. However, information leaks in little pieces all over the place. Let’s say, for example, that you’re following the developers you’ve identified in your organization and suddenly, simultaneously, their posts on Facebook or Twitter go from casual everyday stuff to career-focused stuff, or their posts go from average mood to decided negative all at once, all together. Combine that with sightings of the head of development spending a lot of time in a suit, talking to visiting executives from the acquiring company, and you might get a sense that your developer team has been identified for headcount reduction.

If your company is publicly traded, look for what your executives and other executives are doing with their stock shares, as they are legally required to disclose insider stock trades. If you suddenly see every major executive dumping shares, perhaps the merger isn’t going as well as it should be.

Ultimately, if you choose the path of stay, you have to do as much as possible to stay informed while racking up as many accomplishments as possible so that in a contest between you and an overlapping employee in the other organization, the only rational choice is you.

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Mergers and Acquisitions 101

Posted by Christopher S Penn on Mar 30, 2011 in Money, Strategy | 2 comments

In the wake of big merger news like AT&T and T-Mobile and in the social media world, the acquisition of Radian6 and Salesforce.com, I thought I’d do a short series on the bare basics of mergers and acquisitions (M&A) and what they mean to you. Bear in mind much of this is very basic – there are tons of nuances and variations on every aspect of this post, but this should cover the very basic mechanics.

Why do companies go through M&A?

Companies do M&A for a few basic reasons:

1. Acquire new products. Sometimes buy is cheaper than build, so you as the acquiring company just buy the company outright, rather than mess around with licensing deals. Salesforce and Radian6 would be an example here.

2. Acquire new assets. Some companies will be acquired for non-salesable assets (as opposed to products to be sold). When Southwest bought Airtran, it was speculated that this was because Southwest wanted an Atlanta hub. Sometimes companies are acquired simply for their customer base or market share, as with AT&T and T-Mobile.

3. Acquire new talent. Google is notorious for doing this, such as with Jaiku. They wanted the engineers and grabbed the entire company to get them.

4. Reduce operating costs or increase scale. Sometimes two companies can achieve greater efficiency or greater scale by merging. In the corporate world, this is a synergy merge. For example, Proctor & Gamble acquired Gillette not only for the product line, but also for a greater scale of manufacturing capacity and cost savings.

There is an underlying reason for all of these, however: companies go through mergers and acquisitions for an endgame goal of improved financial performance for shareholders. Remember this fact.

What happens during M&A?

Typically, prior to a merger happening, both companies do their due diligence in examining each others’ operations and financial performance. The value of the target company is negotiated on, and if everything seems like it would work well enough, contracts are signed and the merging process gets underway.

The acquiring company buys out enough ownership in the target company to effectively gain control over it. In publicly traded companies, this is done largely by buying shares of voting stock until the acquiring company owns a majority stake. In privately held companies, this is done by buying out owners of equity in the company from just a single sole proprietor to a team of shareholders.

Once ownership is acquired, shareholders are paid for their stake in the company and then the process of actually merging two companies together begins.

What happens to employees?

If you’re a shareholder of the target company, you get paid a cash sum or get converted shares. For example, if you were an employee of GTE that held stock in GTE back in the day, your GTE stock got converted to Verizon stock when the acquisition completed.

If you’re an employee of either company, you are effectively on notice. Here’s the thing about mergers and acquisitions: in order to achieve greater financial performance (which is the sole reason for M&A as stated above), you have to immediately reduce redundancies and inefficiencies. For every overlapping role in either company, one position will continue on and one or more people will be laid off. Let’s look at the human side of the four examples above.

1. Acquire new products. Everyone not tightly associated with the new products is probably getting laid off in the target company eventually. In the example, Radian6′s product team and probably a few of its service team will be kept in order to sustain development and service agreements, but other folks may not be.

2. Acquire new assets. If the asset requires staffing, such as the Southwest/Airtran example (new routes in and around Atlanta mean staff to operate them), they’ll be kept. If the asset requires no staffing, such as a database, then the target company’s entire team will probably be let go.

3. Acquire new talent. If you are the target pool of talent being acquired, life is good. If you’re not, you’re being let go. In the example, Google wanted Jaiku’s team and bought them out, but likely shed everyone who was not the engineering team.

4. Reduce operating costs or increase scale. This is the messiest of mergers as people in both companies are under the gun to demonstrate why they should be kept. It’s effectively a corporate deathmatch: two employees enter, one employee leaves, and employees in the acquiring company as well as the target company are at risk.

Remember this above all else: mergers and acquisitions happen for improved financial performance. Anything that doesn’t directly contribute to that in either company with regards to mergers and acquisitions is up for grabs. Also, bear in mind that there tend to be as many exceptions as rules when it comes to mergers. For every example and case I’ve cited here, you can easily name 10 cases where the consequences were different, even down to the endgame goal. Time Warner’s acquisition of AOL got them anything but improved financial performance, for example. Don’t take this very basic, very brief look at M&A as a canonical guide to what will happen if your company is going through a merger.

In tomorrow’s post, I’ll share with you some things you can do to either make yourself ready to be employed elsewhere or defend your position in a merger/acquisition.

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The Most Powerful Sales Technique in the World

Posted by Christopher S Penn on Mar 29, 2011 in Advertising, Sales | 11 comments

I’m about to reveal to you a sales technique that will make you more money, close you more deals, and bring you more sales opportunities than any other sales technique that I know of. If you master its usage and can bring the emotional and mental discipline to bear to use it, you will profit. It’s that simple.

Ready?

Shut up.

Yes, that’s the technique. Shut up. I have seen more salespeople lose deals or carve themselves into unprofitability from nervous speech than from any other sales technique failure. Marketers are especially bad at not shutting up. Once you’ve shared some information that should provoke a reaction, learn to keep your speech turned off  (and I say that because it includes text chat, email chains in your inbox, replies on Facebook, and conversations on the phone and in person) and wait for the reaction.

Why shut up? Because people think and process at different speeds. I’ve sat through sales presentations of mediocre salespeople that are literal 25 minute marathons of speech, uninterrupted. No chances for questions, conversation, or thinking, just a long run and a hope that by the end, the prospect is ready to buy. Rarely ever works out that way.

Why do we do this to ourselves? One of our failures as content generators, as content creators is the mistaken belief that we need to be providing speech as content all the time to keep a prospect engaged. Nothing could be further from the truth, but constant content seem like something we should be doing because of our online culture. Sometimes it’s from nervousness or a sense of awkwardness, but more often I think it’s from a sense that we should be constantly providing content as speech.

Here’s the even more secret flip side: if you master the ability to shut up and wait for the other person to say something, chances are their own nervousness at uncomfortable silence will provoke them into saying something first, and then it’s your game.

So how do you shut up? How do you subdue that sense of awkwardness, anxiety, and discomfort that comes from silence in a world that is anything but? Everyone will have their own methods that work best with them. My favorite that I picked up from my sales training days is to have an earworm stuck in your brain that you can invoke when needed. This song and video will buy you 5 minutes, 7 seconds of silence, more than enough to win any deal. Just replay it in your head:

The bonus of something funny like this video is that it will put a smile on your face as you replay it and enjoy it. Instead of playing a virtual or real staring game with sweat pouring down your face, you can mentally relax yourself in the middle of a meeting and reset any anxiety you’ve built up.

Learn the power of shutting up, and you’ll have an advantage that very few people are prepared to deal with.

And with that, I’ll shut up and let you talk in the comments.

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He who has the map, wins

Posted by Christopher S Penn on Mar 28, 2011 in Advertising, Marketing, Social media, Social networks | 2 comments

One concept that is vitally important to understand from the marketing white belt series is the idea that whoever has the map, wins.

We as human beings have a deep aversion to the unfamiliar. We have a deep aversion to going places where we are not familiar. We are creatures of habit, and this plays itself out in every aspect of our lives from childhood fears of the dark (and monsters in the closet) to adults rarely dining out any place new near our homes.

Thus, it should be no surprise that in a new landscape, we tend to grasp for the first map we see, for the first guide we can find, even if it’s seemingly wrong. If you’ve ever wondered why there is so much snake oil in any new landscape (remember web masters making $250,000 a year in the very early days?) it’s because of this factor alone. We grasp for any roadmap we can find, and will follow even a questionable map until the bitter end.

How do you give yourself the antidote against questionable people promoting questionable products? How do you inoculate yourself against vast, nearly unlimited amounts of snake oil and find the quality of people and knowledge you really want? Here’s a few tips:

1. Just as with medical vaccines, lots of research goes into the inoculation. The same is true for digital snake oil. Do your research, do your homework. Look for information that appears in many places, ask questions of people, and rely on your instincts to tell you when someone is being evasive.

2. Always have a goal in mind. It’s much easier to make a judgement about a map’s quality if you know where it is you want to go. If you don’t know where you are going or want to go, any map will do, and every “expert” will sound the same to you. Avoid confusion with a clear destination, even if the road there isn’t clear.

3. Be prepared and willing to change course often. Changing course often means admitting mistakes. Set expectations that you’re in uncharted territory for your company or organization and that as a result, you’ll be behaving like any explorer: stopping frequently to get your bearings, checking where you’ve been frequently, and changing maps & strategies as needed to better get where you want to go.

If you want to get somewhere with your marketing efforts in this still-new landscape, take the time to subdue your discomforts and anxieties, build your own map from research and experience, and get where you really want to go. You’ll pass the snake oil vendors on the side of the road, but you won’t be tempted off the road.

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Marketing White Belt: The Marketing Spirit

Posted by Christopher S Penn on Mar 25, 2011 in Advertising, Awakening, Marketing | 0 comments

One of the hardest things to do in sales and marketing is maintain a strong spirit in the face of adversity. No one knows this better than sales and marketing folks who are routinely rejected, sometimes in the strongest possible terms, on a regular basis by their audience. From doors being slammed in your face (sometimes literally) to widespread condemnation of your ideas, the world of marketing and sales can be brutal.

To take a little of the sting away, there are 3 things you need to have working for you.

Your community. Whether it’s a family, a circle of friends you can hit the pub with, or a social network, you need that community to turn to when the pressure is on, people you can rant to safely and vent off anger and frustration.

Your mission. If you have something worth believing in, some reason for you to get up on the rainiest Monday and race to work, then setbacks will be minor annoyances, speed bumps at worst. You’ve likely been on both ends of this spectrum. When you have something you believe in, nothing can stop you from achieving your goals. Conversely, when you don’t believe in what you’re doing, even a minor setback can be crushing and deaden your momentum. To the extent that you can, work for an organization that inspires you to believe.

Your indomitable spirit. Believing in yourself and all you are capable is by far the tallest order of the three, but it’s the one thing you can do that, if you master it, can provide you with endless motivation, endless resilience in the face of any setback or failure. How you develop that spirit is up to you. Some people find great meaning in running marathons or climbing mountains, building their spirits through physical challenges to overcome. Some people find great meaning in temples, mosques, churches, and synagogues, bolstering their spirits with faith and practice. Whatever path you choose to a stronger spirit, commit to doing it on a regular basis.

You. Your mission. Your community. If you can get all three working for you together, aligned and charged up, there is no setback in business or anywhere else that you can’t tackle and challenge right back. You won’t always win, but the resilience you gain from your spirit will let you jump back up after falling, ready to punch the next dragon in the face.

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