These words set the stage for authors Mark Feldman's and Michael Spratt's
Five Frogs hits bookstores January 9.
The authors, partners in the merger and acquisition unit for Price Waterhouse and Coopers & Lybrand, have handled such transitions as Adobe Systems' acquisition of Aldus, Pacific Bell's sale of its Spectrum Services to IBM, and Microsoft's attempted acquisition of Intuit.
"High flyers, like telecommunications and software companies, do a lot of chest beating after a deal. They're flush with victory, play the king of the world scenario, and think they're done," Feldman said.
But most mergers fail in their execution--from achieving the objectives that drove the deal to returning the capital invested to conduct the transaction, he noted.
Speed, focus, and momentum are the keys to executing a transition, the authors say.
"A company should take all the necessary actions in the first 100 days after the deal is announced," said Feldman. "Customers and employees are willing to tolerate change and uncertainty in the first three months, but if a company hasn't shown any action in this time, apathy sets in and employees leave for competitors."
That action in the first 100 days should include stabilizing the company, building momentum and capturing early wins, he noted.
Stabilizing the company includes communicating to employees and customers the purpose of the merger and changes to occur, as well as establishing the company's "value drivers"--the 20 percent of activities that will yield 80 percent of the company's revenues and, especially, have the highest probability for success.
"I met with one tech company, whose executive said he knew what needed to be done for the transition. He handed me a document that was 1.5-inches thick and had 2,300 items," Feldman recalled. "There was not one revenue driver in sight. They had spent so much time on cost cutting and administrative missions that driving revenues was an after-thought."
Momentum comes from taking action by executing on the "value drivers," while capturing early wins involves achieving some of the objectives that lead to the merger.
Outside of their disdain for taking a slow transition approach, the authors have a list of the "seven deadly sins" in implementing transitions.
The list includes obsessive list making--as in the case of the tech company executive who produced that 2,300-item list, creating too many committees which later leads to a slow transition and little accountability, and holding the belief that over time two corporate cultures will merge through interaction, company banners, slogans or newsletters.
"If you want to have a single or integrated corporate culture, select those people who are role models and put them in a visible role and give them lots of recognition," Feldman said, adding that other employees will want to emulate those behaviors that are rewarded.
But how do you select the role models or management team quickly?
In Adobe's case, a behavior model was developed. When purchasing Aldus, Adobe had 75 candidates for 35 director positions, Feldman said.
"Adobe determined what the culture should be, and we built the model. Candidates took a one-and-a-half-hour interview and each candidate's results were super-imposed on the model," Feldman recalled. "Adobe wanted certain action-oriented and thinking behavior to dominate."
And when establishing transition teams, the number of teams should always be less than the number of items selected to drive revenues, the authors said.
Each team should limit its size to five or less people, in order to call meetings quickly, execute ideas rapidly and maintain accountability among its members.
With that in mind, here is a riddle that kicks off the book: Five frogs were sitting on a log. Four decide to jump off. How many are left?
Five. Deciding and doing are not the same thing.
Five Frogs on a Log, published by HarperBusiness, will hit the stores on January 9. The book is currently available, however, through online bookstore Amazon.com.