Tag Archive: M&A


I’m in favor of progress; it’s change I don’t like.” – Mark Twain

“ … Personnel. That’s for assholes.” – Clint Eastwood as “Dirty Harry”.

Your company was just acquired.

Your firm “merged” with another company.

Your new boss is an outsider, who knows next to nothing about you.

Consider each-and-every one of these changes to be a flashing-red-light warning or a shot across-the-bow of your career. .

There are always winners and losers when it comes to mergers and acquisitions. Ditto for new bosses, particularly those from outside the organization.

In all of these cases, It’s not only time, but most likely it is past time, to update your resume and enhance your LinkedIn profile.

Why?

Think of it this way: Whenever a new male lion enters the picture, the first thing he does is … eat the cubs of the previous King of Beasts. Translating to the work place, this parable means the “old” employees from the acquired, merged or new management companies are immediately vulnerable.

Can’t tell you how many times Almost DailyBrett heard laments from employees, who have been with an organization for 10 years, 15 years, 20 years, (gasp) 25 years. They expect their loyalty and experience to be recognized and rewarded.

Alas more times than naught, their self-perceived loyalty is regarded as stagnation or “dead wood” by new management. Worst of all, these folks are shocked when they are sooner-than-later laid off or simply terminated/let go.

“I wish I could trust you … “

During the course of my three-decade-plus career, the author of Almost DailyBrett quickly came to appreciate that virtually all of these changes serve as a warning, despite the tender contrary for the timing being words uttered by highly trained and incredibly skilled Human Resource professionals.

Keep in mind HR works for the organization not for the worker, especially the long-time employee. When it comes time to terminate/lay-off/let go of employees, the clinical execution will be swiftly carried out by HR.

Maybe Clint Eastwood was right about “Personnel” (What HR was referred to back in the 1970s). Let’s face it HR is not highly respected in any organization, a necessary evil … and in many cases, an evil indeed.

Once your author went eyeball-to-eyeball with a vice president of HR and said, “I wish I could trust you.” There is another less tender way of expressing the same sentiment. The message is still the same.

HR is not your friend. HR never was your friend. HR never will be your friend.

Self-Defense Strategies

Trust in Allah, but tie your camel.” – Arab Proverb

What strategies should you adopt to preclude being one of the cubs voraciously consumed by a new boss lion, mainly because you have been at the old firm for way too long?

  • Most new managers, particularly emanating from the outside, have their own views of how tasks must be done and they have their own ideas about who should be their lieutenants. Don’t even expect to be given the chance to compete for your own job, let alone a higher job in the hierarchy.
  • Don’t confuse loyalty and stagnation. What is one employee’s loyalty is a new manager’s stagnation. If you can count your years with an organization with two hands or more, it’s time or past time to move along on your own terms.
  • Never remind new superior(s) about how long you have been at an organization and the value of your experience. Instead demonstrate what you can do to assist their new future direction. The tried-and-true: “We tried that once and it didn’t work” will result in you being consumed by the new lion.
  • The world has changed. The notion of starting in the mail room, working for decades to become CEO and retiring with a gold watch is dead and buried. You will not be rewarded for your “tenure.”
  • Suing for age discrimination is a sure-fire loser. Who will want to hire you, if you “win” your suit? Most likely, you will be laid-off, requiring you to sign away the company’s liability in exchange for a golden kiss-off check.
  • In Silicon Valley, three years at a given organization signals in many cases a lack of ambition and stagnation. You should always be looking to the horizon. When the recruiter calls stop, consider that as a negative barometer.
  • Keeping “your powder dry” or “tie your camel” in the modern era translates into ensuring your resume, digital portfolio and LinkedIn profile are always up-to-date. It means scanning the horizon for other employment opportunities and applying for them from time-to-time if the fit is right.
  • Be ready to pull-up-stakes, if necessary. The green grass maybe even greener in another venue. Renting maybe a better option than a mortgage. If your mortgage goes underwater that can turn a job loss into an absolute nightmare.
  • In the week between your holiday of choice and New Year’s Day, you should always conduct a personal audit of your career. Recognize the subtle warning signs including not being included to important meetings and not being sought out for input from management. If it is time to move on, then do so on your own terms.

http://www.quotes.net/quote/58937

http://idioms.thefreedictionary.com/keep+powder+dry

http://www.joyfuldays.com/trust-in-god-but-tie-up-your-camel/

https://almostdailybrett.wordpress.com/2014/01/02/farewell-lsi-logic/

Advertisements

PR = SG&A?

Speaking before a group of Santa Clara University integrated marketing students recently http://www.scu.edu/, I presented them with an overly simplified but relatively accurate representation of a financial statement for a publicly traded company:

  • Total Revenues: $2.0 billion

–      COGS: $1.0 billion

  • Gross Margin: $1.0 billion

–      SG&A: $300 million

–      R&D: $400 million                  

  • Operating Income: $300 million

–      Income Tax: $50 million

  • Net Income: $250 million.

 

After providing them with a few nanoseconds, I asked the undergrads where does public relations or marketing or brand management fall within this financial statement. The unanimous answer following a bout of serious contemplation was SG&A or Selling General and Administrative. http://en.wikipedia.org/wiki/Financial_statement

I then inquired whether they were comfortable with that answer. What is SG&A? The answer is that selling, general and administrative is an “operating expense” on a financial statement. http://en.wikipedia.org/wiki/SG%26A

Do we really want PR, marketing, brand management, crisis communications etc. to be regarded merely as an “operating expense?” And if we interpret PR as an “operating expense” what will be the view of accountants and controllers in a Finance Department that are looking to control spending and improve the bottom line?

Do we really want to risk having your function zeroed out or greatly diminished in the face of mounting financial pressures? What does that mean in terms of job security?

How about a different way of thinking?

Doesn’t public relations contribute to revenues or the top line? Doesn’t brand management help expand gross margin? Doesn’t marketing play a key role in keeping a company in the black, rather than the red?

Before we go further in this discussion, please keep in mind that public relations/marketing/brand management/social media/crisis communications cannot defy gravity. If customers are retrenching in the face of an economic downturn, if inventory is building rather than declining, then an entire company will be impacted and most likely start reporting red bottom-line numbers.

And also be mindful that PR/Marketing/Branding will most likely always be classified by accounting types as SG&A. Nevertheless that doesn’t have to be our mindset. We need to convince internal decision makers that our responsibilities are not a mere operating expense.

Public relations practitioners can and should always demonstrate ROI or Return on Investment. Our jobs as communicators are not just to spread the good word to external audiences (e.g. customers, suppliers, partners, analysts, editors, bloggers…), but to internal audiences as well. And included in this definition of “internal audiences” are company executives, including the CFO and the company’s Finance Department. Think of it this way, these internal audiences make the hiring and firing decisions and more to the point whether we will receive a paycheck or not.

If the company is publicly traded, then it must report to the SEC and the world. Translated, the company must issue quarterly financial results, pre-announce all “material” differences from prior quarterly guidance, issue an annual report, hold a yearly meeting for shareholders, publicize all major M&A activity, and announce all major executive appointments and restructurings. A good public relations department will know how to effectively manage this information to get maximum mileage out of good news and mitigate the impact of bad news.

Aligning a corporate public relations department with the CFO, Investor Relations, Legal and Corporate Development in not only reporting to the SEC and investors, but becoming an integral part of their daily activities, is battle-tested job protection. We want a seat at the table.

What is the impression of existing customers and prospective customers to a company’s image and products? Obviously, the products have to work and the company needs to execute. Assuming that is the case, then how is the company building and enhancing its reputation? That sounds like an activity that is far more than just SG&A. Is marketing and brand management helping to drive revenues, expand gross margin and contribute to the bottom line? Yes indeed.

We need to document (not exhaustively) what we are doing on behalf of our clients. Whether we like it or not, contributing to our monthly reports should be a daily activity. It is far easier to remember what you did on Monday on that very same Monday, than a month later.  I have always been mystified by those who write their monthly reports two weeks into the new month. How can you accurately recount what you did six weeks earlier, 42 days or more ago?

The bottom line for public relations? Remember ROI, the top-line, gross margin, profitability and stay away from the dreaded SG&A mindsets. Besides who needs career-limiting thinking in this economy?

If you asked my opinion a year ago what is easier in a troubled economy, managing an agency or corporate PR team or selling a house, I almost would have laughed…well of course, selling a house is easier. Everyone knows that.

Right? Ah, wrong.

Working with at times irksome and annoying external or internal clients/stakeholders of varying degrees of talent and temperament demands tremendous amounts of patience and perseverance. There is simply no argument. In addition, a skilled PR practitioner must coordinate the development of the message, prepare the messengers, set the timing and target the recipients, what could easily be labeled as “communications choreography.”

That means that everyone is on the same page and singing out of the same hymnal (pardon the awful clichés). Is this process very similar to…staging a house for a sale? Let’s delve a little deeper into this comparison.

Working for an international public relations agency, you are aligned with a series of people with various tasks and hopefully the majority with the same agenda. There are the members of your own team, your agency bosses, your clients, their executives, their partners, their suppliers, the legion of analysts, editors, reporters, bloggers…Negotiating through this litany of humanity to achieve a desired branding or marketing result in a tough economy requires an incredible amount of resolve and fortitude.

And in the case of a publicly traded company, financial results must be reported four times a year, an annual meeting for shareholders must be conducted and the annual report (the 10K) must be issued each spring regardless of exogenous events. These could include: pre-announcements, mergers and acquisitions, IPOs, restructurings, mandated restatements or any other “material” event that requires immediate disclosure under SEC rules. That means that a company must not only employ PR people trained in telling the story, but also a legion of attorneys, accountants, controllers, IR pros and corporate development types to go along with the CEO, CFO etc…the folks that make up the team.

So does this same team building exercise and plan execution also apply to selling a house? Based upon my recent experience, I can safely reply in the affirmative.

A seller must interact with an assorted collection of contractors, pool remodelers, granite counter-top builders, “equity beige” rug installers, nosy neighbors, pest inspectors, house cleaners and pesky Realtors. If you think Mussolini had trouble keeping the Italian trains on time, try coordinating/choreographing this motley crew and keeping them to a schedule. There is no place in your schedule for the “manana” syndrome, but you will be asked repeatedly if this task or that task can be put off to another day. You have to resist the temptation of being too nice, while maintaining your professionalism.

In the corporate world, the SEC requires quarterly financial result reports, the 10K, annual meeting, and any “material” disclosures on the corporate side. Who serves as the SEC when it comes to a home sale? I guess that would be the seller…in this case, little Ole me.

Starting tomorrow, my house will go on the market first with the Realtor tour and then with open houses this weekend. My purpose in bringing up this point is to not market my house via my blog. I am helping my Realtor with the marketing and she is the one that will carry that burden.

My point is that I am sitting at the vortex of a $749,000 business…yes; selling your house is a business. A house sale has its own particular P&L statement: the costs associated with staging the house, the obligatory Realtor fee, paying off of the first and second mortgages and after all of that…hopefully something for me (e.g. the profit). I never thought that selling a house would be akin to managing agency PR or corporate PR teams and all of the associated players that are a necessary evil and require the same degree of people skills.

Guess this experience is yet another one of life’s lessons learned.

Guess I have been hanging around anal Silicon Valley engineering types way too long.

For those living outside tech hubs in California, Texas, Oregon, Arizona, New York, Massachusetts, Muenchen etc., geeks adore their charts, numbers and “data points.” They don’t do “nuance” or “ballpark” estimates; just the facts mam to the exact nanosecond or at least eight digits after the decimal point. That’s good calibration.

Microsoft is naturally populated with gear-heads, in fact thousands of them. They invented Word for documents, PowerPoint for presentations, but more to the point they created Excel spread sheets so we can populate these grids and columns with numbers and data points.

Why can’t senior public relations, media and marketing pros with liberal arts degrees use these same spread-sheet tools to weigh competing paths to determine the best course for our careers? We have all read about the jobless recovery nationwide and worldwide. Some are even suggesting that systemic European-style double-digit unemployment will be the new norm. I am much more optimistic.

In the last decade we experienced a severe labor shortage with a corresponding talent attraction and retention crisis. We should be prepared for a paradigm shift (there’s an oldie, but a goodie) from a Seller’s (employer) market to a Buyer’s (employee) market. Don’t be surprised if the days of multiple offers are right over the horizon.

Humor me. Let’s say that you have two competing offers. Will you simply just compare salaries and benefits and then consider who will be your boss and what will be your responsibilities? That’s not how an engineer would approach it.

The geeky engineer would get out his or her Excel spread sheet and create (at least) three columns: the first for the issue to be assessed, analyzed, probed and scrutinized; the second for prospective employer “A”; and the third for prospective employer “B.”

Filling in the data points on the spread sheet, let’s first compare the competing offers from Employer “A” and Employer “B.” Now factor in benefits (e.g. medical, dental, vision, IRA). Okay, let’s include bonus and related percentage of salary. Is the bonus paid yearly? Twice yearly?

Are both companies, private? If so, what are the chances that either or both will ever go public, and if so, is there an equity incentive for you?

Are both companies publicly traded? Or is one publicly traded and the other is not? What is the stock price and performance of the public company’s shares? What are the analysts saying?

Will you be given the opportunity to participate in ESPP (Employee Stock Purchase Plan) and offered stock options? Does that mean that opting for a publicly traded company is better than working for a privately held company or even a non-profit? Not so fast my friend. Maybe the privately held company will be acquired or opt for its own IPO. Or maybe it will just stand alone?

What will be your cumulative income including salary, benefits, stock compensation, employer IRA contribution etc after two years with Employer A and then Employer B?

What are the internal risks to the two jobs? Are you going to be pressured to drum up new business and reach set quotas? What are the consequences of not succeeding whether or not you have any influence (e.g. massive recession)? What are the external risks associated with the jobs? For example, could Employer A be acquired? Could Employer B come under severe scrutiny by the SEC? Every employer has rumors that go with them. What is being said on the grapevine?

Don’t just read the lines; read in-between the lines.

Now let’s add housing, weather and transportation to the spread sheet. Do you have to move? Will you be offered relocation? What are the living costs in one locale vs. another? What are the differences in culture and climate? Can you (and your family, if applicable) handle extreme heat? Endure bitter cold? Tolerate frequent rain and gloom?

Here’s a big one for many: How long is your commute and are there any alternatives to battling other drivers in a slow parade to-and-from work every day. Let’s say it takes you one hour on the average to commute in the morning and ditto for the afternoon. That translates into two hours each day, 10 hours each week, 40 hours each month and approximately 480 hours each year…you just lost 20 days of your year to commuting…How much is that worth to you in terms of not only wear and tear on your vehicle, but wear and tear on you? Does $20,000 sound right or about $1,000 for each day ($125 per hour) that you are losing to unproductive commuting?

Probably the most important contrast is where are you going to be career-wise with Employer “A” in five years compared to the same amount of time with Employer “B?” Assuming a positive working environment, what can you reasonably expect to be doing in five years with Employer A vs. what is your career path during the same time period with Employer B?

And let’s not forget what is the reputation and brand management history of the two prospective employers? Are you comfortable with the two stories, or one over the other, or neither of them? And do you want to be telling this story and building this brand for the next year, the next two years…

What do you want to be? Where do you want to be? What will be your quality of life? When and if the time comes to make a key employment, career and lifestyle decision, a geeky spread sheet may be the most important item in your tool kit.

%d bloggers like this: