The biggest challenge Charles Paquin ever faced in the business world started with his first day on the job.
It also bears mentioning that Paquin wasn’t the newbie. The company was.
In April 2007, Paquin transitioned from the head of Resun Corp. to the president and CEO of ModSpace, a modular building provider officially known as Modular Space Corp.
The genesis of ModSpace — a 1,000-employee company that generated more than $500 million in revenue in 2008 — occurred when Resun acquired the modular buildings division of General Electric. It was a less-common form of acquisition in which a smaller company acquired a bigger company.
“GE’s modular space division was, at the time, probably the No. 1 or No. 2 player in the marketplace,” Paquin says. “Resun was probably three or four. GE had identified the business as a nonstrategic unit, and after looking at their [financial] portfolios, decided it was a business unit it made sense to divest themselves of.”
It was a strategic move designed to increase the newly formed ModSpace’s clout in the industry, but with it came a set of problems faced by many business leaders who take their companies through an acquisition or merger: combining of systems, finances, policies and, perhaps most importantly, combining cultures.
For Paquin, that was a major hurdle, given that the acquired business unit was previously held by GE, a corporate giant that carries an extremely entrenched culture and set of processes.
“Going into it, we recognized that bringing the two cultures together was going to be the biggest challenge,” Paquin says. “It’s often one of the biggest risks to any large-scale merger. You have to recognize that the cultures of the two companies are both outstanding, but when you try to bring the two together and they’re very different, that could potentially create a lot of risk.”