Build integration teams
The merger of Citation and Grede Foundries began in earnest about 10 days before the transaction was announced on Feb. 5. Grimm brought leaders from both companies together to begin mapping out a plan for how the new company would look, both during the merger process and afterward.
“We brought together the top 80 people along with the board of directors, and we set out the vision at the beginning,” Grimm says. “We had integration manuals for each person there and set up integration teams comprised of people from both companies, and we put people in charge of those teams with a set of expectations as to when things should get done — and if they can’t be done, get back to us on why you can’t meet a certain expectation and what we need to address.”
The integration teams were central to Grimm’s strategy and a way in which he put the future of the company in the hands of its people. The teams were set up by function within the company ranks, including account managers, sales, engineers, finance and IT. Grimm and his senior leadership staff helped formulate a set of area-specific goals for each integration team, designed to find the best practices between the two companies and implementing that practice in the merged company with as few roadblocks as possible.
“We wanted to figure out what we should be trying to accomplish,” Grimm says. “For example, in sales, the legacy Grede company was a sales-oriented company that had direct employees. The legacy Citation company used a combination of sales representatives in the field and direct sales reps. The integration team decided that we were going to use more direct sales reps. So we went from 18 manufacturing reps down to three.”
Bringing both sides together not only helped to identify best practices, it created a sense of familiarity among employees from both merging companies, and it helped speed along the process of familiarizing each company’s employees with the background and processes of the other. And, above all, it gave employees a way to make their opinions and input heard as the integration process picked up steam.
“The biggest thing in a situation like this is to get people involved,” Grimm says. “That is why I was trying to stay away from third-party consultants. You need people to take ownership in the integration, so that when you start to implement ideas, it’s their own ideas.”
To prevent complicating matters, Grimm and his management team laid down one additional ground rule for the integration teams: pick an existing process from either Citation or Grede. Combining processes, or re-writing the how-to book, was prohibited.
“Don’t create a new process — pick one or the other,” Grimm says. “Half the company is from either legacy Grede or legacy Citation, so if you pick an existing process, you only have to train half the company. Once you’ve picked a process, you can work together to improve it. But that’s the big key — you’re all working together by that point.”
Grimm says that in 90 percent of the cases, it will become quickly apparent which legacy company’s process you should use. It will cost less, you’ll be able to train employees with greater ease or it will fit your organizational structure better. However, whether the decision on a policy or process is easy or more difficult, you should always look to your metrics and benchmarks.
“You look at metrics and see if one company was doing a lot better in a set of metrics versus the other, and if that’s the case, you can see what path you need to take,” Grimm says. “You also see where you can get the most value. If it’s cost related, are you going to save more money by going from being centralized to decentralized in a function?
“Legacy Grede had more of what I’d call centralized cash management, where legacy Citation was more decentralized, but centralized it at a top level. It was kind of a hybrid model, where books were kept at the individual facilities, but the checks were written at the corporate level.”
