Hunting elephants
While acquisitions can have financial benefits, getting people to work cohesively when merging different corporate cultures, pay plans and personalities can be a challenge for any leader. The assimilation of people into a shared mission and vision is so vital to the outcome that many companies fail because the balance sheet starts to
reflect the internal struggles.
As an owner of the Phoenix Suns, it seems natural for Heckmann to use sports analogies and philosophies as part of his people management plan. This was the case when
he discovered that the previous K2 CEO had all of the division managers competing for capital bonuses, a practice that was contrary to his vision of teamwork.
“There was no recognition of the other companies when we were out in front of customers,” says Heckmann. “Now we go in as a group to the customers and ask how we
can get more business.”
Heckmann says he gives strong support to his managers by allowing two to three years to get their numbers on track following an acquisition. However, he has little tolerance for those who resist the new company direction and appear to be working against the changes.
“I believe in the lead-elephant theory,” says Heckmann. “You shoot the lead elephant, and all the other elephants run off into the woods until a new lead elephant emerges
from the group. A good example occurred after the Rawlings acquisition. They thought that everyone would love them forever because they were Rawlings, and it was very
hard to get them to buy in to the fact that they were going to need R&D.”
After terminating the CEO and making other major managerial changes, Heckmann says that today, Rawlings has a successful R&D function, complete with a technical center staffed by 26 engineers.
Although acquisitions can mean the occasional need to perform an elephant execution, Heckmann says that one of the positive sides of the process is that, along with a new
company, he often gets great new managers.
“One of my greatest accomplishments was when we acquired Worth, we got Robert Parish,” the CEO of Worth who was promoted to president of Rawlings, says Heckmann.
“He struggled mightily, and he did some things that I wouldn’t have done, but I continued to back him until it worked.
“I think you need to back off as a manager and let the numbers be the litmus test.”
Given the continued retail consolidation and the lack of overall growth in the sporting goods market, Heckmann plans to continue to make strategic acquisitions
according to the model he has honed while pushing for continued new product development to facilitate growth from the stable of brands that K2 has collected. But
he says that no matter how much planning and experience a CEO brings to the table, each acquisition brings its own unique challenges.
“Every acquisition ends up being a giant headache,” says Heckmann. “Rawlings was a struggle for a year-and-a-half. But once you get the process finished, you can reap the
rewards. I’ve learned from every acquisition that I’ve done, and I’m still learning.”
HOW TO REACH: K2, www.k2inc.net