Rocco Di Lillo was CEO of Cooperative Resource Services for only a year before he was faced with the decision to sell the company.
Di Lillo was on the CRS board of directors for three years prior when other companies pitched the executive relocation company, but negotiations never progressed.
That all changed in September 2001, when $2.2 billion global corporate relocation service Sirva called to talk about an acquisition. Di Lillo then met with the 80-member investor group which owned CRS.
They decided it was the right price and the right way to part with the company.
“It was a phenomenal move for the investors and for a lot of the team members who either have larger responsibilities or global responsibilities,” says Di Lillo, who has since purchased an Atlanta hotel and an electrical manufacturer in Raleigh, N.C. “That’s what a strategic buy is all about. A strategic buy is a win-win for both entities.”
Di Lillo closed the deal on CRS in April last year. Here’s what he says made the process run smoothly for him and his buyers
Get personal
Di Lillo ensured CRS would continue to grow after the sale and maintain its Mayfield Heights location.
Decide what you want personally out the sale before you start negotiating with a buyer.
“Some people are interested in selling and getting out,” Di Lillo says. “It depends on the personal philosophies and the desires of the individuals selling the company. Identify your principles and desires, what you want to accomplish by the sale, and get clear about that, and make sure there’s an alignment between your goals and their desires.”
Put people first
If you’ve built a quality management team, a big part of what a company is buying is the intellectual capital of the people and that team, Di Lillo says.
“If you’ve strived to really provide a great team, then the buyer will pay extra for them.”
In most cases, key members of the leadership will remain the same.
“It’s common where the CEO, chairman, oftentimes the accounting and the IT, there will be some overlap, so they make changes there,” Di Lillo says. “It’s when the next level of management gets affected it can be negative. In our case, all those team members stayed and are now growing with the company.”
Prepare your employees
Communicating the acquisition process is crucial, Di Lillo says, but don’t start too early.
“There are a lot of people that kick the tires, per se, so it’s prudent early on to not necessarily communicate because it will create distraction and it also creates fear,” he says.
Once the sale is certain, company leaders should focus their communication on the goals of the sale, explain the steps of the process and help calm concerns employees may have.
CRS formed teams in its accounting, marketing and human resources departments to ensure a smooth transition for employees and customers, Di Lillo says.
“It’s a time-consuming component,” he says. “It’s 90 days minimum.” How to reach: Sirva Relocation, (formerly Cooperative Resource Services), (800) 341-5645 or www.sirvarelocation.com
Change happens
If your company is facing a major change such as an acquisition or a merger, the biggest barrier to success is not having the acceptance of your employees and customers, says to Joel Head, president of Independence-based consulting firm Headwinds Ltd.
“Organizations don’t change, people do,” Head says. “Too often executives focus on the artifacts of culture — how the department is organized, how division leaders are rewarded, how communication is managed — to initiate behavioral change. But, the artifacts don’t create the change; they are created by the change.”
Here are Head’s steps for successful change integration.
* If you want to change the way an organization operates, you must begin with the organization’s fundamental value system. If behavior is not acceptable, the problem rests with values that are either incorrect for the performance desired or that are not communicated effectively.
* Behavior influences relationships. Most of us rely on other people to reach our goals. The quality of our relationships determines the level of performance success we achieve, whether we are relating to the people with whom we work or with people in our personal lives.
* The high-performance organization is characterized by open, supportive relationships among team members. Employees in high-performing companies believe that their role is to serve customers, whether those customers are internal or external. In contrast, employees in lower-performing companies believe they have a job, not a role. Source: Headwinds Ltd., (216) 524-2000
