Prepare your people
VWR International is a company that can trace its roots back
more than 150 years. For the first 100 years or so — from the
company’s 1852 founding until the mid-20th century — the
company that would become VWR was relatively small in
scale. But as the business world started to expand, VWR began
to expand along with it, rolling up acquisitions and broaching
the European market in the second half of last century.
In the 21st century, VWR has been one of the companies that
has led the consolidation of the laboratory supply industry.
In the historically fragmented industry, companies switch
hands on a regular basis. In addition to its own acquisitions,
VWR itself has been bought twice in the last four years. In
2004, the company was purchased from Germany’s Merck by
Clayton, Dubilier and Rice. In 2007, CD&R sold the company to
Madison Dearborn Partners.
Acquisitions have many different ramifications to those in
management, but to those further down the ladder, they mean
one thing before all else: change. Ballbach says that as the head
of the company, your job is to keep everyone under your command ready for that change.
“How acquisitions affect a company from a people standpoint is always one of the things you have to take into consideration,” Ballbach says. “When you do these deals, you
inevitably bring about a lot of change, but this is something
we’ve grown accustomed to as an organization, and it’s something we expect.”
When VWR purchases another company, it is in the position
of having the more established culture and practices, so the
integration process normally involves assimilating the people
in the acquired company to the ways and means of VWR. Even
though the acquired company shares an industry with VWR, it
still takes time to plug people into their new roles.
To make the transition as smooth as possible, Ballbach and
his management team have instituted a process management
program that includes training, frequent communication and
feedback opportunities for employees.
“First and foremost, everyone wants to know how it’s going
to affect them directly,” Ballbach says. “Early on, following an
acquisition, we use what we call associate forums to communicate our goals and objectives. That’s part of the culture of
our firm even when we’re not implementing deals. We require
our executive leadership team to travel to all of our VWR main
locations at least once per quarter to attend associate forums.
The forums are an opportunity for us to stay in touch with our
employees, hear what they have to say and address issues like
acquisitions directly.
“When we acquire a company, we utilize the town-hall forum
since we’re doing them on a very regular basis to deal with the
messaging we want to put in place.”
The forums are led by VWR’s in-country management teams to
ensure that people are communicating with their most direct
managers. Ballbach says town-hall meetings are set up at
newly acquired companies as soon as possible to communicate VWR’s mission and objectives. One of the main keys to
achieving buy-in is to make yourself and your leadership team
visible as soon as possible after the purchase announcement is
made.
“We quickly communicate whatever we possibly can about
VWR; we welcome them on board,” he says. “It’s a very visible
activity. It leads to and fosters good understanding and a sense
of trust. So we let our newly acquired employees understand
our objectives, and we do a number of things like Web-based
sessions for the people who aren’t located close to a site.”
The senior leadership of the acquired company is engaged by
VWR’s leadership immediately after the acquisition is completed. The two groups quickly begin to construct and implement
an integration plan.
“We spend a lot of time communicating with them about their
role in the organization,” Ballbach says. “We spend a lot of time
putting their organization and our organization together to
understand how we can best coordinate the sales force, customer supplier issues, pretty much all tactical matters. We engage the executives of these acquired
entities very early in the process. We
want them to know that we care about
their role in the process and let them
know that we want them to have a role
in the process.”
Each acquisition is an opportunity to
encounter new people and an opportunity to make a new set of first impressions. Ballbach says the first impressions you leave will either help or hurt
your company when you encounter
future growth opportunities. The lesson
is probably one you learned as a child.
“It’s the whole idea of mutual respect,”
he says. “When you give people an
opportunity to be successful, it really
doesn’t matter what side of the fence
you’re on. People will be treated the way
they treat others. That is one of the universal truths I’ve learned about leadership. It’s the Golden Rule that is commonly associated with Christianity, but
it’s found in different forms in Judaism,
Hinduism, Confucianism and Buddhism.
It’s just a fundamental principle of how
you deal with people.
“Leadership is not what you know; it’s
what you do. To the extent that you treat
people poorly, that word gets out on the
street, and it makes it difficult to get
other acquisitions done. It’s a very competitive world, and if we were to become
known as a company that treats people
poorly, the other companies that come
up for sale over time aren’t going to be
interested in doing a deal with us.”
