from partnering to road maps
TRANSCRIPT
From Partnering to Road Maps
Mohamed E. Hussein
BOOKS REVIEWED:
Rigsbee, E. 2000. PartnerShift:How to Profit from thePartnering Trend, 2nd ed. (NewYork: John Wiley & Sons, Inc.).
Hanson, P. (Forthcoming) TheM&A Guide: A 10-StepRoadmap for WorkforceIntegration (New York: JohnWiley & Sons, Inc.).
The past decade and a halfhave witnessed a greatdeal of action by compa-
nies toward closer links withcustomers, suppliers, and evencompetitors. These actions tookmany forms, from informalagreements of cooperation tooutright mergers and acquisi-tions. The impetus for suchactions can be attributed toheightened global competitionand rapid technological change.
Many companies are find-ing out that to survive in thecurrent environment depends onthe ability to deliver quality atlow costs and on time, whichcan be achieved with economies
of scale and skill that arebeyond the capabilities of manycompanies. Hence, the need forlinks with other companies. Theperceived synergies from suchlinkages are expected to resultin “win-win” situations.
For the most part, the out-comes were not as positive asexpected. The differencesbetween expectations and out-comes created the need forstudies that will summarize theexperiences and provide adviceto executives contemplatingsuch linkages. The two books,the subjects of this review,attempt to provide such advice.Both books are written forexecutives on how to plan andexecute successful linkages.
Rigsbee’s book is in its sec-ond edition, and it covers abroader spectrum of linkagesusing the term “partnering.”Rigsbee defines partnering:“Cooperative Partnering rela-tionships range from a simplecross-promotion to a handshakePartnering agreement to a for-mal strategic alliance or jointventure to mergers, acquisitions,
and partnerships.” The book is aprimer for executives “…onhow to successfully integrate thepartnering philosophy and strat-egy into your organization….”The book has a wealth of cases,stories, and anecdotes that thereader should find useful inunderstanding what works andwhat does not work in partner-ing. The book includes casesfrom as far back as the 1856sewing machines manufacturersalliance to the most recentmergers of ExxonMobil,Citigroup, and DaimlerChrysler.Mr. Rigsbee owns a strategicmarketing, management, andexecutive development firm. Hehas held several sales and mar-keting positions.
Rigsbee’s book has 11chapters and an appendix onlegal fees for partnering agree-ments. Chapter 1 sets thegroundwork and motivates thebook by asking questions suchas, What’s partnering? What’sin it for you? What’s needed tomake partnering work? Chapter2 discusses the partneringprocess and outlines partnering
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core values of trust, tolerance,understanding, cooperation,growth, caring, commitment,mutuality, and synergy. Thechapter also describes fivesteps necessary to get yourorganization ready for partner-ing. Chapter 3 lists the poten-tial challenges and pitfalls inthe partnering process. Theauthor outlines five areaswhere conflict may occur.These areas are conflicting val-ues, differing goals, fact-basedpitfalls, procedural-based pit-falls, and misinformation.
Chapters 4 through 9address specific types of part-nering. Chapter 4 is on externalstrategic partnering alliances. Itdescribes and gives examplesof 13 different types ofalliances that cover any situa-tion one can think of. Thesealliances range from the syner-gistic research alliance betweenthe Environmental ProtectionAgency and Amoco known asthe Yorktown Project to FordMotor Company and YahooInternet alliance. Chapter 5,entitled Partnering Allianceswith Your Suppliers, lists fourquestions that need to beaddressed if you want “outra-geously successful” relation-ships with your suppliers. Thechapter also lists different typesof supplier alliances. Chapter 6describes partnering with cus-tomers. The chapter’s advice is“to become so enmeshed withyour customers that they natu-rally come to you for solutionsto their challenges.” Chapter 7is about partnering with youremployees. The purpose ofpartnering with your employeesis to allow and assist employees“to become as effective work-ers and human beings as theypossibly can.” The chapter uses
the word PARTNERING as anacronym for the model of suc-cessful employee alliances thatis made of participation,acceptance, recognition, tellthe truth, safety-net, enthusi-asm, and renewal.
Chapter 8 is about owners,executives, and managers asoptimal partners. The chapteremphasizes the role of theexecutive suite in setting thetune for partnering. The chapteralso describes nonorganization-al partnering for individualdevelopment. One such allianceis the Gold Coast Speakerswhere members share experi-ences and counsel each otheron business, career, and person-al issues. The author is a mem-ber of that alliance.
Chapter 9 is on mergers andacquisitions. According to theauthor, other types of partneringcan be a prelude for mergersand acquisitions. The chapterincludes a discussion of manyof the megamergers that tookplace over the past few years,such as Exxon Mobil, AOL-Time Warner, and so forth.
Chapter 10 is entitledSuccess Strategies for Linkedand Blended Organizations. Itdescribes some of the chal-lenges that faced linkingorganizations and how thoseorganizations have dealt withthem. It quotes Sanford“Sandy” Weill, chairman andco-chief executive ofCitigroup, advising CEOsinvolved in mergers to makedecisions faster rather thanslower so as not to lose goodpeople who may leave whileyou are pondering who isgoing to do what. Chapter 11,the last chapter in the book,talks about PartnerShift in thefuture. The chapter’s point is
that partnering is important tobusiness expectations bothinternal and external. Finally,the book has an appendix onlegal fees for partnering agree-ments that identify the tasksinvolved and estimate thenumber of hours necessary.
The strength of the book isin the cases, stories, and anec-dotes that are used to make apoint. The weakness is thefinal chapter, which couldhave been a summary and con-clusion that put the ideas andsuggestions into more focusfor the busy executive.
USING A ROAD MAP
Next, I examined a soon-to-be-published book, Hanson’sThe M&A Guide: A 10-StepRoadmap for WorkforceIntegration.
One of the most dauntingtasks in mergers and acquisi-tions is workforce integration,starting with the executive suite.In many cases the decisions aredelayed or fudged by creatingco-positions such as co-chiefexecutives. The Hanson book ispresented as containing crucialinstructions for successfulworkforce integration by com-bining organizations. It isdescribed by the author as pro-viding step-by-step checklists, asample project plan, and tem-plates in both hard and softcopy. The book itself contains12 chapters and two appen-dices. One appendix is a sampleplan and the other is a list ofhuman resource’s (HR) fre-quently asked questions. Theauthor has 17 years of humanresources experience, where shewas involved in numerousemployee integration projects.
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Mohamed E. Hussein, Ph.D., is professor of accounting at the University of Connecticut (UConn) atStorrs, Connecticut. Dr. Hussein has taught in UConn’s undergraduate, MBA, EMBA, and doctoral pro-grams. He has served as resident director of UConn’s Program in European Studies at the Universityof Maastricht, The Netherlands, and was the Andersen Consulting Faculty Fellow at the University ofConnecticut. Dr. Hussein’s research has been published in a variety of professional and business jour-nals.
Chapter 1 uses a projectplan to describe the actionsrequired during the employeetransition process. Chapters 2through 5 outline the datagathering and analysis neces-sary before developing strate-gies and actions for workforceintegration. Chapter 2describes the steps necessaryto conduct HR due diligencereviews to detect any potentiallitigation, claims, or liabilitiesthat could impact the value ofthe transaction. Chapter 3includes templates and a chartto be used in comparing thebenefits plans of the twoorganizations so as to identifydifferences that need to beaddressed during the transitionperiod. Chapter 4 comparescompensation schemes andidentifies differences to bedealt with during the transition.Chapter 5 outlines how theanalyses conducted using thetemplates in chapters 3 and 4
can be used to develop com-pensation and benefits strategyfor workforce integration.
Chapters 6 and 7 describewhat leadership positions arenecessary in the combinedorganization and who are thequalified candidates, and identi-fy duplicate functions in the twoorganizations that need to beeliminated. Chapter 8 is aboutthe preparation of employeecommunication strategy.
The transition period isusually an unsettling time rifewith rumors and misinforma-tion for employees, as they waitto know their fate in the com-bined organization. A well-designed communications strat-egy that provides complete andtimely communications canallay employees’ fears and min-imize the impact of rumors andmisinformation. Chapter 9defines transitional datarequirements, and chapter 10 isabout the development of
employee retention strategy.Chapter 11, aptly entitled theSchool of Hard Knocks, is usedby the author to share with thereaders her experience andthose of others about potentialproblems and missteps in work-force integration. Chapter 12relates the success stories ofworkforce integration. Finally,the strength of the book is inthe templates, charts, andshared experiences. The largesize of the book allows for lay-outs that help the busy readerfollow all those details.
The two books complementeach other. Rigsbee’s book ismore general, as it discussesthe opportunities and chal-lenges of linking companies.Hanson’s book is a how-tomanual on workforce integra-tion. An executive can readRigsbee’s book to get the bigpicture, and use Hanson’s bookto plan the actual steps ofworkforce integration.