Feb 20, 2021Liked by John Philpin

John, thanks for mentioning me in the newsletter, always flattering and fun, but I’m inclined toward this modest correction:

I was not involved in only 3 reorgs (managing two). Rather I have been impacted/involved in 16 re-organizations during my 30-year career, directing 2 of them. Sixteen? It seems beyond belief, even as I look back over those years, until we realize that 10 or so were driven by acquisitions and most for two companies (Cadence Design Systems and Synopsys) during highly-acquisitive periods of growth.

14 failures? The implication deserves explicit emphasis, because I can confidently assert that 14 failed, some of them in stunning fashion with many negative outcomes: more chaos, less trust, and often, diminished revenue (compared to executive projections at the time). Two significant factors that led to these failures might serve as cautionary tales for any of your readers who are heading into “strategic realignments” in their post-Covid returns:

1. Management’s decision to combine the necessary re-structuring caused by M&A with disciplinary actions (hiding the firings of problem staff behind the phrase “operational efficiencies.”). Sure, sometimes layoffs are a sad requirement of M&A (two competent people filling one administrative role) – driven by financial limitations; the flaw occurs when managers who have not addressed “problem staff” in their departments use the reduction to rid themselves of an employee they should have coached/disciplined long before the merger.

2. The second “failure factor” resides in the grandiose promises made (to employees, shareholders, the Board of Directors) at the outset of an acquisition – improved products, higher customer satisfaction, etc. I’d rather an honest message without unrealistic promises about life hereafter, and at TriNet, we insisted upon honestly acknowledging the coming turbulence, stating explicitly that it's going to be difficult for everyone (including customers): increased stress, missed deadlines, upended routines, broken processes. We kept a very public list, and addressed the list often.

One final comment: 16 might still seem uncomfortably high, but I always tried to keep a bit of perspective. At least I wasn’t Roy Sullivan, struck by lightning on 7 different occasions (a Guinness record). Or think of Tsutomo Yamaguchi, an engineer who survived the Hiroshima atomic blast and, though injured, struggled to return to his home in Nagasaki only hours before the second blast. Amazingly, he lived until 2010.

Whenever I hear myself complaining – about a job, or another reorg, or even the recent lockdowns – I try to remember the amazing Mr. Yamaguchi.

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