311 Day

Or, in other words, my post due March 11.

As we've talked about the 7 S's this week, I've thought about the company I used to work for--GCom2 Solutions--and what happened with them when they were acquired by Bowne.

GCom was a mutual fund administration software company, and Bowne was a printer. Bowne figured that by acquiring GCom, it could attain the skillset and technology necessary to both prepare the regulatory financial statements AND then print them off and mail them for the client. It was a sort of vertical integration (to an extent)--but not necessarily a true one since GCom already had printing facilities and Bowne and GCom had very little--if not ZERO--previous work agreements.

Shortly after Bowne made the acquisition, half of GCom's employees were let go--those that were involved in the redundant printing operation. This certainly didn't do a whole heck of a lot for employee morale, and after several rounds of layoffs, Bowne is a shell of what it once was in the pre-acquisition days, and the handful of GCom holdovers (out of what used to be 200+ people) are just pure programming people.

Why didn't the acquisition work? Well, as someone who was close to the situation to some extent, I'd have to say that an important consideration is the culture, fostered by GCom's President who was forced to quit shortly before the sale of the company. His personal connection with countless of the employees who were nervous about the safety of their jobs would have gone a long way toward facilitating a less painful merger. He was in a position of trust--retaining him would have been in Bowne's best interest. He could have helped merge GCom into the Bowne culture. However, the powers that be at Bowne and GCom decided they didn't care for that option. Bowne went into a death spiral because it had bet the ranch on acquiring GCom.

What do I learn from this? STYLE MATTERS. Make sure cultures are compatible.