December 08, 2000, 3:48 PM — DANNY GLANTZ KNEW he had a big project in front of him. Glantz, network systems
analyst and one of 55 employees with Sierra Imaging, a developer of digital imaging
software in Scotts Valley, Calif., had to integrate his company's information systems
with the systems of a much larger company. In May Sierra was bought by Conexant, a
7,000-employee, Newport Beach, Calif.-based provider of semiconductor solutions for
electronic communications devices.
"Our newly merged IT team of five people prepared for an information systems
consolidation that we knew would be a big hurdle," Glantz says. "We had to converge two
networks. So we made sure that this issue was one of the first challenges addressed by
both staffs." Glantz and staff inventoried both companies' information systems and
computer equipment and then ranked which were critical to the newly formed larger
company's day-to-day software and hardware development needs.
The detailed work paid off. Sierra employees left the office on a Friday. On the
following Monday morning the staff returned to the office and logged back onto the
network without missing a beat. Glantz and team seamlessly integrated both companies'
Unix systems with Windows 95/98/2000 and Windows NT systems without any disruption to
Sierra's or Conexant's production schedule.
Communication eases the process
Preparation and communication were key to the transition's success, says Andy
Schloss, Sierra's vice president of software development. "The Conexant staff allowed
us to keep the Sierra working systems running. Everyone's jobs kept moving as the
changes rolled out. The reason the post-merger technological transition was so smooth
was that we communicated clearly what systems were crucial and what were not," Schloss
says.
Luckily for Sierra's staff, Conexant is an old hand at folding smaller companies
into the mix, having acquired 11 such companies in recent history. In the past year,
Conexant acquired Maker Communications, a provider of programmable high-performance
network processors, software solutions, and development tools, and Microcosm
Communications, a supplier of high-speed integrated circuits for fiber-optic
communications. In fact, Conexant has one full-time integration specialist who manages
not only the legal and accounting questions but also the IT issues that arise during
the merger and acquisition process.
Smoothing ruffled feathers
The stress and uncertainty that mergers bring to a target company's employees is
not to be taken lightly, says Tom Ruffolo, vice president of business development at
Conexant. Ruffolo knows this from experience. Although the Sierra merger was his first
with Conexant, Ruffolo has participated in two completed mergers and four initiated but
not completed mergers with his former high-tech employer.
Immediately after the Conexant and Sierra Imaging merged, Ruffolo met one-on-one
with some staffers in Scotts Valley. The vice president also held formal meetings with
two to three staff members from both sides of the acquisition. During these meetings
Ruffolo made it clear to the former Sierra -- now Conexant -- employees that he was
aware of the general challenges they faced post-acquisition. "In a larger company like
Conexant, there is more process involved in every decision. This tends to incite
feelings of losing control for employees of the smaller company," Ruffolo says. "I try
to counter those feelings by reminding employees that we have similar goals and that
their stock is now worth something. Having an open-door policy with all employees to
convey these thoughts when they are in doubt is important."
Adjusting to the acquiring company's culture and processes can be difficult for the
employees from the smaller company. Experts say that the transition takes time and that
employees on both sides of the deal need to adapt. "I definitely still feel more
comfortable talking with human resources and management from Sierra," Glantz says. "But
that's just habit."
Recognize the difficulties
Acknowledging that the transition is tough is the first step toward coping with the
changes brought on by a merger. "It's natural for an IT start-up with 50 employees to
feel swallowed by a 1,500-plus person company, as if by a whale," says Michelle Reina,
Ph.D., consultant, and co-author of Trust & Betrayal in the Workplace.
