THE ULTIMATE LEADERSHIP CHALLENGE Leading a post-merger integration process between professional service firms

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THE ULTIMATE LEADERSHIP CHALLENGE

Leading a post-merger integration process between professional

service firms

Master thesis, MscBA, specialization Change Management University of Groningen, Faculty of Management and Organization

May 21, 2008

GERBEN ANNE POSTMA Student number: 1576321 Gentiaan 28 8471 WG Wolvega tel.: +31(0)6 300 56 722 e-mail: aloohaa@hotmail.com Supervisor University Drs. J. van Polen Drs. A.J.E. Schilder

Supervisor field of study Drs. A. Landlust Drs. A. van den Heurik Atos Consulting, Utrecht

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THE ULTIMATE LEADERSHIP CHALLENGE

Leading a post-merger integration process between professional

service firms

Gerben Anne Postma

ABSTRACT

Challenged by the negative track record of mergers and acquisitions and the fact that leadership in post-merger integrations plays a crucial role in understanding the outcome of a merger and acquisition, this research focuses on the importance of leadership in the post-merger integration process between professional service firms. Case study research was chosen to examine which elements of leadership positively influence the post-merger integration process between professional service firms and how these elements contribute towards the success rate of the post-merger integration process. Sixteen interviews have been conducted with managers who were involved in leading positions in three post-merger integration processes in the professional service industry in the Netherlands. Results have been analyzed, discussed and verified with three external experts. The three cases reveal that leadership is highly dependent on the background and starting point of the merger or acquisition. It became clear that especially vision, communication and empowerment were identified as people-related elements of leadership that can significantly contribute towards a successful post-merger integration process. To conclude with, this thesis provides guidelines for managers how to lead a post-merger integration process and in what way these elements that have been identified can make a difference.

Quote:

Success is the ability to go from failure to failure without losing your enthusiasm

Sir Winston Churchill Key-words: mergers and acquisitions, professional service firms, post merger integration, leadership, communication, vision and empowerment

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TABLE OF CONTENTS

ABSTRACT ... 2

1 INTRODUCTION TO THE RESEARCH... 4

1.1. Introduction... 4

1.2. Problem statement ... 6

1.3. Preview... 6

2 MERGERS AND ACQUISITIONS ... 6

2.1. Distinction between mergers and acquisitions... 6

2.2. Post-merger integration ... 7

3 LEADERSHIP IN THE POST-MERGER INTEGRATION... 8

3.1. People business ... 8

3.2. Elements of leadership in the post-merger integration... 9

3.2.1. Vision... 11 3.2.2. Communication... 12 3.2.3. Empowerment ... 14 4 RESEARCH METHODOLOGY... 14 4.1. Introduction... 14 4.2. Case selection... 15 4.3. Data collection ... 16 4.3.1. Procedure... 16

4.3.2. Construction of the interview questions... 18

4.4. Data analysis ... 19

5 RESULTS... 20

5.1. Acquisition of KPMG Consulting ... 20

5.1.1. Background... 20

5.1.2. Post-merger integration process ... 22

5.1.3. Leadership in the post-merger integration ... 24

5.2. Acquisition of BM Advies ... 26

5.3. Acquisition of Noordelijke Accountantsunie... 30

6 DISCUSSION AND CONCLUSIONS ... 35

6.1. Leadership in the post-merger integration process... 35

6.1.1. Vision... 36

6.1.2. Communication... 36

6.1.3. Empowerment ... 38

6.2. Significance of the findings ... 39

6.3. Limitations and recommendations for further research ... 40

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1 INTRODUCTION TO THE RESEARCH 1.1. Introduction

Mergers and acquisitions are a common feature of today’s business landscape and have become a primary strategic choice for organizations’ growth and expansion (Brusco, Lopomo, Robinson and Viswanathan, 2007; Lin, Hung, and Li, 2006; Lodorfos and Boateng, 2006; Stumpf, Doh and Clark, 2002). Although mergers and acquisitions between organizations start out with well-intended growth plans and offer considerable opportunities for value creation, empirical evidence shows that most mergers and acquisitions activities remain unsuccessful (Empson, 2000; Haspeslagh and Jemison, 1991; Marks and Mirvis 2001; Porter, 1988). Recent research indicates that between 50% and 80% of the mergers and acquisitions fail to produce intended results, as measured by shareholder value, return on investment or whether the intended objectives have been realized (Cartwright and Cooper, 2000; Schuler and Jackson, 2001).So, what is the secret to success?

Mergers and acquisitions have been studied by academics from different theoretical lenses who have sought answers to the question; why do most mergers and acquisitions fail (Epstein, 2004)? The past two decades, researchers focused more on the post-merger integration phase and discovered that this phase played a crucial role in understanding the outcome of mergers and acquisitions (M&A’s) (Birkinshaw, Bresman and Hakanson, 2000; Buono and Bowditch, 1989; Haspeslagh and Jemison, 1991; Jisun, Engleman and Van de Ven, 2005; Schuler and Jackson, 2001).

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5 leadership as a critical determinant of M&A success (e.g. Appelbaum, Lefrancois, Tonna and Shapiro, 2007; Covin, Kolenko, Sightler and Tudor, 1997; Gill, 2003; Haspeslagh and Jemison, 1991; Kotter, 1996; Sitkin and Pablo, 2005; Tetenbaum, 1999; Wren and Dulewicz, 2005). In spite of the plethora of studies about leadership in the M&A literature, Sitkin and Pablo (2005) argue that the role of leadership in M&A’s and its effect on the post-merger integration process has not been well studied. Burnes (2004) goes even further in suggesting that the high failure rate of large scale change indicates a lack of widely acknowledged theories or approaches of how to manage and implement large scale organizational change, such as M&A’s.

Although leadership is often treated as an important factor, it appears that the need to address the role of leadership substantively has been avoided in M&A literature. Moreover, Sitkin and Pablo (2005) and Wren and Dulewicz (2005) both conclude that especially those elements of leadership that can make a difference have not been systematically explored by practitioners or academics. Dulewicz and Higgs (2003, 2005) made a first attempt investigating which elements of leadership contribute towards successful change, however they argue that further research is needed to determine which key components of leadership should enable an increase in the success rate of M&A’s. Challenged by the consistently negative track record of M&A’s and the fact that the role of leadership often has been neglected or paid little attention to, while it appears to be a critical success factor, the intent of this thesis is to explore the elements of leadership that positively affect the outcome of the post-merger integration process.

This research is conducted in the professional service industry for two reasons. First of all, according to Lorsch and Tierney (2002, cited by Kwakman 2007) the professional services sector is largely unexplored within the scientific literature. Empson (2000) support this line of reasoning when concluding that it appears that empirical evidence of post-merger integration processes between professional service firms is limited. Secondly, there are good reasons to believe that the high failure rate of M&A’s in this type of industry is maybe even higher, because professional service firms possess characteristics that make leading the post-merger integration even more difficult (Bowen and Ford, 2002).

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6 choose to leave and take their skills and expertise as well as some of their clients with them” (Kreitl, Urschitz and Oberndorfer 2002, p. 442). It represents therefore the ultimate leadership challenge to retain these professionals and manage a post-merger integration process between professional service firms.

1.2. Problem statement

By focusing on several case studies, this thesis presents a contribution to the understanding which elements of leadership are needed, and in what way, to make a post-merger integration process successful. Furthermore, this study provides empirical evidence how post-merger integration processes between professional service firms have been managed in practice. And illustrates in what way these elements influence a post-merger integration process between professional service firms successfully. The main question of this research will therefore be:

Which elements of leadership positively influence the post-merger integration process between professional service firms and in what way can these elements contribute towards the success rate of the post-merger integration process?

1.3. Preview

This thesis is divided into four main parts. The first part provides a theoretical background. The second part outlines the method for data collection and analysis. Thereafter, the findings of the case study research are presented. Finally, the interpretation and conclusion of the found results are presented in the next section. Likewise the limitations of current research, the recommendation for further research and the implications for practitioners are included.

2 MERGERS AND ACQUISITIONS 2.1. Distinction between mergers and acquisitions

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7 rare (Fendt, 2005). Bakker (2003) states that the problems organizations face are similar and that both mergers and acquisitions are a form of integration. He therefore chooses an ‘umbrella’ definition and speaks of partnering or business integration. This is not to omit the differences between M&A’s, but in both cases, activities need to be integrated in some form or another. Therefore no distinction will be made within this research and both mergers and acquisitions will be called M&A’s.

2.2. Post-merger integration

During M&A’s three phases are distinguished: pre-merger phase, deal phase and the post-merger phase (Haspeslagh and Jemision, 1991).The importance of post-merger integration is derived from the fact that value creation can only begin when organizations are able to realize the M&A goals in the post-merger integration process (Haspeslagh & Jemison, 1991). Birkinshaw et al. (2000) argue that especially the post-merger integration phase is seen as the basis to realize the value or synergies that are envisioned with the deal that would not exist if the organizations operated separately. Value creation can only be realized as the result of achieving both strategic fit and organizational fit between the two organizations (Shrivastava, 1986). However, according to Epstein (2004) many organizations undermine the success of M&A’s when they start thinking about the post-merger integration process after the deal announcement has been made. The post-merger integration can be seen as an ongoing process that begins with the due diligence and runs through the whole M&A process in order to realize the strategic benefits (Ashekenas, DeMonaco and Francis, 1998). Furthermore, many organizations just view the post-merger integration as an ‘operational to-do’ (Chanmugam, Anslinger and Park, 2004) and do not focus on ways to increase the extent organizations can learn to cooperate (Haspeslagh and Jemison, 1991), combine their intangible resources (Probst and Raisch, 2005) and eventually create value from the deal. Although many managers believe that the integration process is very important, they often bypass the post-merger integration process to line managers or functional heads of departments, who become responsible for fulfilling the synergy effects and purpose of the M&A (Haspeslagh and Jemison, 1991). However, this only adds complexity to the situation and stresses the importance of involvement of top management during the post-merger integration (Haspeslagh and Jemison, 1991; Potter and Postma, 2007).

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8 psychical and socio-cultural. Procedural integration refers to integrating processes and procedures in order to develop homogenous work processes. Physical integration involves combining resources and assets that accompanies procedural integration. Finally, socio-cultural integration is about people-, socio-cultural aspects and establishing new leadership. Especially the latter is regarded as a make-or-break factor of any post-merger integration process (Buono and Bowditch, 1989; Schuler and Jackson, 2001).

Leadership plays a critical role in paying attention to these aspects and in constructing a new reality for the new combined organization (Jisun, et al., 2003; Potter and Postma, 2007). Several researchers point out that the lack of leadership is the vital missing link during the post-merger integration process (Haspeslagh and Jemison, 1991; Hay Group, 2007; Karp 2006). Shrivastava (1986) goes even further in arguing that a poor led post-merger integration has been a primary reason of the failure of many M&A’s. But why plays leadership such an important role in the post-merger integration process?

3 LEADERSHIP IN THE POST-MERGER INTEGRATION

There is nothing more difficult to take in hand, more perilous to conduct or more uncertain in its success, than to take the lead in the introduction of a new order of things. Because the innovator has for enemies all those who have done well under the old conditions and lukewarm defenders in those who may do well under the new.

Niccolo Machiavelli

3.1. People business

When change is considered as a process of an organization to go from its current state to a desired future state, such as a merger or acquisition process, leadership is required to deal with all the problems (Gill, 2003). Leaders have to state the direction, create commitment, motivate and inspire, and realize changes (Kotter, 1996). “Guiding the post-merger integration process takes someone who can jump into complex situations quickly, relate to many levels of authority smoothly, and bridge gaps in culture, human resources and perception” (Ashekenas and Francis, 2000, p. 108). Leaders have to set goals and guidelines and fit integrative actions into the overall objective of the M&A (Karp, 2006). Moreover, Galpin and Robinson (1997) and Karp (2006) both stress that leading the post-merger integration process is the ultimate change challenge for leaders.

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9 1990; Schweiger and Denisi, 1991). Moreover, according to Cartwright and Cooper (1990), these human resources challenges may hinder the ability of the organizations to achieve the synergies that were envisioned with the deal. Leadership is therefore considered to be both an essential problem as well as an important solution (Gill, 2003; Pablo, 1994; Stoker, 2005). For instance, the lack of leadership makes it difficult for employees to understand the objective of the M&A and eventually they will behave according their old patterns that could undermine the success of any M&A. Haspeslagh and Jemison (1991) conclude that leadership becomes crucial when employees of both organizations are brought together and are expected to embrace a vague concept. At the end, the failure of a merger or acquisition can often be attributed to human resources aspects and cultural differences (Bryson, 2003; Bueno and Bowditsch, 1989; Cartwright and Cooper 2000 cited in Lin et al., 2006).

However, in practice, leaders give priority to integration of tangible assets such as procedures, functional processes and cost economies, while neglecting or paid little attention to the integration of intangible assets, such as human resources and cultural aspects (Bryson, 2003; Buono and Bowditch, 1989; Cartwright and Cooper, 2000, cited in Lin et al., 2006; Hay Group, 2007; Shrivastava, 1986). That is striking because the tangible assets may look attractive, but in order to create value organizational, relational and human capital needs to be integrated (Hay Group, 2007). Leaders have to find the balance between the alignment of tangible assets and the integration of intangible elements in order to successfully lead a post-merger integration process (Hay Group, 2007). Not only structures and systems should be addressed, but also the employees and different cultures have to be integrated.

As mentioned before, little is understood about the competencies required to lead a post-merger integration process. So the question remains; which elements of leadership positively affect the outcome of the post-merger integration? Once identified, the leaders know where they have to focus on and what they have to do, in order to positively influence the post-merger integration process.

3.2. Elements of leadership in the post-merger integration

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10 leaders have to do, instead of identifying leadership elements that successfully drive the change effort. In addition, leaders should possess certain core competencies in order to be able to lead a post-merger integration process successfully. Competencies of leaders have been defined in terms of personal traits, behaviors, skills, values, and knowledge (Den Hartog, 1997). According to Bueno and Tubbs (2004) the word competency stems from a Latin word which means “suitable”. In other words, a competency refers to “an individual’s ability to respond to the demands placed on them by their environment” (Bueno and Tubbs, 2004, p. 80).

Dulewicz and Higgs (2003, 2005) made an attempt to draw clear links between personal competencies of leaders and leadership requirements. This eventually led towards a comprehensive set of leadership elements based upon as important dimensions of leadership considered by many authors in the organizational change field (e.g. Kotter, 1996). They identified three intellectual (IQ) and five managerial (MQ) leadership elements to add to the seven existing emotional intelligence (EQ) elements. The three IQ elements of leadership are critical analysis, vision and perspective. Subsequently, the MQ elements consist of managing resources, engaging communication, empowering, developing and achieving. Finally, the seven emotional and social elements of leadership are self-awareness, emotional resilience, intuitiveness, interpersonal sensitivity, influence, motivation and conscientiousness. Wren and Dulewicz (2005) use these fifteen dimensions to investigate which specific elements of leadership contribute to successful change in the Royal Air Force. Especially people related elements of leadership, such as communication and empowering, appeared to exert the greatest influence on the success of the change. These two elements are also often cited by other authors as important elements of leadership during the post-merger integration process (e.g. Buono and Bowditch, 1989; Cummings and Worley, 2005; Haspeslagh and Jemison, 1991).

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11 highly educated professionals. Communication and empowerment are identified as people-related elements of leadership that appear to exert the strongest influence on the success of an integration process (Wren and Dulewicz, 2005). This is supported by research of Cunha (2002) that conclude by stressing that good leaders in knowledge intensive organizations were mainly those who were able to stimulate empowerment and who communicated intensely with their employees. In this thesis communication can be seen as an umbrella term as it incorporates other components of leadership such as understanding employee’s fears and concerns, motivating employees and persuading employees to change (Burnes, 2004). As Burnes (2004) argues the purpose of communication is not just to announce to employees that a M&A is being considered but also allowing them to discuss fears and concerns openly.

In addition to these two people-related elements of leadership, it came to the fore that also a vision played a significant role to success in leading change (Wren and Dulewicz, 2005). This is in line with the literature in which the vision of a leader continuously recur as the basis and starting point in any post-merger integration process (e.g. Buono and Bowditch, 1989; Cummings and Worley, 2005; Gill, 2003; Kotter, 1996). According to Yukl (2002) a clear and compelling vision is needed to guide any M&A process. Gill (2003) mentions that at the heart of effective leadership is the ability to define and communicate a shared vision of the future. Without a clear vision any organization would drift purposeless (Alvesson and Sveningsson, 2003). From this perspective, this thesis will explore in further detail why vision, communication and empowering are particularly important leadership elements in leading a post-merger integration process between professional service firms.

3.2.1. Vision

“The essence of leadership is that you have to have vision. You can not blow an uncertain trumpet, it is got to be a vision you articulate clearly and forcefully on every occasion” (Theodore Hesburgh).

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12 where they are heading to and guide decisions and actions of the employees working in this hectic environment (Yukl, 2002).

“The key challenge for leaders in a post-merger integration process between professional service firms is to persuade highly autonomous individuals to share their technical knowledge and client relationships with their merger partner colleagues in times of uncertainty and stress” (Empson, 2000, p. 40). Future value cannot be created until capabilities are transferred and people from both professional service firms collaborate in order to create the expected benefits (Empson, 2000). In addition, professionals need to believe that they can create value and see their contribution in the overall vision translated into short term objectives. Reaching these goals helps employees envision that the M&A has been the right strategic choice and will help to encounter resistance. Besides that, Yukl (2002) mentions that people will support mergers or acquisitions, if they share a vision of a future state that is attractive enough to overcome the uncertainty and anxiety that occurs during the post-merger integration process. “Once employees understand the big picture, they can see the value of their own contributions” (Nanus and Dobbs, 1999, p. 80).

Woodward and Hendry (2004) discovered in their research that a leader’s vision is one of the most effective elements of leadership that helps employees adapt to organizational change. In their survey of 198 employees of financial services institutions, a sector comparable with the professional services industry, they found out that 93% of the employees argued that a vision during organizational change was the most important element of leadership. Eriksson and Sundgren (2005) argue that a shared vision plays a critical role in positively influencing the outcome of the merger and a shared vision should therefore be seen as a guide for all employees on all organizational levels.

3.2.2. Communication

“Communicate, communicate and then communicate some more” (Ashkenas et al., 1998, p. 176).

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13 merger or acquisition (Appelbaum, et al., 2000). In addition negative employee attitudes have a negative effect on the post-merger integration and hinder the organization to achieve the expected benefits of merging into a new organization (Cartwright and Cooper, 1990).

Faced with the challenges in the post-merger integration, communication is a key element in keeping employees’ motivated, gain commitment and in increasing their willingness to stay in the organization (e.g. Alvesson, 2000; Graebner, 2004; Jemison and Sitkin, 1986; Kreitl et al., 2002; Løwendahl, Revang and Fosstenløkken, 2001; Schweiger and Denisi, 1991). Graebner (2004) discovered that organizations whose leaders engaged in retaining and motivating employees were more likely to successfully lead the post-merger integration and thus achieve the expected value contributed by the M&A. Epstein (2004) argues that communication from the leader is one of the most important drivers of success of a M&A. Communication is the cornerstone of successful leadership (Griffith-Cooper and King, 2007). Long-term successes of a merger or acquisition can only be accomplished through effective communication to the concerns and expectations of the employees (e.g. Appelbaum et al., 2007; Birkinshaw et al., 2000; Buono and Bowditch, 1989; Daft, 1999; Goodman and Truss; 2004; Wren and Dulewicz, 2005).

Appropriate communication helps employees understand the need for the merger or acquisition as well as the effects of the merger or acquisition on their personal function (Goodman and Truss, 2004). Most employees are only interested in what kind of impact the merger or acquisition has for them. Employees need to know if they are kept on board and if so, their new roles and responsibilities must be articulated clearly (Daniel, 1999; Epstein, 2004). Schweiger, Csiszar and Napier (1994) found that the message should focus as much as possible on the direct impact of a M&A on employees. Employees whose functions are eliminated should also be informed as soon as possible and assisted in finding new employment (Epstein, 2004). Leaders that communicate directly towards the concerns and fears of employees may able to expect increased employee commitment and thus achieve effective integration (Schweiger and Denisi, 1991).

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3.2.3. Empowerment

“An empowered organization is one in which individuals have the knowledge, skill, desire, and opportunity to personally succeed in a way that leads to collective organizational success” (Stephen Covey).

When employees feel excluded from the integration process, resistance is likely to emerge (Haspeslagh and Jemison, 1991; Hay Group, 2007) and could result in undesirable turnover. The loss of key personnel can seriously undermine the potential value of a merger or acquisition in leaving an “empty shell” for potential merging partners (Løwendahl, 1997). According to Cummings and Worley (2005) one of the most effective strategies for overcoming resistance is to involve employees in the process. In this research empowerment is defined as involving employees in the post-merger integration process. The leader gives responsibility to the group members (Arnold, Silvester, Patterson, Robertson, Cooper and Burnes, 2005). During a post-merger integration process, employees can provide a diversity of information and identify pitfalls and barriers to integration (Cummings and Worley, 2005). Furthermore through empowerment each person can then see his or her role in the overall vision and goals in order to feel that his or her contribution is valuable (Cagle, 2007).

Moreover, “if client relations, professional competences, and other types of value creating combinations are held by employees, the M&A must be based on consensus with these resource holders, otherwise they are likely to withhold or reduce their efforts to an absolute minimum”(Løwendahl 1997, p. 141 ). In the case of professional service firms where employees are the most critical resource of the organization, empowering is crucial. These employees have considerable autonomy in performing their job (Empson, 2000). According to Løwendahl (1997), the paradox is that employees of professional service firms do not want others to say what they have to do and intervene in their decision process. This is primarily due to the fact of the reversed power structure of professional service firms, in which employees have control over the most critical resource for value creation, namely themselves (Løwendahl 1997). Empowering the employees as participants of the change process will result in more positive attitudes and actions towards the post-merger integration (Gill, 2003).

4 RESEARCH METHODOLOGY 4.1. Introduction

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15 each post-merger integration process is different and based on a unique set of variables determined by the broader business environment (De Lange, McDonald and Coulthard, 2007). In addition, leadership is highly dependent on the context in which the leader operates (e.g. Haspeslagh and Jemison, 1991). This implies that the organization context and situation need to be considered when conducting research about leadership (Karp, 2006). In an effort to share an understanding whether and in what way vision, communication and empowerment and maybe other elements of leadership positively influenced a post-merger integration process, a case study research approach was adopted in this research. Investigating post-merger integration processes is dominated by case studies and is therefore a particularly appropriate research method (e.g. Buono and Bowditch, 1989; Cartwright and Cooper, 1990; Fendt, 2005; Frommer 2001; Haspeslagh and Jemison, 1991). In addition, managers often complain about the practical value of scientific research. For this reason a case study approach allowed investigating in detail real-life post-merger integration processes (Yin, 2003). The case studies provided empirical evidence which can be used to compare the existing literature on how to lead post-merger integration processes and what strategies made a case into a success story (Sitkin and Pablo, 2005). Multiple comparative cases have been selected in order to provide more validity and overcome the vulnerabilities associated with single case studies (Yin, 2003). Besides that, the first case study was conducted as a pilot study and served as final preparation for data collection, because it was easier to access (Yin, 2003).

4.2. Case selection

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post-16 merger integration processes and who were willing to provide perspectives. The following M&A’s in the professional service industry were selected as representative case studies:

- Case 1: The acquisition of KPMG Consulting by Atos Origin in 2002; - Case 2: The acquisition of BM Advies by Royal Haskoning in 2005;

- Case 3: The acquisition of Noordelijke Accountantsunie (NAU) by Accon avm in 2007.

4.3. Data collection

Data has been collected via literature study and interviewing. Purpose of the literature study was to identify elements of leadership that played an important role and in what way they contributed towards a successful post-merger integration process between professional service firms. Literature has been gathered using books and scientific articles through databases on the Internet (e.g. EBSCO Business Source Premier). Collected data derived from the literature review functions as input for the interviews.

The second part of the data collection was gathering information through interviewing participants who were involved in a leading position in the selected post-merger integration processes. According to Buono and Bowditch (1989) interviewing is appropriate given the context in which the research took place. Semi-structured open-ended interviews were conducted to elicit information based upon important elements of leadership and gave insights in the post-merger integration process. In this way, it was possible to have a better understanding about what it takes to lead to post-merger integration process between professional service firms and to ask further if certain elements needed explanation. By means of interviewing, this thesis adopted a retrospective approach which means that the focus lay on looking back at how the selected post-merger processes have been led.

4.3.1. Procedure

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Table 1

Respondent characteristics

Nr. Organization Participant and function Reason to interview Date

1.1. Boer en Croon R. Lubberding Partner Boer & Croon Corporate Strategy

Involved as former partner of KPMG

Consulting

30-01-2008

1.2. Atos Consulting Drs. F. Kuitems Partner

Involved as former manager of Atos Origin

COPM

05-02-2008

1.3. Atos Consulting Drs. H.G. Krekel

Managing partner & Line of business leader Financial Services

Consulting

14-02-2008

1.4. Atos Consulting Drs. N. Heijster RA MBA Managing partner & Line of business leader Public Services

Involved as former CFO of KPMG

Consulting

18-02-2008

1.5. Atos Consulting Dr. R.J. Streng

Partner and assistant professor at Free University Amsterdam

Involved as former manager of Atos Origin

COPM

18-02-2008

1.6. Atos Consulting Prof.dr.ing. J.T.M. van der Zee Executive Partner and Director Trends Institute Atos

Consulting and Professor Business Transformation & IT at Tilburg University

Consulting

04-03-2008

1.7. Atos Consulting Drs. L. Wildeman Executive Partner Involved as former partner of KPMG Consulting 04-03-2008 2.1. Royal Haskoning BM Ir. M. Vink Director

Involved as the new director of Royal Haskoning BM 20-02-2008 2.2. Royal Haskoning BM P.H.N. van Kessel Division Controller Involved as former CFO and partner of

BM Advies 20-02-2008 2.3. Royal Haskoning BM Ir. R. Reedeker Vice-Director Involved as former director of BM Advies 26-02-2008 2.4. Royal Haskoning BM Ing. J.M. Morsink

Director Advisory Group Real Estate

Involved as director advisory group of Royal

Haskoning

27-02-2008

2.5. Royal Haskoning BM

Ir. F.J.S. Van Eindhoven Director Advisory Group Health Care Involved as director advisory group BM Advies 05-03-2008 2.6. Royal Haskoning BM Ir. P.C.M. Zwinkels Director Advisory Group Project Management

Involved as director advisory group of Royal

Haskoning

07-03-2008

3.1. Accon avm Ing. H. Marissen A.A. Region Director

Involved as the new director of provinces Groningen en Drenthe

(former NAU)

10-03-2008

3.2. Accon avm Drs. A.G.M. Janssen MBA Manager Business Support

Involved as member of the integration team responsible for finance

and control

11-03-2008

3.3. Accon avm Drs. E.J.M. Hondeveld Head Marketing and Communication

Involved as member of the integration team

responsible for

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18 communication and cultural integration 4.1. Philips International B.V. C. Medendorp

Program manager of Philips Corporate Investments

External expert 27-02-2008

4.2. University of Utrecht and Innovation, Culture & Change

Dr. ir. P.R. Prud’homme van Reine

Management Consultant, Researcher and Educator

External expert 12-03-2008 4.3. Nyenrode Business University and Javelin Partners Prof.dr. H.J.C. Bakker Professor in Strategic Management and Business Integration and managing partner of Javelin Partners.

External expert 17-03-2008

Participation in the survey was entirely voluntary. The leaders were contacted by email or by telephone. The email contained information about a brief description of the content and the purpose of the research, the e-mail format can be found in Appendix 2. All interviewees were informed upfront, that provided information will be handled confidentially and only used for this study. This guarantee of confidentiality intended to remove any hesitations with regard to the responses. After one and a half week the non-respondents were contacted again with the request to cooperate. One hour was the estimated time for each interview, albeit naturally some deviations occurred. Each interview was tape-recorded and also notes were made during the interviews. Interviews were transcribed and summarized as soon as possible following the interview and were sent back to the respondents for comment and approval. This enabled the resource person to verify the findings from the interview. In this way, validity and accuracy of the gathered data could be assured. After that, the data could be analyzed.

4.3.2. Construction of the interview questions

The interview was introduced by explaining the purpose and background of the research. Followed by general questions in order to understand the background of the M&A, such as: “What were the drivers to engage in the M&A and if the respondents had experience

in leading post-merger integration processes?” There were also questions posed to clarify

and understand the post-merger process in general, for instance: “How should you measure

the success of a post-merger integration and what went right and what went wrong during the post-merger integration process?”. Thereafter, respondents were asked to clarify more

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19 respondents were asked to answer questions regarding the elements of leadership vision, communication and empowerment which considered playing an important role in the post-merger integration process. Interview questions concerning these three elements of leadership were derived from valid and reliable multi-item scales of previous studies (e.g. Miller, Johnson and Grau 1994). This meant that items have been adapted to the context (i.e. post-merger integration) and that some items needed translated into Dutch.

First, the items that aimed to measure the concept ‘vision’ derived from the Inspirational Leadership Questionnaire developed by den Hartog (1997). Nine items were transformed into interview questionnaires applied on the post-merger process. Example question are: “Is it important that the leader articulates a vision of future opportunities during

a post-merger integration process?” and “Is it important the leader talks optimistically about the future during a post-merger integration process?” Subsequently, the items regarding the

measurement of empowerment have been based on the validated and reliable scale ‘empowerment’ derived from the Charismatic Leadership in Organizations questionnaire (CLIO) developed by de Hoogh, Koopman and Den Hartog (2004). Example question is “Is it

important that the leader stimulates employees to develop their talents during a post-merger integration process?” In addition, the interview questions about the quality of the

communication during the post-merger integration process stems from six items developed by Miller, et al., (1994). One of the questions asked is: “Is it important that the information

received by employees about the post-merger integration process is timely?” Finally,

interviewees were asked to describe their ‘lesson learned’ or what they should have done differently in order give recommendations about leading a post-merger integration process. The interview questions are presented in Appendix 1.

4.4. Data analysis

The purpose of the data analysis was to discover patterns, draw conclusions and relate the findings from the interviews to the proposed assumptions (Yin, 2003). Although the research was well prepared, the interview guideline and the methodology used in this research have been analyzed by experts in the field of post-merger integration processes. This evaluation served as final preparation for data collection. Additionally, the results of the research have been verified, analyzed and discussed with three experts in the field of leadership in the post-merger integration.

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20 background, leadership in the post-merger integration process and moreover how the leader puts his or her vision, communication and empowerment into practice. Other elements of leadership that occurred during the interviews were also categorized. This enabled to organize large amounts of information and discover patterns that showed which elements of leadership play an important role and how they contribute towards the success rate of a post-merger integration process. In this way it is easier to understand and manage data and identify key themes or patterns from them for further exploration (Yin 2003). Each single case has been analyzed on the key themes mentioned above, followed by drawing cross-case conclusions. Finally, the collected data has been compared with the theoretical background.

5 RESULTS

In this chapter, the results of the case study research will be presented. The chapter is divided into three case studies that have been undertaken. First of all, the acquisition of KPMG Consulting in the Netherlands by Atos Origin will be described in section 5.1. Followed by the acquisition of BM Advies by Royal Haskoning. Finally the acquisition of Noordelijke Accountantsunie by AcconAVM will be described in paragraph 5.3. Each case presents the results of the interviews that were undertaken with managers who were involved in leading positions in the particular post-merger integration process.

5.1. Acquisition of KPMG Consulting

The first case concerns the acquisition of KPMG Consulting in the Netherlands and in the United Kingdom in 2002 by Atos Origin. This case describes the post-merger integration process in The Netherlands.

5.1.1. Background

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21 (Krekel, personal communication, February 14, 2008). Additionally, KPMG Consulting wanted to move the business into public ownership to ensure that talented key-professionals were attracted and to keep them attached to KPMG with e.g. stock options (Wildeman, personal communication, March 4, 2008).

After that, the Enron-scandal and other corporate governance problems arose in the United States and resulted in pressure to separate the regulatory responsibilities of auditors from their commercial service operations. This meant the end for the ‘one-stop’ advisory organization (Lubberding, personal communication, January 30, 2008). The influence of the consulting partners in the decision making process to divest KPMG Consulting was limited, because accountancy was represented by 260 partners and the consulting section only by 40 partners. According to van der Zee (personal communication, March 4, 2008) it felt that the accountancy-partners wanted to get rid of the consulting partners.

It was not an easy decision to leave KPMG, because KPMG was a strong brand name and had a worldwide network of clients (Wildeman, personal communication, March 4, 2008). Besides that, there was also a group of partners who saw enough perspective within the rules and legislation to keep practicing their profession at KPMG. Both partner groups had the ambition to attract or to keep the best key-professionals on board and the whole KPMG Consulting organization felt in two parts. It was a difficult, turbulent and chaotic period (van der Zee, personal communication, March 4, 2008 and Wildeman, personal communication, March 4, 2008).

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22 developments that occurred during the deal-making process made the post-merger integration a challenging and remarkable process and resulted in certain implications for leadership to be discussed next.

5.1.2. Post-merger integration process

The bursting of the Internet bubble resulted in hard times for consulting services. During this economic downturn, the primary focus was kept on the day-to-day business and for a period of two years no attempts were made to integrate, collaborate or work together in one way or another. The transparency of the results contributed that everyone was alerted to keep the day-to-day business running (Lubberding, personal communication, January 30, 2008). Thus, the first two years of the post-merger integration process from 2002 till 2004, the consulting and project management (COPM) department of Atos Origin and KPMG Consulting operated autonomously in the same organization trading as Atos KPMG Consulting but were located at different offices.

In the beginning of the post-merger integration process Atos Origin COPM employees visited KPMG Consulting in De Meern to investigate what actually was acquired and to get to know their new colleagues. After a lapse of time, the consultants and project managers of Atos Origin did not show up anymore at the office of KPMG Consulting, because they had the feeling that they were not welcome. The curiosity that actually was expected from a consultant to get to know their new colleagues and to look for synergy was not present (Krekel, personal communication, February 14, 2008). Any attempt to integrate was seen as an attack on the KPMG-heritage which had to be preserved at any cost. Many KPMG Consulting partners looked back and images of the former KPMG Consulting operating in a booming economy were idealized (van der Zee, personal communication, March 4, 2008, Wildeman, personal communication, March 4, 2008). Every negative decision was pointed to Atos Origin, while these sorts of decisions also had to be taken if KPMG Consulting stayed at KPMG (Kuitems, personal communication, February 5, 2008).

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23 services in contrast with the average Atos Origin consultant who was most of the times detached at a client. Furthermore, the average Atos Origin consultant was ten years older and was not used to have a sales target from the start of his career (Kuitems, personal communication, February 5, 2008). The consultants were seen as “ambitious arrogant cowboys” in contrast to the average Atos Origin consultant who were stereotyped seen as “IT-nerds” and had other priorities in their career (Lubberding, personal communication, January 30, 2008 and van der Zee, personal communication, March 04, 2008). Many KPMG employees found it hard identifying themselves with the ‘nuts and balls’ culture of Atos Origin (Bakker, personal communication, March 17, 2008). Additionally, several competitors, such as accountancy organizations which also sold their consulting unit started just after the separation a new consulting department, were attempting to poach employees (van der Zee, personal communication, March 4, 2008). All these developments resulted in a high turnover at both organizations. Not all turnover can be devoted to the acquisition, because the consulting sector is known as a branch of industry with high turnover percentages (e.g. Heijster, personal communication, February 18, 2008). From another perspective, positive consequence of the turnover was the fact that new personnel were recruited that provided new perspectives and had no history or involvement with the acquisition (Kuitems, personal communication, February 5, 2008).

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5.1.3. Leadership in the post-merger integration

Implications for leadership. Through an unfortunate, coincidence of circumstances,

the KPMG Consulting partners showed in general little leadership (Wildeman, personal communication, March 4, 2008). First of all, after the deal was closed, most KPMG Consulting partners were skeptical whether the deal was the right strategic choice. Many KPMG Consulting partners were reserved about being part of an IT-services provide and had to be convinced of the advantages and benefits of the deal (Krekel, personal communication, February 14, 2008). Furthermore, most partners experienced difficulties in realizing what kind of impact being part of an IT services provider, listed on the stock exchange, would have on their own functioning. The KPMG Consulting partners had to make the switch from being owners to employee (e.g. van der Zee, personal communication, March 04, 2008). Many leaders experienced the post-merger integration as a hectic period in which it was necessary to devote effort and time in order to successfully manage the integration process while also keeping the focus on the daily business (van der Zee, personal communication, March 4, 2008). All these consequences resulted in a high turnover percentage of KPMG Consulting partners.

Vision. For Atos Origin, the acquisition of KPMG Consulting was as an important

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25 autonomously, were located at the same office to ensure that employees were acquainted with each other. And look together for synergies and benefits envisioned with the deal. .

In addition, because of the fact that most KPMG Consulting-partners were negatively disposed, it was very difficult for many leaders to ‘walk their talk’ or practice what they preach. Highly educated professionals immediately noticed that leaders had limited confidence in the acquisition. Besides that, although there were exceptions of leaders who had the exposure and confidence that the deal made sense, when colleague-partners decided to leave and even the CEO went back to the former organization (Wildeman, personal communication, March 4, 2008), the credibility of the partners in general was at stake. Consequence was that employees were questioning themselves whether the new organization had enough career perspective for them and this also led to a high turnover percentage of consultants (Wildeman, personal communication, March 04, 2008). All interviewees agreed that it took too long position to Atos Consulting as an independent consulting firm in the market trading with an own brand name and identity.

Communication. After the acquisition was closed, no one had to be afraid of losing his

or her job, which reduced insecurity at both sides of the acquisition (e.g. Streng, personal communication, February 18, 2008). The managers of Atos Origin COPM made before the technical integration an analysis of every employee to investigate whether their future laid in the new organization or elsewhere in Atos Origin.This communication resulted in clarity and every employee knew what the impact of the acquisition was on their functioning (Kuitems, personal communication, February 5, 2008). In contrast to KPMG Consulting, where all interviewees agreed that it took too long to create clarity about the future of every employee. This group of employees and also the partners had a negative influence on the rest of the group (Lubberding, personal communication, January 30, 2008). For instance, as mentioned above, some partners were not able to communicate a confident picture of the future of the new organization. It was better to take the pain earlier with the risk that many people, who have somehow difficulties with the acquisition process, left the organization instead of letting them slow down the post-merger integration process (e.g. Lubberding, personal communication, January 30, 2008). According to Heijster (personal communication, February 18, 2008) more and intensive partner meetings could have resulted in from the start more clarity about partners who were willing to change and who not.

Empowerment. The consultants of Atos Origin experienced the post-merger

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26 overcome the difficulties both groups faced with identifying themselves with each other. Both groups were involved in order to get acquainted with each other. In these unit meetings, both groups of employees presented how they were used to work, what kind of activities they exploited and how a working day looked like. It was important to minimize the distance between both groups in order to retain professionals, however, as mentioned before, there were large cultural differences between both groups. Kuitems (personal communication, February 5, 2008) mentioned that creating equality on the work floor has been managed insufficiently. Although COPM-colleagues and managers were involved in the post-merger integration process, the involvement led not to the desired results because of the background of the integration process and the unfortunate coincidences of circumstances leaders were involved.

5.2. Acquisition of BM Advies

The second case involves the acquisition of BM Advies by Royal Haskoning at August 1 2005. Royal Haskoning is an independent consultancy firm, with 4300 employees, operating worldwide. Their consulting services focus on the broad field of the interaction between people and their environment as a whole.

According to Van Eijndhoven (personal communication, March 5, 2008) there was not a logical solution, at the moment when the CEO and shareholder of BM Advies announced that he decided to retire. Every option was open, from a new start with BM Advies till even a merger with another organization. During this process, Royal Haskoning made its interest clear to acquire BM Advies. From that moment on, the negotiations between BM Advies and Royal Haskoning were started resulting in a closed deal at August one, 2005 (Reedeker, personal communication, February 26, 2008).

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27 2008). A step-by-step integration process was chosen in order to get employees accustomed to each other and to keep the daily business running. Vink (personal communication, February 20, 2008) mentioned that Royal Haskoning not only acquired the brand name BM Advies but also their professionals. Besides that, it was important to keep the focus on the market and not to waste energy and time on possible integration problems.

During the first years, both organizations exchanged knowledge and people at several projects which ultimately led to the actual integration at January one, 2008. From this date on, all e.g. activities, people and systems were clustered under the new organization Royal Haskoning BM. Up till then, BM Advies and Royal Haskoning were sending each other invoices when people had collaborated at the same project, because both organizations were still independent (Reedeker, personal communication, February 26, 2008 and van Kessel, personal communication, February 20, 2008). In the end of 2007, the conditions of employment have been harmonized. The integration primarily affected former BM Advies employees in the back office and supporting functions (e.g. Vink, personal communication February 20, 2008). According to Van Eijndhoven (personal communication, March 5, 2008) the facilitating backbone of the organization influences the primary process and must function excellently. All systems, procedures and the back-office were organized according to the Royal Haskoning ‘one-company concept’ standards and rules. BM Advies employees were reserved in using the new systems and also resistance occurred, because BM Advies had organized the internal processes and systems perfectly (van Kessel, personal communication, February 20, 2008). Workshops were provided by Royal Haskoning to train the employees in using the new systems. Some employees of BM Advies found it difficult to be part of a large international oriented organization and left the organization in contrast with, for instance, project managers of BM Advies who had the opportunity to work abroad.

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28 that all supporting processes and activities were standardized internally, while Royal Haskoning BM positioned itself with an independent identity externally.

At this moment, the post-merger integration process has just been started and it takes time for an acquired organization to get accustomed with the norms and values of the acquiring organization and for employees to feel truly assimilated in the merged entity. All integrating activities have been completed and some final individual cases, such as in logging from a construction site, have to be solved (Van Eijndhoven, personal communication, March 5, 2008). Most departments are not integrated with each other; however, to ensure that a possible integration will succeed in the future, it should be investigated on individual basis if job rotation is a possibility (Morsink, personal communication, February 27, 2008).

Implications for leadership. In general the department managers found it difficult to

balance between the focus on the day-to-day business on one hand and at the other hand being involved in the post-merger integration process. As van Eijndhoven (personal communication, March 5, 2008) commented “We had to devote a lot of effort and time to manage a post-merger integration process while the results of our time and energy were not always noticeable. In fact, some of the integrating activities had nothing to do with the core business but in the mean time these activities had to be organized efficiently in order to keep the primary process running”.

Vision. Throughout the acquisition of BM Advies, a consultancy organization

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29 20, 2008). Additionally, there was room for speculation and employees had their own interpretations and ideas about the process. This resulted in insecurity and concerns among employees about the future direction of Royal Haskoning BM.

At this moment, the leaders of Royal Haskoning BM are developing a vision of the future direction and in what way every department can contribute towards realizing this vision (e.g. Morsink, personal communication, February 26, 2008). This will result in a better understanding of employees their own role in the overall picture and what the future state of Royal Haskoning BM will be.

Communication. Potential overlap at the back offices created insecurity of people who

were afraid that they might lose their job. All interviewees agreed that there was communicated clearly that no one had to be afraid losing their job which reduced insecurity. Furthermore, the leaders recognized many of the issues where the employees dealt with, while at the same time it was crucial to make clear that there was no way back (van Kessel, personal communication, February 20, 2008; Reedeker, personal communication, February 26, 2008). The leaders showed empathy for the fears and concerns of the employees. Employees had the feeling that they were taken seriously, but it remained unclear whether something was done with this information (Zwinkels, personal communication, March 7, 2008).

All leaders involved in this research pointed out that there was much time spent on communication in terms of sessions with the own advisory group or with the division as a whole. All steps and activities in the integration process were communicated clearly for the coming months; however it was not sure if this was intended beforehand. Because the new organization Royal Haskoning BM consisted of several offices, visibility and approachability of the leader played a crucial role. The division director was present at several advisory group meetings with the employees to discuss not only their fears and concerns open and free, but also the kind of impact derived from the acquisition. As Vink (personal communication, February 20, 2008) mentioned: “I felt that these initiatives were appreciated and tried as much as possible to appear at such activities. Otherwise, employees could get the feeling that I lost sight of them”. In addition, during the post-merger integration the division director wrote periodical newsletters about the status of the post-merger integration process Vink (personal communication, February 20, 2008). Employees appreciated that they were kept informed about the integration process while at the same time they always wanted to have more information than actually could provided.

Empowerment. According to all interviewees, employees of both organizations were

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30 etc. The connection in the division and with other divisions of Royal Haskoning was managed perfectly. Employees had the opportunity to look together for the expected synergies and where they could strengthen their services, because it was not clear whether there was an integration plan. Employees were involved in group meetings e.g. to discuss about the post-merger integration process, but were not actively involved in teams for instance. To enhance the integration process, teams have to be formed consisting of employees with the same expertise that can investigate where they can find the expected synergies envisioned with the deal.

5.3. Acquisition of Noordelijke Accountantsunie

The third case will describe the acquisition of Noordelijke Accountantsunie (NAU) by Accon avm in 2007. Accon avm is one of the largest accountancy and advisory organizations with approximately 1400 employees in the Netherlands

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31 2008). The deal was closed in March 2007 and during May 2007 the integration process started between the two organizations.

According to Marissen (personal communication, March 10, 2008) the situation of NAU could be compared with a war: “In a war you cannot deliberate about when you have to shoot, but instead you shoot”. One of the first activities that needed to be done was to dismantle the head office of NAU. There was overlap at mainly administrative and other supporting functions. Furthermore, the thirteen offices were reorganized into seven locations. Every employee could stay within the Accon avm organization and for some subordinates this meant that they were located elsewhere or that they were given a new position (Hondeveld, personal communication, March 11, 2008).

Because of the urgency and necessity to integrate and transform the NAU, there was hardly any time left for discussions. The performance had to be improved on the short term and the region director had to discuss with the directors of each office about the bad financial performance and took unpopular but necessary decisions. Because of the crisis situation at the NAU there was no time to wait for employees who experienced difficulties with the acquisition. The individual was inferior to the group and the leaders could not allow that individuals slowed down the process (Marissen, personal communication, March 10, 2008). This direct criticism on their functioning resulted that many directors and employees left the organization. According to Marissen (personal communication, March 10, 2008) their leave was not really a disaster, because they were actually responsible for the disappointing results. Positive consequence of the turnover was that new employees were attracted that had no affinity with the acquisition and this contributed towards a positive shared feeling in the organization (Janssen, personal communication, March 11, 2008).

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32 communication, March 11, 2008). In addition, the no-nonsense mentality and ‘down to earth’ culture of Accon avm also contributed that the employees of NAU were positive oriented towards the acquisition. There were no “we-they thoughts” or that Accon avm was seen as the arrogant dominate acquirer (Hondeveld, personal communication, March 11, 2008). Workshops were provided by Accon avm to train the employees in the new ways of working and the new systems dealt with.

After two months of euphoria, the employees realized that the new organization demanded a better financial performance on the short term. It was a sort of shock reaction that the new organization still demanded that the business had to keep running. The biggest challenge was to change the mindsets of the employees to have responsibilities about the results and to work in a result driven organization (e.g. Marissen, personal communication, March 10, 2008 and Janssen, personal communication, March 11, 2008). This is a process that is still going on.

At this moment, the financial performance has improved and most integration issues have been taken care of. From now on Accon avm has to position itself as an attractive employer and as a reliable accountancy- and advisory organization in the provinces Groningen and Drenthe. Marissen (personal communication, March 10, 2008) mentioned that if this will succeed, you could speak of a successful post-merger integration process.

Implications for leadership. In a turbulent process with many successive decisions

and activities in a short period of time, much was asked from the leaders (Marissen, personal communication, March 10, 2008). An integration team helped leaders that they could always fall back on them and their plan. A thoroughly grounded preparation and an integration team resulted in clarity about the post-merger integration process and reduced insecurity among employees (Hondeveld, personal communication, March 11, 2008). The leaders therefore kept the overview and focused on improvement of the performance of the new organization. According to Hondeveld (personal communication, March 11, 2008) this resulted in a good starting point and well prepared post-merger integration process.

Vision. The acquisition of NAU fitted in the overall strategy to become one the largest

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33 At day one of the post-merger integration process the vision, mission and the corporate values of Accon avm were presented. Just as any other important issues, such as what will change for the employees, were handled. From the beginning short term objectives had been formulated and every step was clearly communicated to the employees. There were no options left open for speculation or interpretation (Hondeveld, personal communication, March 11, 2008).

Furthermore the vision was translated into short term objectives in the integration process in order to realize quick wins. In addition, according to Hondeveld (personal communication, March 11, 2008) and Marissen (personal communication, March 10, 2008) it helped a lot that professional football clubs as SC Heerenveen en FC Groningen were attracted as clients. Attention was paid to these short term successes in the personnel magazine of Accon avm. Interviewees agreed that this gave the employees a real energy boost. It also gave them the feeling that this acquisition was really the right choice. Furthermore it made the employees aware of the position of their former organization in the new organization, which cannot be underestimated (Hondeveld, personal communication, March 11, 2008 and Prud’homme van Reine, personal communication, March 12, 2008). This created a positive attitude towards the organization and their role in the overall picture. Moreover, these successes helped leaders that they were able to communicate a confident story and that they had the exposure that the acquisition was the right decision (Marissen, personal communication, March 10, 2008). These activities contributed towards a successful post-merger integration process.

Communication. Another positive element was that Accon avm worked with a detailed

communication plan. Every employee received important messages on the same way at the same time. Consistent and clear communication of the leaders gave no room for speculation nor did they give answers on questions which they did not know the answer (Hondeveld, personal communication, March 11, 2008). It has been communicated clearly what kind of impact the acquisition had for every individual employee. Right from the start employees knew whether they were kept on board and if so what their new function was (Marissen, personal communication, March 10, 2008). Employees who left the organization were assisted in finding new employment.

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key-34 professionals who actually wanted to retain also left Accon avm, because of a lack of received attention (Janssen, March 11, 2008). These people had the feeling that they received minimal attention and were not appreciated (Marissen, personal communication, March 10, 2008). Hondeveld (personal communication, March 11, 2008) argued that people wanted to have attention but due to the fact that it was a crisis situation, the leaders obviously did not succeed in this.

Empowerment. The post-merger integration process was led by an external process

consultant and also key-employees of both organizations were involved in the integration team. All team members were responsible for certain integration areas such as cultural integration and could be approached by e-mail and telephone. This team was well prepared and made an integration plan of ‘how’, ‘what’ and ‘when’ everything should run. Furthermore there were so many things going on, that leaders could get distracted from their primary process (Marissen, personal communication, March 10, 2008). By using an integration plan, leaders could always fall back on the integration team. Through a solid and careful preparation many issues that could occur during the post-merger integration process were already tackled (Hondeveld, personal communication, March 11, 2008).

Every two weeks the integration team organized a team meeting at a different office of the acquired organization. After the meeting, the integration team lunched together with the employees of the particular office. Employees were invited and had the opportunity to talk and discuss about the post-merger integration process. It was helpful for the employees to get to know the integration team and that they saw that the integration team had the best intentions (Hondeveld, personal communication, March 11, 2008). Furthermore through involving employees every individual was able to see their role in the overall vision and felt that the acquisition was a logical strategic choice. Visibility and approachability of the integration team played a crucial role that employees were appreciated and resulted in the conviction of employees that the deal made sense. In addition, every month of the post-merger integration process, one of the ten corporate values of Accon avm stood central to get employees acquainted with the new culture, norms and values. The integration team presented the corporate value and gave the employees the opportunity to discuss about this topic.