When Structured Meets Informal: How Semco Approached Mergers And Acquisitions

Mergers, acquisitions and joint ventures are great indicators of a company’s performance: The better performing company obviously takes over one that’s been underperforming; or, two equally-footed companies might join forces to take on bigger business. Either way, whenever there’s a merger, acquisition or a joint venture on the horizon, it spells a period of intense activity and dramatic change in the existing landscape.

And, like any kind of change, it doesn’t sit well with the people in both the organizations. In fact, for many employees and managers, a merger could signal a time when their personal goals and ambitions are disrupted. Or, more traumatically, they could lose their jobs in the “integration” process that follows a merger. In fact, about 30 percent of employees risk losing their jobs when their company enters into a merger or acquisition within the same industry.

Joining Hands Is Never Easy

The first few months after a merger are the both crucial and painful because that’s when people from both sides learn to work alongside each other. Very often, there are clashes of perspectives or confusion in the way things are done.

There might be other cultural and language-based barriers that make working together much more difficult. Finally, there may be new policies and politics to keep in mind; vast differences in culture to bridge; and new clueless managers to report to.

In short, people need to overcome their existing biases and learn to work with each other even though they don’t really want to. While it’s not exactly a walk in the park, the tough times ushered in by a merger can be converted into both teaching and learning moments.

Mergers At Semco Were Different

During the 90s, there was a long period of intense expansion, with Semco entering into multiple mergers, acquisitions and joint ventures (mostly with companies in the U.S.) in a variety of fields and industries. The HR department, which was responsible for not just welcoming the new employees, but for also facilitating the transitions and for taking care of the operational side of things.

The integrations were done with two main points of focus in mind: First, to adapt the international employees arriving in Brazil to the local culture as well as the unique work culture at Semco. And second, to help existing Semco employees embrace the external culture in order to create a new culture that would represent and respect the values they’ve imbibed until now.

The mergers, acquisitions and joint ventures opened up a real dialogue between Semco and the other companies. There was no top-down imposition of the Semco culture on newcomers. Instead, it was a real exchange of ideas and opinions between both parties involved.

Helping Night Shift Workers Integrate

It was quite challenging because these new ventures were often done with very big international companies that already had a strong corporate culture and lots of processes in place. So, joining forces with Semco and its culture was a challenge for both sides. For instance, the American companies were usually quite rigid about their control systems and procedures and were very structured and process-oriented. Semco, on the other hand, was much more organic and informal in the way it went about doing things.

In 1998, the SEMCO RGIS was created and it specialized in inventory services with people working round the clock on different shifts. One of the main challenges brought in by the new venture was integrating the large number of employees who worked the late night shifts. Semco solved the problem by working very closely with the team leaders, who were representative of the voice of these employees.

It was crucial that these team leaders understood the key elements of the Semco culture so that they could replicate it for the employees who worked the late night shift. Since it wasn’t possible for these employees to attend the trainings and discussions conducted during regular office hours, extra attention was paid to the training of the team leaders.

Bringing More Into The Semco Style Framework

To ensure that the late night shift employees aligned themselves with the culture and values at Semco, the team leaders and the Semco management co-created a very intense program of training, onboarding, conversations, meetings and alignments.

Once they were adequately trained, the leaders passed on their training to the 10 people in their teams. Overtime, all employees were onboarded with the Semco style of working and even clients were able to notice the alignment.

In each of these integrations, Semco had to repeat what it did with its own employees at the beginning of its transformation into a democratic company. But, now they had the support of the current employees who had imbibed the strong culture and were open to embracing new companies and helping them move in their direction.

A Perspective Change Is All You Need

When companies merge with each other; acquire another entity; or, enter into a joint venture, it’s not restricted to the financial dimension alone. Instead, it’s a coming together of people, processes, cultures and aspirations.

When done right, people can be shown how to view their differences as being complementary; when leaders walk the talk, it’s easier for new employees to assimilate into an alien culture; and finally, it can provide multiple opportunities for people to exhibit collaboration, innovation and empathy.

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