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Interview with Gary Grates

Interview with Gary Grates

link to Forum 2011 interview with Gary Grates

In any merger acquisition basically the formula is one plus one equals three. Youíre trying to become better and stronger and oftentimes in these kinds of scenarios organizations lose sight of the fact that reputation is built inside and that you have to pay particular attention to your employees on both sides Ė the acquirer and the acquire and make sure that throughout the process they understand exactly what the value proposition is. So weíre going to talk a little bit about that and about some of the missteps organizations tend to take.

When organizations come together, or at least try to, and they donít take particular attention around what their reputation is, and again, the reputation is how theyíre basically projecting themselves to the outside world and that has everything to do with how the internal world feels about the organization. Then what they do is they lose the whole value proposition for coming together in the first place. And so their earnings can be affected, certainly revenue and sales, profit margins, but more importantly customer service, brand id, things of that nature, so going into it they may be strong, but not paying attention to it, they may come out of all of that in a weakened state.

Look, reputation is a multidimensional thing. The thing that you have to pay attention to, quite frankly, is do your own employees and the employees that youíre going to be bringing on board understand exactly what the future looks like, or can look like, by merging or having these two organizations come together in some way, shape or form and if you can focus on that and allow people to basically create the future, then youíre not only protecting your reputation, youíre protecting the ability growth. I think thatís really the key aspect that you have to pay attention to.

If you look at over the last ten or twenty years, I think youíll see the Time Ė AOL merger did not work out. AOL has subsequently been on and off. Similarly with Daimler- Chrysler. Both went into it feeling that it was a merger of equals, when in fact it wasnít, they were actually acquisitions and the value of both of those transactions dissipated over time.

If you look at what Pfizer and Wyeth have done in the States, I think it has been certainly a successful merger and I think the difference is they went into it at the outside realizing what it in fact was and in the Daimler- Chrysler case and Time Ė AOL case I think that they tried to position as a merger and in both cases as I said it was an acquisition, so the rhetoric didnít really match the reality. So people were left, particularly employees were left with Ďwell I thought I was going to be a part of this and in fact what youíre doing is just putting your culture on mine.í Or in the fact of Daimler, having the Daimler culture trying to dominate the Chrysler culture and it didnít work and we saw what happened. I think if you look at the successful mergers and acquisitions youíll find that the first question they ask themselves is Ďis it a merger or an acquisition?í It may seem to be a very easy question, but itís a very profound question, because once you identify that it is a merger, then you can basically identify what the rationale was for it and then people have an expectation for what the merger is. If you say itís an acquisition, people have an expectation of what an acquisition is and the former is more of maybe I have a chance to help create the culture and the latter, you probably donít. Itís probably: weíre going to put our policies, our practices onto your business. Thereíre maybe some isolated areas where we might look at what youíre doing and say Ďhey, maybe thatís something we should adapt,í but for the most part itís going to be our situation.

Look, communication, first of all, as you well know, is holistic. I will say that in different points in time, particularly in an M&A situation, you have to start with externally, because youíre trying to convince Wall Street that this, in fact, is a legitimate reason, there is a real business rationale for these two organization to somehow come together, either through a merger or an acquisition. Once that happens youíll have to think very specifically about internal communication. Youíve got to think about culture, youíve got to think about brand, youíve got to think about reputation, youíve got to think about image, youíve got to think about productivity, youíve got to think about talent retention. You donít want to have people leaving, because in an M&A youíre buying the people. Yes, you may be buying a brand or a product or a set of customers or a market, but in the end youíre buying people. So internal communications become critical as you work from the transactions to integration. Then communications, internally, externally, have to work in synch, so that the reputation is projected accordingly.Ē

You know, I think the biggest personal achievement for me over the past year probably has been in the area of recognizing the value of communications in new and different areas, particularly around risk management and things of that nature. You get into this profession and you look at it in many ways in a very myopic fashion and then as you experience different things you begin to open up and see that communications can really touch and impact so many different parts of the business, it can impact so many different parts of society. I think over the past year Iíve been getting more comfortable with how deep strategic communications can be and also organizational behavior, how deep it can be in terms of societal understanding. I think over the past year I really tried to become more open to those areas.Ē

Today, you canít walk anywhere in our profession not hearing about social media. But I do think there is a danger insofar as, we have to understand that social media is an important new opportunity for us, but itís not the answer in my opinion. Social media is part of the solution, but itís not the total answer. We always have to be asking ourselves as communicators, Ďwhy are we doing this?í Are we doing it so that more people go on Twitter? Are we doing it so that more people are on Facebook? Are we doing it to help the business or the organization grow? Are we doing it to help define what our brand id is? Are we doing it so that people understand what the value of our products are? We always have to keep coming back and kind of stepping back - Ďwhat is the actual reason for this?í and then I think you can put things like social media in the context. I think sometimes we jump to the newest thing and we get caught up in that and we lose sight of what the real goal is.

To me communications is relationships. You know, at the end of the day, the more solid a relationship is, whether itís in business or in your personal life or your marriage or whatever, the better it is for you to get things done, because once that happens there is a level of trust thatís formed.

Do you use Twitter, Facebook?
I do, I have to do it more. I donít use it as much.

If you could tweet right now, what would you tweet?
I would tweet that Iím in a beautiful location with a group of people that Iíve known, some of them, and have a high deal of respect for and Iím kind of excited about what Iím going to learn.

I think itís just new knowledge. Every time you come to events like this and sessions like this, youíre looking to get new knowledge. A part of this is that nobody has the answer. None of us has the answer. What we have are our perspectives and points of view, so the more you can associate yourself with different perspectives and points of view, the smarter you are. So thatís what Iím looking for.

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