- Executive with 20-plus years of top-tier management consulting experience, specializing in mergers and acquisitions (M&A) and supply chain management (SCM).
- Most recently, led quality and customer experience to the highest levels in Hewlett-Packard history, increasing Net Promoter Score by 10 percent.
- Former partner at Booz & Co., where he grew high tech industry revenues by 100 percent, and at Accenture, where he led the largest M&A deals in the high tech sector.
- Led and executed the carve-out of Linksys from Cisco, the post-merger integration of HP and Compaq, and more than a dozen successful acquisitions in the technology sector.
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Managing Successful Post-Merger Integrations and Carve-Outs
- Renewed focus on the core business while spinning off adjacencies.
Companies are reversing a trend they went through a decade ago where they were acquiring a lot of companies. Now, they're carving out or spinning off some of the companies they acquired. The reason is twofold:
- Companies have realized that there is a limit to "economies of scale." Essentially, in today's global high tech supply chain network, everyone is using the same logistics providers and contract manufacturers (CMs). Companies are finding that after they reach a certain size (roughly $20 billion in revenues), the cost complexity begins to cancel out the economies of scale.
- Enterprise customers are moving back to seeking the best-of-breed providers, which cancels out the need to be a full-suite product and service provider.
Cisco, which only 10 years ago began acquiring consumer businesses like Linksys and Pure Digital Technologies (maker of the Flip video camera), has now sold off or closed those businesses. JDS Uniphase and SDL merged 15 years ago and now they are splitting up again. HP is splitting into two companies, one for consumers and one for enterprise. GE has gotten rid of its financing business and is focusing on a couple of core segments.
- Trying to understand how the cloud will impact their businesses.
Companies are realizing they can no longer ignore the cloud. Everyone is moving towards cloud based applications which is creating major disruptions throughout the value chain. However, companies are finding it extremely difficult to move from a traditional product or software business models to a cloud based business models. It's easier to startup a cloud based business than to switch from a traditional business to a cloud based business, which is bad news for the incumbent players.
- Companies are putting a increased focus on improving customer experience.
- Here we are seeing the effects of the "consumerization of enterprise" and its impact on the expectations of users in the enterprise. Consumers have become accustomed to receiving an excellent customer experience. Examples include the excellent customer experience that users enjoy at an Apple Store or the ease of shopping associated with buying from Amazon, including the one-click buying feature. These experiences are raising the bar in terms of the expectations of users in an enterprise.
In addition, the high tech industry is maturing. The first successfully mass-marketed personal computer was the Commodore introduced in 1977. This makes the high tech industry nearly 40 years old. It is no longer a kid. It is reaching a stage of maturity, and as industries mature they become more and more commoditized – and one of the biggest differentiators becomes customer experience.
- Companies are continuing to try to move from selling products to solutions – usually without success.
- This is not a new trend. Companies have been trying to move from selling products to solutions for at least the last 20 years – and most have not been successful. We went through an era during which nearly all of the product-based companies either built or acquired a services capability.
However, what these companies discovered is that it is extremely difficult to successfully merge a product-based company with a services-based company. The basic DNA of these two types of businesses are very different and as such, a person who grew up on the product side of the business does not understand the services side of the business, and vice versa. Typically, this results in the services arm becoming the de facto customer support group for the product business, and eventually the solutions business never fully comes to fruition.
- Increasingly, companies are establishing a new role with the title of "VP of Transformation."
- This is an executive level role with the responsibility of driving company-wide business transformation. Companies have discovered that without an executive with full-time responsibility for business transformation, that responsibility is given to external consultants.The consultants then try to engage a group of executives who already have full-time day jobs running the business and, as such, can never fully engage. This new in-house role will increasingly become more involved in post-merger integrations and in some cases will drive the PMI efforts.