Reconcilable Differences
To Camden Property Trust’s Richard J. Campo, integrating a merger or acquisition hinges on finding acceptable solutions to the conflicts that arise. “You have to reconcile the differences, from nomenclature and what people are called, to compensation programs and operating procedures,” says Campo, who says the process benefits the dominant company just as much as the firm that is being acquired. “It gives you an opportunity to review your own operational procedures,” he says. Here are a few of his thoughts on the challenges and benefits of post-merger integration efforts.
ON TECHNOLOGY: “We discovered our approach to technology and cable was off [after Camden began integrating Summit?s properties and practices into the Houston-based company]. We’d made a deal with a provider for a small revenue share. Summit had a high-quality satellite program and a high profit margin we couldn’t believe.”
ON EMPLOYEE ISSUES: “The biggest risk in a merger is that operations go sideways. You have to reassure employees and communicate immediately and effectively with them. They want to know, ‘Do I have a job?’ and ‘What’s in [this change] for me?’ in terms of salary, benefits, and how they view their day-to-day jobs. Longer term, they want to know about the corporate culture. … In a merger like this, there are going to be job losses at certain levels, because that’s what creates efficiencies. You don’t need two CEOs, two CFOs, two accounting managers. So you tell people as soon as possible, and you give them fair severance pay and fair job placement. Forty employees lost their jobs in the Camden/Summit merger, and some of them were offered jobs in Houston. Our expectation for turnover was exactly what happened. We lost very few on-site people.”
On HAPPY surprises: “I learned that our ability to raise capital [after the Summit deal] was even greater than I thought.”