Jeff Rodman felt a twinge of sadness when he learned that Polycom Inc., the company he and Brian Hinman co-founded in a San Francisco basement back in 1990, was going to be acquired later this year by Ottawa, Canada-based Mitel.
“People would stop just short of putting their arm around my shoulder and saying, ‘Jeff, here, you can cry on me,’” Rodman says with a chuckle. “I will admit when I first heard of this, I didn’t know that much about Mitel. I thought, ‘Great, we’re being sold to a telephone company.’”
The deal to join Polycom and Mitel is expected to close in the third quarter of 2016. Rodman recalled being on the other side of the table when his company acquired Austin, Texas-based ViaVideo.
It was a key acquisition that would help Polycom build videoconferencing into its product and service offerings and ultimately become the global leader in HD videoconferencing, voice conferencing and telepresence. But there was some unease when the deal was first announced.
“ViaVideo was a company that had some real top-notch management and workers,” Rodman says. “They were somewhat apprehensive about being acquired. They thought, ‘Oh great, we’re getting bought by a speakerphone company.’ The way we worked through that was we spent a lot of time there, Brian and I and some of our other team. We were able to prove to them that we really understood what they were doing. We understood the importance of what’s different about a videoconferencing lens vs. a camera lens.”
Flash forward to 2016 and Rodman is co-founder, fellow and chief evangelist at Polycom, as well as staff piano player.
“I’ve had probably eight or 10 roles since we started the company,” Rodman says. “I’ve also been chief technical officer probably three times.”
Rodman is proud of what Polycom has become with more than 3,400 employees and $1.3 billion in annual revenue. But he’s also very excited about the new opportunities that will now be possible as his company becomes part of Mitel.
“As I looked into it more, I realized how deep Mitel really is and what strengths they have that we are not in, but want to be in that are strategically vital for us to be in,” Rodman says. “I realized this can be a powerful win-win for both sides. I expect that as the two companies learn each other, my personal opportunity is still going to be there and will grow. I’m really looking forward to it.”
Here’s a look at how Rodman built Polycom into a billion-dollar business that revolutionized the way business is done around the world.
Understand your plan
Before Polycom, Rodman and Hinman worked together at PictureTel Corp., a company launched in 1984 that had done some very innovative work in video communications.
“The algorithms and techniques they developed are still basic parts of MP3 and H.263,” Rodman says. “What we wanted to do with Polycom was to extend that into not just video, but all the ways that people communicate. That was the initial vision. The next step was to understand how people want to communicate. What carries the highest value?”
Years of experience in the industry had taught them that sound was the most important means of communication for potential customers.
“It’s just talking to each other,” Rodman says. “It’s a real-time medium, it’s highly interactive and you can get a lot of information exchanged and a lot of negotiation done in a relatively short amount of time. We thought what we’ll do is take the three major elements of collaboration. Audio was No. 1. No. 2 was not video, which was the standard thing to do. But it was graphics, or what they now call content.
“The next thing you want to do when you’re talking to someone is say, ‘Hey, look at this picture. This is next year’s automobile.’ It’s not that important to say, ‘Hey, this is my face. Aren’t I pretty?’ So our sequence was audio, then content and then we intended to get to video.”
The next step was to develop “bulletproof networking tools for multi-point videoconferences in which everybody may have a different kind of end point.”
“One thing we were always very focused on was interoperability,” Rodman says. “It was important that whatever we did was able to work with different versions of our stuff, or whatever brand X might be putting in the field that had a similar function. It may not work quite as well, but we needed enterprise-quality solutions that would keep working and that could be counted on for a meeting. We needed a multi-point bridge and then we needed to be able to expand that into hundreds of end points.”
In other words, Rodman wanted to ensure that companies wouldn’t be left in the dark because another company didn’t have the right equipment or wiring to conduct a meeting. Polycom developed a graphics conferencing device and then acquired PictureTel and ViaVideo to support its videoconferencing offerings.
“This was the first time Polycom had done any serious M&A activity,” Rodman says. “As you would expect, there were a number of lessons in how to merge cultures. How do you leverage the abilities that company has? Our intention wasn’t to purchase a competitor and shut it down. It was to purchase a company in an interrelated field that didn’t directly overlap and try to get three times the benefit for two times the people.”
Focus on integration
When an acquisition takes place, there are typically three steps, Rodman says.
“One is happening in the deep dark where nobody knows about it except those directly involved in the deal because you don’t want the information to leak into the marketplace,” Rodman says. “The second phase is when you are making the announcement. It’s a planning phase where you’re pulling more people in and saying, ‘Let’s look at the details and see how this is actually going to happen.’ The third phase is once the deal is actually done, you take what you have developed as a plan and turn it into real action.”
The key to success, Rodman says, is the middle phase when the planning is done.
“But not so much in the way you might think,” he says. “It’s important that you have a spreadsheet and fill in every square. But that’s a time when the groups from both companies get to know each other and no matter what your CEO has been quoted as saying about how wonderful things are going to be, both companies are going to take their guidance from who they have encountered on the other side. What kinds of attitudes are they sensing? Are their hearts really in this? Can we work together?”
It’s always a shock when you go from learning of an acquisition to, “I want you on an airplane tomorrow morning because you’re going to meet your new cohorts,” Rodman says.
You need to make sure you have a clear plan that everyone understands and can believe in if you expect the cultures to begin coming together.
“If you have any specific plans that you intend to do in the longer term, you’re better off being straight about that,” he says. “If you told them one thing in the planning phase and then you execute something entirely different, they’re not going to trust you again for years.”