How Kieth Cockrell and Brett Bernard turned Bank of America’s acquisition of Merrill Lynch into a local success story Featured

7:01pm EDT November 30, 2011
Kieth Cockrell Kieth Cockrell

Things were already complicated enough for Kieth Cockrell by the later months of 2008.

Bank of America had entered the Michigan market less than two years before, on the heels of the company’s acquisition of LaSalle Bank in 2007. Just as Bank of America started to put down roots in the region, the recession hit, plunging the state — and, in particular, the economically-fragile Detroit market – into its worst backslide since the 1930s.

It was a double dose of quicksand for Bank of America’s Michigan market president. And the footing wasn’t about to get any better.

That fall, Bank of America Corp. announced its intention to acquire Merrill Lynch & Co. The acquisition would bring together two titans of the financial services industry, adding Merrill Lynch’s wealth management expertise to Bank of America’s array of client and customer services. But it would also mean another level of complexity for Cockrell and his management staff, which oversees a work force of 3,500 in the Detroit area. Cockrell had to take a massive, national acquisition and make it work for his employees and clients on a regional and local level.

“There were some dark days there, as we were constantly in the media, hearing about the firm, and it’s not the firm you grew up in,” Cockrell says. “It was especially challenging for me because Bank of America here in Michigan was still so young. We had just completed our systems conversion (from the LaSalle acquisition) at that time, and that year of actual conversion is tough sledding in general. People have new leaders, there are new systems, new products, new staffing models, customers are trying to understand the new products, and we had just gotten through all of that.

“The systems conversion was complete in the October-November time frame in 2008, and Merrill Lynch became official in January 2009. That should have been our honeymoon period in the Michigan market, but needless to say, we had a very short honeymoon.”

But Cockrell soon realized he wasn’t alone in the effort to make the acquisition work for the Michigan market. The purchase brought Brett Bernard under the Bank of America umbrella. Bernard, the Mid-East regional managing director for Merrill Lynch, oversees 1,500 employees in a three-state region, including 800 financial advisers in the Detroit area.

Bernard and Cockrell formed a working relationship that proved to be crucial, not just in helping their region of the newly combined company over the initial hurdles of the acquisition process, but in helping it achieve its full potential as a financial services firm.

Get it all together

When you think about a merger or an acquisition, your mind might first gravitate to the logistical aspects — how to combine systems, define responsibilities and integrate technology. That is all important, but Cockrell and Bernard say you should think of the people involved first.

People on both sides of the merger need to be educated about the decisions that management is making and how it will affect them and their jobs. They need management to paint a picture of how the new company will look. Even if all you can provide initially is a rough sketch, it’s still valuable information to those who are concerned about the future of the organization.

For Cockrell and Bernard, the first step was to understand each other’s companies.

“It was as simple at the beginning as Kieth and I coming together,” Bernard says. “It was me spending time at the branches of consumer banks, meeting commercial executives and other banking executives, and vice versa — Kieth meeting the Merrill Lynch leadership and better understanding the people equation, bringing the broad organization of people together so that we could understand how common our goals and backgrounds actually were.”

By connecting with team members from each other’s organization, Bernard and Cockrell were able to start bridging communication and cultural gaps, and began to paint the picture of how a combined Bank of America-Merrill Lynch company would look in Michigan.

“First, our responsibility was to ensure that we had strong communication, so that associates knew what was going on,” Cockrell says. “At that time, there was a lot of news out there with Bank of America, so our approach was that we wanted our teammates to hear from their firm what was going on and what we were trying to do. Secondly, we needed to remain visible. As you’re leading people through a transition of this magnitude, it is very important that you are visible, walking with your people and helping them understand the capabilities that we have.

“Thirdly, you need to make sure that you are creating listening opportunities so that folks can ask questions and check the temperature on how things are really going. Any time you have this kind of integration, that kind of interaction becomes one of those core, critical elements of success.”

But as with any large-scale change, there will be skeptics. Rather than try to initiate a faceoff with skeptics and critics, Cockrell and Bernard made the decision to go with the flow, accepting that skepticism is a natural part of dealing with change. Both felt that if people on both sides got to know each other well enough and became familiar with the future director of the combined company, they would be able to win over the vast majority of skeptics.

“Skepticism is natural,” Bernard says. “I’ve been with Merrill Lynch for 26 years, I had never been through a merger, and I realized that skepticism is natural on both sides. Meeting and defeating the skepticism is a process of evolution, it takes time, because it’s a matter of constantly evolving a living and breathing organization. What I’m proud of is the fact that we’re moving in a direction where we’re constantly trying to improve our capabilities around clients. As you do that, the cynicism starts to pass, and more and more people begin to realize the potential of the organization.”

Bank of America and Merrill Lynch also initiated some formalized processes to help bridge the gap between the two sides. Even several years after the merger, some of Bernard’s wealth management advisers still attend training sessions held by commercial banking executives, aimed at helping the advisers better understand the new organization’s capabilities for serving small and large business clients.

“We had one recently, and this wasn’t an introductory training session,” Bernard says. “We’ve been together for two years, but there are more advanced solutions and platforms that we might not all be aware of. What’s more, directly next door to that session was a session in which wealth management advisers were exposing and educating our commercial client managers on the capabilities in the wealth management franchise. So it’s a constantly evolving educational process.”

Combine the cultures

Bringing the regional operations for two well-established companies — each with histories that date to early last century — required Cockrell and Bernard to walk a fine line between honoring two cultures that have worked for generations, while still acknowledging that the cultures would need to be combined into one set of core values. The values of Merrill Lynch and Bank of America were similar, but slight differences meant terminology would change, and the combined company would have to identify and embrace best practices.

The process of forming a new culture started at the top of the Bank of America hierarchy, with president and CEO Brian Moynihan, who established the vision for the combined company shortly after the acquisition: become the best financial services company in the industry.

“That was really the rallying cry, what we aspire to be,” Cockrell says. “It was very clear and very easy to understand.”

With the boundaries of the playing field set, Cockrell and Bernard had to take the mission and interpret it for their employees and clients, using elements of the cultures of both companies to come up with something new and comprehensive that would be relevant to the Michigan market.

“It starts at the top of the house with the core leadership team of the integrated company,” Cockrell says. “You have to have an appreciation for the heritage of both companies. Through dialogue, you have to be willing to demonstrate and telegraph to your entire worldwide employee base that the core values of both sides have changed.”

“I don’t want to frame this as a brand-new set of values or culture,” Bernard says. “What we want to point out is that we had two great companies. The art, to me, is not to change the culture but to honor the culture, respect it and build upon it. You bring together the best of both, to make an even better culture melded together.”

In some cases, altering the core values came down to new phrasing. The essence of the principle didn’t change, but how it was worded, and how it was to be implemented on a daily basis, was changed.

“For instance, Merrill Lynch had a longstanding principle of teamwork,” Bernard says. “Our culture now has a principle of ‘trust in your team.’ Merrill Lynch also had a longstanding principle of respecting the individual. The core value here now is to embrace the power of the people.”

“Within the company, all the senior leaders had the opportunity to personalize, in their words, the core values,” Cockrell says. “They saw executives that were formerly from the Merrill Lynch side talk about our values, as well as former Bank of America associates. So you start with strong communication, and then you can go into virtually any conference room, any cafeteria, any main corridor, and see the core values at work.”

To successfully mesh two cultures, Cockrell says you have to keep three things in mind: Communication is key, visible leadership is required and you must keep listening even after the rollout of the initial integration plan.

You also need to recognize that different people will respond to a changing environment in different ways.

“Despite all of you best efforts, each individual responds to change differently,” Cockrell says. “Some are going to be slower at adopting the change and really requires you as a leader to understand why. Because if they’ve been successful in the old environment, you have to help them cross the bridge and understand how they can be successful in the new environment. You have to connect the dots for them to show how you can honor the past success you’ve had, but at the same time recognize what the future can really hold. You try to stay focused, recognize that you might have some casualties along the way, but the effort is always focused on getting 100 percent of your folks to the other side.”

Despite the rocky rebound for the economy, and all of the upheaval of a major acquisition, Cockrell and Bernard are satisfied with the progress that has been made by both sides as the new, unified Bank of America gets set to enter its fourth year in the Michigan market.

“As a leader, your job is to provide facts in the midst of flying rumors, and help people look beyond the valley of where you are, to the vision of what can be,” Bernard says. “It’s the leader’s job to point toward the future and anchor people in something greater than themselves. To the best of our ability, Kieth and I have both worked toward that end across multiple lines of business.”

How to reach: Bank of America Corp., (313) 446-1111 or www.bankofamerica.com

Three questions

Kieth Cockrell, the Michigan market president for Bank of America, and Brett Bernard, the Mid-East regional managing director for Merrill Lynch, helped engineer a successful transition following the merger of their two companies in 2009. Below are some additional thoughts from them on managing a business through a time of change.

What skills does a leader need to pilot a business through a time of change?

Kieth Cockrell: There is, for me, a willingness to learn, and to recognize that despite all the hard work, you can’t do it alone. There is an old adage that you need to develop friends before you really need them, and that’s especially true if you’re running a big, complex organization. We’re living through a very difficult business climate right now, and I’ve been through this type of transition before, and I realize that I must gain a broader perspective.

Brett Bernard: Kieth mentioned complexity, and every business is going to have its own degree of complexity. That is why we need to be able to empower the people around us to lead as well. You have to engage everyone in the client-first mindset and allow them to lead.

What is the best lesson you’ve learned over the past several years?

Cockrell: Never underestimate the power of teamwork. In a very difficult time, focus on what you know and try to work through it. Also, Brett and I both became better leaders because we defined our partnership. I was thrilled to find a teammate in Brett who was willing to create that foundational relationship moving forward.

Bernard: The greatest leadership lesson to me is wrapped around two things. First, being open to the possibilities of what the organization can become. Your greatness as an organization can be greater than what you realize. Second, something I read from (‘Seven Habits of Highly Effective People’ author) Stephen Covey — seek to understand before you seek to be understood.

What is your definition of success?

Cockrell: Success is very clear for us — to be defined as the world’s finest financial institution, for employees, clients and shareholders. You have to believe in this journey, and Brett and I believe that with the power generated by our integrated company, we all win.

Bernard: I would define success as a three-legged stool: employees, clients and shareholders. When we are a destination of choice for all parties, we know we are getting it right.