Company change Featured

7:00pm EDT February 23, 2009

With the slumping economy, Greg Beyerl decided there was only one way for his company to grow: through acquisitions.

As president and CEO of Sign Craft Industries, Beyerl set a goal in early 2008 to reach $10 million in revenue by 2010. Since then, the sign company has acquired two of its competitors and posted 2008 revenue of $5.3 million, and Beyerl projects 2009 revenue of $9 million, putting the company well within reach of its goal for 2010.

Because Beyerl was already familiar with the customers and management teams of the acquired companies, a large component of the transition was communicating the change to the 60 employees, both old and new.

Smart Business spoke with Beyerl about how to inform employees about an acquisition and how to help them adjust through the change.

Q. How do you communicate to employees about an acquisition?

During the process, you don’t want hardly anybody to know because information getting out can be catastrophic to either company if the acquisition does not go through. We waited until the deal was done.

We believed the best way to break the news was in large group meetings. Finding out information from other than the source is never good.

We told them upfront what the objectives were, what we thought the numbers were going to be when we’re done looking at the two companies, how we’re going to go about the process and, again, with an eye on integrity, we stood by what we were going to do.

Be honest. That goes from why the acquisition made sense, what our objective is out of making that acquisition, and more importantly, because they probably didn’t listen to an awful lot of that, start off with what’s the impact on them.

Whenever you get into one of these acquisitions, you have the nasty word that goes around that’s called synergy. It’s a beautiful thing for companies — that’s what makes a lot of these acquisitions worthwhile — but to an employee base, that means that people are going to be losing their jobs.

We conveyed to our employees and to the other employees that if you’re good at your job, if you work hard, if you do the things that you’re suppose to do, you’re going to have a job.

We candidly tell them upfront that we will be reviewing everybody on both sides and try to get the best set of employees in the right jobs that we can.

Q. How do you determine which employees to keep and which ones to let go?

It’s an awful lot of hours and time and effort and meeting with people.

Meeting with prior managers to get a good understanding of the skill set of the people that you’re bringing on. Hopefully when you go into the acquisition, you have a very good understanding of the skill set of the people you have on board already.

It’s spending time with the people, whether it’s the CEO or the people that he trusts, to really build the team to move the company forward. You’re going to make mistakes, but you do the best you can out of the process.

It’s pretty simple to make the decisions on a small portion of the employees. I think it’s pretty much a consensus — and I think that’s true with almost every company — they have some people that probably just shouldn’t be there.

Then you run into the group that it’s just a very difficult process [to evaluate them].

You just take your time and get to know those people, and you get to know their work and how they do. Then you make the final cuts once you have a clear understanding of their ability to do the job.

You can’t help but get employees involved. We sit down with every single employee of the company being acquired. Obviously, they start speaking of other people, so by default, you get an awful lot of input from employees.

They have a clarity in their mind of who they want to work with. We don’t have to ask. They come in and say, ‘Hey’ — and it’s on the positive as much as it is on the negative — ‘Boy, this is a fantastic eye; we need to keep them.’

Q. How do you make a smooth transition for people?

It goes back to listening to your employees, being very open and very candid with the employees and saying, ‘This is what we know about you. This is what you can bring to the table. Tell us what you think is different.’ Then give them a chance to go through the process.

I think the key is to get people comfortable and working together as quickly as possible.

We have intermixed the people from both companies quite a bit. That is really beneficial, just letting them work together.

These are people that they’ve been working against for years and years and years, and all of a sudden, all the myths that these people aren’t at the same level, you have to break down those barriers. The only way you can do that is show the competency of the people you brought on board from the other company.

HOW TO REACH: Sign Craft Industries, (317) 842-8664 or www.signcraftind.com