Honesty holds team together during buyout

Why honesty is the best policy: Advice from a CIO who held his team together when a billion dollar company came courting.

When Sam Lamonica learned his company was being bought, he didn't run for cover. Instead, he took an approach uncommon during typical acquisitions: He was honest.

In fact, Lamonica, CIO of Rudolph and Sletten Inc., an $880 million general and engineering contractor based in Redwood City, Calif., said honesty and open communication can be the key to survival. A CIO should keep his team well-informed while offering the acquiring company a clear view of the good and the bad in his organization.

This is not the time to circle the wagons.
Sam Lamonica
CIORudolph and Sletten
"Don't let your team go into a shell," Lamonica said. "This is not the time to circle the wagons."

At last week's annual CIO Decisions Conference in Carlsbad, Calif., Lamonica explained how he survived his company's acquisition in November by Perini Corp., a $1.8 billion, Framingham, Mass.-based construction firm.

Lamonica said a CIO shouldn't hide the "warts" in his company because "it is what it is." Instead he should emphasize to the buyer the strategic importance of IT.

At Rudolph and Sletten, now a wholly owned subsidiary of Perini, Lamonica worked hard to leverage his company's technological superiority. He spent time with his new company to make sure it understood Rudolph and Sletten's technology.

As a result, Lamonica's organization has seen its role expand, offering its services and systems to other organizations within its new parent company.

Openness with the acquiring company isn't the only key to survival. The CIO must also hold his organization together without sugarcoating the situation.

"I was brutally honest with my team about who could be at risk," said Lamonica, who lost one employee to a rumor (he didn't want to wait around to see what happened) and one to redundancy. "I didn't want my team guessing and worrying."

Rudolph and Sletten had as many as 50 active construction sites at the time of Perini's courtship. With so many remote employees, the company was ripe for rumors. So Lamonica established a rumor central office, a single online forum where all rumors could be discussed, validated and debunked.

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"Use the tools you have -- the intranet, e-mail, videoconferencing, to keep information flowing," Lamonica said. He also held ad hoc meetings to keep all his people up to date.

A CIO must also know his future employer, Lamonica warned. As soon as he heard about Perini's interest in Rudolph and Sletten, Lamonica tried to find out everything he could about the culture of the new company.

Employees at the family-owned Rudolph and Sletten were uneasy about being absorbed into a larger public corporation. The key to fighting fear, uncertainty and doubt is understanding the acquiring company's own culture, Lamonica said.

"There are a lot of studies about integrating culture and people problems," Lamonica said. "The human factor. We knew early on that we'd spend a lot of time and energy focused on people problems."

Frank Volpe, director of information systems at Montvale, N.J.-based Farbest-Tallman Foods Corp., has been through his share of acquisitions, and said it is difficult to gauge the culture of another company. One can glean a little insight from annual reports and the Internet. Volpe said a CIO might have luck through networking, by leveraging the knowledge of colleagues in other companies.

Volpe recalled his experience at a previous employer: "The first reaction is to withdraw and get into a defensive position, when what you want to do is try to show your value."

But sometimes, no matter what the CIO does, his days may be numbered. However, even if the writing is on the wall, a CIO should continue to be a team player.

"The first time [an acquisition] happened to me, it was really a merger," Volpe said. "[I was gone] no matter what I did. I just took the high road and stayed to the end. It's a small community in IT, and you don't want to burn bridges."

Let us know what you think about the story; e-mail: Shamus McGillicuddy, News Writer

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