If you are part of either Zimmer (NYSE:ZMH) or Biomet, whether as a direct employee or an independent contractor, congratulations on the big news last week. These are exciting times in orthopedics! But, now what? The phone-calls and emails have already started coming in from people on both sides wondering what to expect. What can you expect to happen and when?
No one has a crystal ball, but having been through the Stryker (NYSE:SYK)/Howmedica acquisition myself in 1999 and having watched many others, I can provide you a little insight into what you might expect to ensue over the months ahead.
M&A 101 teaches that the top brass must convey to their people the message that "Everyone is going to be fine! Don’t Run away."
"There’s room for everyone in the New Zimmer-Biomet."
"Both companies were highly profitable separately and we’ll be fine as a new entity, so relax and keep your head down."
Every manager on both sides will be chanting the mantra from on high as good soldiers. But know this: cuts will come. They will be deep and many will be impacted by it.
Unfortunately, you’re not safe just because you are doing a great job in your respective role. This is where, if you haven’t been a good strategic "political" player, you’re going to wish you’d had. In the end, they will pick sides. Sometimes these decisions are obvious and other times they are counterintuitive. This is why Politics plays such a huge part of these decisions.
Consider that there is duplication in virtually every single position in the newly combined company. And even though they told you that there was room for everyone, we all know better. That never works. It’s just what they tell you so that they get their pick rather than having it made for them by someone leaving before they get to choose.
The simple fact is that there is not room for everyone in the new company. One of the reasons an acquisition this large works is the "economies of scale." Yes, you can expect another round of commission cuts as well, but for now, lets focus on your job security.
You always thought that there was greater job security in a larger company and you were wrong. An acquisition changes everything. Don’t get too confident just because you work for Zimmer, either. That alone will not ensure you are safe from being part of one of the RIF (reduction in force) waves. You’re not safe. In fact, if you’re not already a savvy political player, its probably too late for you.
But it isn’t too late to learn that the best way to ensure that you are kept around through an acquisition is to play nice among your peers and beyond. People wrongly believe that simply by doing a great job in their specific role, they are immune from ever losing their jobs when downsizing happens, but they are most certainly vulnerable if they don’t spend significant time and energy positively engaging with the people around them.
Companies going through such a process benefit greatly from the goodwill of hard working people who stay focused on the prize of being part of the "chosen" in the new company. But many unsuspecting people will get their pink slips and feel betrayed because they did what they were told and didn’t look out for themselves.
The truth is that your priority is to provide for your family and the best way to do that is by building strong relationships within your company, as this is the key to survival in Corporate America. You only need to watch one season of Survivor on TV to get a microcosm of what a merger of two separate companies looks like. If you have the right alliance, you might survive. But beware, because just when you thought you were in the right alliance, you’ve been "blindsided," and voted off the island.
No one can know with total certainty what their fate will be, but there are things you can do aside from keeping your head down and trusting that the corporation has your best interests at heart. Brush up your resume and pay very close attention to who is making a play for power and build an alliance to the best of your ability throughout the company.
The fact of the matter is that there will be multiple phases of layoffs. It happens every time there is an acquisition. Unfortunately, it is part of the code to mislead you that everything will be fine, but it isn’t. Don’t be naïve and caught off guard. In light of the delayed closing of the Zimmer deal, set for early 2015, there will be a lot of "business as usual" with the two companies as they merge, so my advice is to start building alliances with as many people as possible, and not just the people on your side of the fence. You cannot afford to assume that your side will win regardless of the logic of the argument. You simply cannot predict who will win with any certainty. The only thing that you can be sure of is that there will be very deep cuts in the number of people in the new combined Zimmer-Biomet.
Playing politics is widely regarded negatively and I would say that if that is all you rely upon for your job security, shame on you. If, however, you are great at your job, and not a political player, that isn’t enough to survive. You must be great at both. You must be proactive and effective in building rapport with all constituents within your sphere of influence.
Having said that, you’ll see some people get to keep their jobs who clearly shouldn’t and you’ll see some outstanding talent kicked to the curb. Remember, they’re only human. These people have to make some difficult decisions and many of them labor greatly over them, knowing that their decisions will hurt people.
Lastly, if you are one of the unfortunate ones who gets laid off as part of one of the RIFs, don’t take it personally and don’t let it drag you down. There IS life after Zimmer-Biomet. Keep your chin up and strive toward finding a great place for you to contribute to the ongoing success of a new team. Leverage your talent and experience in a fresh environment. Godspeed!
Drue DeAngelis founder and Managing Partner of The De Angelis Group. Drue has spent more than 27 years in the Orthopedic Industry. The first half of his career was spent working for Zimmer and Stryker in sales and sales management of their fastest growing branch in the U.S. Over the past 14 years, Drue has built and operated an Executive Search & Consulting firm focused exclusively in orthopedics.
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