Let’s say your company acquires another company that is made up of ten separate entities. This company you have just acquired has also been acquiring companies but they have not consolidated anything other than Payroll and accounting processes.
This means there are ten separate entities in 10 different cities running pretty much as separate companies. That’s right, , , ten IT platforms with ten IT organizations supporting them.
One of the companies does not fit your business model, , , in fact, their clients are competitors of your company. So the decision is to shut this entity down and to eliminate the IT organization supporting it.
This is exactly a situation I had in 1994. The “odd” entity was a service bureau organization providing systems and business application services to our competitors, , , not something we wanted to continue supporting.
As the CIO it became my job to shut the “company” down because it was essentially an organization made up of programmers, business analysts, and data center staff.
They are good people, but “in the wrong place at the wrong time”, as they say.
I needed to terminate this group of employees without creating a tidal wave problem with the employees in the other nine companies. Handle this situation poorly and our company is going to have major challenges with employees and potentially clients due to the uncertainty it creates.
In addition, even though this company’s clients are my competitors, I don’t want to do anything that damages their business, , , word gets around we are a “heavy handed” company without any sensitivity to employees and clients can jeopardize our future acquisition plans.
So, here is the plan we executed, , , the company’s manager we are going to eliminate and me.
First, we announced our decision to the staff and gave them a transition plan which included:
- Guaranteed length of employment for 90 days
- Bonus to help us transition
- Outplacement support
- Time to interview with other companies
Next, we contacted each client and gave them our plan along with a commitment to support their migration to another support company, , , up through 90 days. We met with the largest clients that made up more than 70% of the business.
We successfully transitioned the business and there were no employees who became unemployed.
The key to our success was being up front, open and honest about what was going to happen, and putting in support mechanisms to reduce the impact of “being in the wrong place at the wrong time”.
Many of these employees went on to have very successful careers.