Value Staging Blog

Herb Kessner, Ph.D.

Like most financial headlines, it looked straightforward, a done deal and great outcome. By then it was. Its what came before, not in the headlines that made it interesting, challenging and helped shape the outcome. It worked, and it was anything but straightforward.

The Headline

New York, NY – 9/18/06 - Veronis Suhler Stevenson (VSS), a private equity and mezzanine capital fund management company dedicated to investing in the media, communications, information and education industries in North America and Europe, today announced the signing of a definitive agreement to sell its stake in Solucient, an information products company serving the healthcare industry, to The Thomson Corporation (NYSE: TOC; TSX: TOC).

The Scenario

Let’s roll back the clock a bit. In 1999 a private equity fund managed by VSS acquired the predecessor to Solucient and merged that company with businesses owned by VNU Group B.V. and the VHA to form Solucient. The predecessor included a unit of GE Medical Systems IT that was spun off by Jack Welch and added to the PE group. Yours Truly had been part of the GE consulting team to the Med Systems group at the time, and was essentially “acquired” along with the GE unit as it became Solucient.

What Really Goes On When You Roll Up Businesses

The five business units that now constituted Solucient had been, for the most part active competitors. They weren’t predisposed to like each other. The customer bases were pretty much the same except for one business that was an outlier that the others didn’t understand or think about much. The IT legacy systems were not easily or at all compatible across the businesses. The leadership of each business knew that not all of them would survive and believe me, none of them were pushovers. There was no single Brand and supporting material and MARCOM facing the customers. There was little or no cross-selling. The business processes were separate and unique to each unit and not all that efficient, and to add to the confusion, a new CEO was brought in to help. The brand-new CEO had been a programmer prior to the new role.

Now, imagine if you will, the off-site Change Acceleration Process workshop we all eagerly arrived for, a gentle early evening at the ritzy resort on the lake north of Chicago. My sponsor for the integration project, who I had been working with all along and understood the issues and nuances, I found out had been let go the day before the workshop along with his boss the head of operations. Gone. Instant sinking feeling, but we consultants pride ourselves on flexibility, after all, we do teach it.

Over the next four days of intensive CAP work we brainstormed, discussed, yelled, prioritized, action-planned, identified and mitigated risk, and dealt with stakeholder, Brand, personality, moods, interpersonal dynamics and communication issues. Each night I called my wife Sue back in San Francisco and had a combination detox and personal counseling session (good thing she’s a therapist).

It Worked Despite All That

We came out on the fourth evening with a set of agreed-on action plans that pretty much covered all of the above with resources and funding for every one. After all, the methodology we employ is sound and so far has worked every time. Looking back I think that 40% of the real sweat effort was structural and business process related, and 60% was squishy and interpersonal. Sitting down with various leaders at breaks and lunch and talking them through their fight or flight reactions, giving them reality checks. Solucient and its excellent staff did successfully implement the action plans and initiatives and as we have seen, was later bought out by a larger firm in the information space. Many of the attendees at the off-site are still with the firm and as of our recent conversations, are happy.

And they say consultants don’t earn their money.

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