The rumors over the weekend that SAP is readying a big acquisition (in the $2 billion range, according to German newspaper Welt am Sonntag — via Bloomberg), got me to thinking about lean practices in the context of a growing company.
Our economic woes have backed many manufacturing companies against the ropes. But in every storm there are those who sail ahead, and the most progressive and well-run companies tend to consider bad times simply a precursor to good times. With that mind-set, some leading manufacturers are pursuing acquisition strategies amid the doom and gloom that has kept others frozen in fear.
But how to maintain lean practices when you’re growing? It begins with an integration strategy. Here, the case of SAP rival Oracle is instructive. A savior or predator in the M&A world, depending on your vantage point, Larry Ellison and team have nonetheless excelled at integrating acquired companies into the Oracle architecture.
That’s not to say the decisions attached to an acquisition aren’t troublesome. No one wants to think of workers as flotsam, but that’s what an acquisitive company must do. And when it comes to lean, whichever workers remain with the newly integrated company must know up front that their work processes will change. Only early, rigorous training and thorough monitoring will ensure that your company’s lean practices seep into the newcomers’ routines, and stick.
Ralph Bernstein of the Lean Insider blog has some additional thoughts on valuing a company in a lean-based framework, and the differences between lean-focused M&A and traditional acquisitions.
Maintaining Lean After an Acquisition
The rumors over the weekend that SAP is readying a big acquisition (in the $2 billion range, according to German newspaper Welt am Sonntag — via Bloomberg), got me to thinking about lean practices in the context of a growing company.
Our economic woes have backed many manufacturing companies against the ropes. But in every storm there are those who sail ahead, and the most progressive and well-run companies tend to consider bad times simply a precursor to good times. With that mind-set, some leading manufacturers are pursuing acquisition strategies amid the doom and gloom that has kept others frozen in fear.
But how to maintain lean practices when you’re growing? It begins with an integration strategy. Here, the case of SAP rival Oracle is instructive. A savior or predator in the M&A world, depending on your vantage point, Larry Ellison and team have nonetheless excelled at integrating acquired companies into the Oracle architecture.
That’s not to say the decisions attached to an acquisition aren’t troublesome. No one wants to think of workers as flotsam, but that’s what an acquisitive company must do. And when it comes to lean, whichever workers remain with the newly integrated company must know up front that their work processes will change. Only early, rigorous training and thorough monitoring will ensure that your company’s lean practices seep into the newcomers’ routines, and stick.
Ralph Bernstein of the Lean Insider blog has some additional thoughts on valuing a company in a lean-based framework, and the differences between lean-focused M&A and traditional acquisitions.