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PROVIDE NEW TOP MANAGEMENT

THE BUSINESS THESE PEOPLE SELL IS THEIR “CHILD.”

Within a year or so, the acquiring company must be able to provide top management for the company it acquires. The buyer has to be prepared to lose the top incumbents in companies that are bought. Top people are used to being bosses; they don’t want to be “division managers.” If they were owners or part-owners, the merger has made them so wealthy they don’t have to say if they don’t enjoy it. And if they are professional managers, without an ownership stake, they usually find another job easily enough. Then to recruit new top management is a gamble that rarely comes off.

This applies particularly to a CEO who originally built the company that he or she sold. Very often this CEO has actually initiated the acquisition. He or she typically expects the acquire to make the changes that he or she has been reluctant to make – for instance, get rid of an old employee who is a close friend and has served the company faithfully as it grew but has been along outgrown by the job. But still, the business these people sell is their “child.” And the moment it is owned by someone else, they become protective and see their job as defending the “chilled” against one of those unfeeling “foreigners” who now own it.

ACTION POINT: Investigate a recent acquisition by your company or another company. What happened to the top management of the acquired company?

PROMOTE ACROSS LINES

POLITICALLY, THE PEOPLE IN THE ACQUIRED COMPANY BECOME “US” DETERMINED TO DEFEND THEIR BUSINESS AGAINST “THEM.”

Even if all the rules have been faithfully observed, many acquisitions end up failing or at least take forever before they live up to their expectations. Legally the acquired business is now part of the acquiring company. But politically, the people in the acquired company become “us” determined to defend their business against “them,” the people in the acquiring company. And the people in the acquiring company similarly think and act in terms of “us” against “them.” Sometimes it takes a whole generation before these invisible but impenetrable barriers come down. It is therefore imperative that, within the first few months after the acquisition, a number of people on both sides are promoted to a better job across the lines. This way both sides see the acquisition as a personal opportunity.

The goal is to convince managers in both companies that the merger offers them personal opportunities. These principle apples not only to executives at or near the top, but also to the younger executives and professionals, the people on whose dedication and efforts any business primarily depends. If they see themselves blocked as a result of an acquisition, they will “vote with their fee,” and as a rule they can find new jobs even more easily than displaced top executives.

ACTION POINT: Make sure you promote people in the wake of an acquisition.

“If the stock market exists, so must previous lives.”

MARGARET ATWOOD

“Having a coach or mentor is nothing more than sharing life’s experiences, no amount of education can substitute true life experience”

LACHLAN MCPHERSON

“I love supporting blue chip companies’ revival. Shows wise when you are on the top and you are still not ignorant & arrogant to realise your weaknesses.”

CSABA GABOR-B.

“Some people did business with me because they wanted to get close to me, others did business with me because they were afraid to say no.”

LARRY FORMATO

“But you just watch, little girl. I’m goin’ to show ’em. In five years they’ll come crawlin’ to me on their bellies. I don’t know what it is, but I got a kind of feel for the big money.”

JOHN DOS PASSOS

 

“In order to win as a contrarian, you need perfect timing and the perfect size.”

HENRIQUE M. SIMÕES

“You will never be a greater risk-taker in the markets if you approach life with a completely different attitude.”

HENRIQUE M. SIMÕES

“We can’t all be bakers or chefs. Many of us have modest ambitions. But we can all buy a piece of the pie.”

AMAH LAMBERT

“Reliability investing requires finding companies trading below their inherent worth–stocks with strong fundamentals including earnings, dividends, book value, and cash flow selling at bargain prices give their quality.”

AMAH LAMBERT

“The reason for what a certain stock does today may not be known for two or three days, or weeks, or months. But what the dickens does that matter? Your business with the tape is now – not tomorrow! The reason can wait. But you must act instantly or be left.”

JESSE LAURISTON LIVERMORE

“We don’t live in a free market society… markets are controlled by the major players who influence legislation to perpetuate their control…”

MIGUEL REYNOLDS BRANDAO

“The gist of Laszlo’s pitch for the equity department was this question: When you turn on your television at six-thirty and Dan Rather tells you that today the market went up twenty-four points, what market do you think he means? “What!” Laszlo would say. “You think he’s talking about Grade A industrial bonds? Ha! He’s talking about the stock market.” In other words, if you joined the equity department, your mother would know what you did for a living.”

MICHAEL LEWIS

“All through time, people have basically acted and reacted the same way in the market as a result of greed, fear, ignorance, and hope. That is why the numerical formations and patterns recur on a constant basis. Over and over, with slight variations. Because markets are driven by humans and human nature never changes.”

JESSE LAURISTON LIVERMORE

“Trader has to reverse what you might call his natural impulses. Instead of hoping he must fear; instead of fearing he must hope. He must fear that his loss may develop into a much bigger loss, and hope that his profit may become a big profit.”

JESSE LAURISTON LIVERMORE

“Ban short-selling, high speed trading and all other instruments of pure speculation”

MIGUEL REYNOLDS BRANDAO

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