Mergers and acquisitions have long been a part of the medical device industry and will continue to be in the future. Smaller acquisitions are commonplace but in recent years more substantial mergers have also become the norm.
I have experienced two “mega mergers” as they are often termed; first as part of the spine sales team at DePuy as Synthes became part of the J&J Family in 2012 ($21.3b) and again as sales training manager for Zimmer as we merged with Biomet in 2015 ($13.4b). These, along with other mergers – including Medtronic & Covidien in 2014 ($43b), Abbot & St. Jude in 2016 ($25b) and Wright & Tonier in 2015 ($3.3b) – have seen over $100 billion spent on mergers in just four years. To put this in perspective, only 15 countries in the world have a GDP greater than that amount. This also does not take into account the relatively smaller mergers that are constantly taking place: For example, in the first year post-merger, Zimmer Biomet acquired a further eight companies.
The analogy I have often used to describe these experiences has been that of two planets colliding. Typically, the rationale behind merging is about acquiring market share, perhaps diversifying portfolios and product lines. The logic that usually follows is that 2+2 will equal 4, right? However, if you imagine the impact of these planets, as they collide, the heat, the debris, the fallout, this may not always be the case, at least in the shorter term. A newly formed plant requires significant time to establish itself in the universe, to align itself with outside influences and to develop a new set of complex ecosystems in which to sustain a healthy and productive environment. So, 2 + 2 may therefore end up equalling 3, which is a tricky equation to explain to investors.
I have not been at the epicenter of these events, merely observing from my relatively remote location down under, within the bubble of my role, as the ripples and aftermath of these highly complex deals shape and influence my world. However, I hope I can provide some insight with my personal experience and offer advice and perhaps caution, for what may lay ahead as our universe continues to evolve and collide.
Training is critical in helping manage these transitions, ensuring they are a success and occur as quickly as possible. There are three key areas that tend to drive training activity as the pressure mounts on business to move forward and prove the value of the deals to the stock market; (1) product training, (2) sales training and (3) cultural alignment.
1. Product Training
When you bring two companies together, The board sees an expanded portfolio and wants it sold as quickly and effectively as possible. Therefore, the need presents itself to bring the sales teams in for all-important “product training”.
At Zimmer Biomet in Australia, Biomet operated as independent state based distributors. Therefore, “Day 1” for the newly formed company was only the beginning of legal discussions to buy out the contracts from those distributors. Subsequently the Biomet sales team did not come across at the same time, instead at different points between June-October 2015. There would be little warning, perhaps a hint or a rumor, days before and then a new sales team would theoretically be formed at state level. Overnight the legacy Biomet reps could now sell Zimmer products and the legacy Zimmer reps could now sell Biomet products, all this after months of legally necessary communication embargo between the original two teams.
The Zimmer sales teams had received pre-emptive training, however this may have been weeks, perhaps months in advance, with no further practical consolidation possible. We were as proactive as possible in training the Biomet teams, anticipating the closure on agreements, so scheduled training in the first weeks when it was possible. This meant we could ensure both legacy teams had the basic information required at hand and a structure in which to communicate with their new colleagues for practical support, as quickly as possible.
Insight: Whilst timings and a multitude of commitments often dictate the when, the where and the how. It’s important to bring the teams together as one, as soon as possible and then again as often as possible. Put all the teams through the same training interventions, do not continue to segment and isolate legacy teams. For each state team at Zimmer Biomet, we held a weekend product fair and put the training in the reps’ hands, showcasing product experts and beginning to form professional and social bonds.
2. Sales Training
Product knowledge is a vital tool in effectively communicating detailed information to customers but in an increasingly competitive environment we also need to instruct our teams on “how” to sell. Presenting a uniform voice, focusing on the same key messages, delivering the same consistency in presentation and quality, helping to speed up the process and achieving improved outcomes for customers and their patients.
At Zimmer Biomet, we delivered a bespoke internally developed sales model. This allowed us to have a shared language when discussing the sales process internally and gave our sales team a framework on which to drive their sales discussions with customers. Our delivery of this methodology came later post-merger and as part of a wider company role out across ANZ.
Where a seamless delivery of product training and sales philosophy is not possible, is it more effective to train product knowledge first and then layer techniques on top, or establish a sales frame work and then layer product and clinical information afterwards? Logic tells me the later but practicality unusually forces the former. Perhaps this is a case of the chicken and the egg but I would argue, if first I know how to sell, I can then assimilate the key product information to this model, rather than trying to retro fit my knowledge to a prescribed way of communicating it. The sales philosophy is an important bridge between product and culture; this is what your communication is founded on, internally and externally. Who you are as an organization, how you engage with your customers and how you facilitate solutions for them.
Insight: Product training is king and provides the competence to sell but this can often fall victim of information dumping and box ticking, where possible if it can be delivered alongside a sells methodology and contextualised, this would be the ideal. Competence has little impact, beyond purely a service model, if there is no confidence and belief in the products and how they are sold. The emphasis is often placed on competence through product training but the key to unlocking that potential lies in the confidence created by a structured sales process.
3. Cultural Alignment
Finally culture and how to define it. Often a headline during mergers is that “our cultures are aligned” however, if you take any established group of people, who have formed a team, identified with each other, built trust, won and lost battles in a competitive environment, it is always going to be hard to align “culture.” “Values” may be the same; trust, honesty, respect but the culture in which they exhibit is unique and often closed to the outside. Therefore, this needs to be nurtured effectively, culture must be reformed and a totally new shared entity created.
A helpful analogy that we used at Zimmer Biomet was that of an immigrant arriving in a new land, whether it be the founding fathers of the U.S.A., European immigrants to Australia or economic and political immigration from Asia and the Middle East today – Everyone comes to this new land with hopes and aspirations for the future, this may be mixed with trepidation and uncertainty but instinctively we want to find positives from the change ahead.
That said, we all wish to remain a part of what we were, we want to bring the best of the old with us and use it as a platform to reach even higher, setting new goals and discovering opportunities. However, we also must let go of the old before we can move forward and fully accept our new reality. Everyone must take this journey and everyone must take it at their own pace and in their own way. Don’t expect everyone to step off the ship at the same time, we move slowly, until we are assured that it is safe and we will be accepted for who we are. Only then can our cultures begin to blend and compliment one another’s. This period of transition is often a golden period where creativity and innovation can blossom, harness that time to redefine what the new world looks like and how to best move forward.
Insight: A new culture must and will form whether it is a healthy one or not. Therefore, have a strategy around culture, what is the best of the old worlds to bring to the new culture and what is historical baggage that could potentially be shed? Culture is a top-down phenomenon, so as leaders be deliberate about the shadow you cast, work to proactively shape culture with strategic intent. Have a business plan but also a cultural plan alongside it.
We may fall into the trap of addressing these priorities in the order they present themselves, product training being the first then sales training if we have the time and resources and hopefully the culture will follow. However, nothing can or will truly happen until culture has been addressed. It may well take a year for culture to settle but it will also be year before your legacy teams are effectively selling products they previously competed against, breaking out of the silo’s and product loyalties of old.
Of course, no business is going to withhold product training for a year while the team culture settles, or refrain from sales skills training until everyone has been bowling together. Therefore we must to see these three training streams holistically and addresses them equally, as one, at the same time, as well as in reverse order. (1) Culture (2) Sales (3) Product.
Insight: Approach each training session as an opportunity to impact culture, as this is the thing that training is uniquely placed to facilitate, no amount of rousing, unifying speeches can impact culture quite so much as bringing people together.
(1) Begin and end each session with a cultural piece. Ice-breakers are one thing, but can polarize a group as quickly as it can unify them if it is not the right activity, at the right time, with the right group. Rather than putting a brave face on the challenges and complexities of the merger, create an environment where people can share their concerns and experiences, allow an atmosphere of openness, trust and empathy to develop.
(2&3) Deliver product information and clinical knowledge in the context that it will be used. Lay the foundation for a communication style, consistencies in language and presentation. This is not at the sacrifice of an individual’s personality or style by creates a scaffold that on which those things can hang.
(1) End where you began and ensure culture is addressed, whether explicitly or implicitly. Give it time to evolve inside and outside the training room. Where possible, schedule training so that there is no hard finish where people need to be elsewhere, allow the training to come to a natural conclusion as new colleagues share information and develop mutual understanding.
Nick Fifield is sales training manager ANZ, for Johnson & Johnson. Email Nick at email@example.com.