RSSMore Rumblings from Stagnito: Some Employees May Be Unhappy
Recently, I’ve been getting a lot of calls and emails from Stagnito staffers unhappy with their new digs. I think this is an important story to follow because it–and other M&A activity, especially between strategics–can be a valuable case study in handling human resources during mergers.
Some things that I’ve heard:
- BNP has not provided Stagnito employees with a BNP employee handbook. One of the most important things to communicate to new employees–of any kind–is what their benefits are. I can understand, being an employee myself, why that might cause some anxiety in the ranks.
- Employees are asked to be at their desks by 8:30 AM, and the HR person checks. This reminds me of middle school, and doesn’t seem like the right way to treat a workforce.
- Lunches have been reduced to 30 minutes. Many employees used to like to leave the office for lunch, but the short lunch time (combined with the school-marm like attention to time at desk) doesn’t allow for that.
I’ve also heard that employees think that next week the first set of layoffs will be announced. Tagg Henderson, CEO of BNP, told me in an interview that they did not plan on laying anyone off and did not plan on shuttering any books. I like and respect Tagg, but I find this a little hard to believe. I don’t see BNP keeping Stagnito’s New Product Review or Dairy Fields around for much longer. And that, inevitably, will lead to layoffs.
During mergers, the new managers have to be careful to keep their employees relatively happy and calm. In our business, where virtually every product is a manifestation of the personalities that produce it, you don’t want a cranky workforce.
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news from inside stagnito. some employees on friday were docked vacation time for coming in late. These same employees worked over time during the week so unfair. Moral is way down and almost everyone is putting out resumes. They feel that they will be losing there jobs soon or they no longer want to work there.
Jeff: I am the relative of a Stagnito employee and happen to also work for the leading Big 4 Accounting firm in M&A Integration consulting. I must admit from what I’ve heard, as interpreted by my relative, this might be a top 5 worst integration case study. Granted both companies are small peanuts and I wouldn’t expect much more, but it appears clear to me that the C-suite executives have no idea what is actually happening. When one acquires a company that’s true, and really only, value is human capital, the integration management team must tread softly. For lack of more eloquent verbiage, pissed off employees do not perform. I agree that the new company policies must be communicated and enforced, however, I always coach the bearers of bad news on my deals to do it with a smile and a donut. Most importantly, you dole out the bad news slowly and carefully. All BNP has done is show that its executive team is not capable of planning major life events.
I’m not entirely surprised at this. BNP is a company that has chosen (wisely for them) to grow organically over the past 6 years, as opposed to by acquisition, by and large. Stagnito was too good of a target to pass up. Integration is not something the company is that familiar with.
Furthermore, I would not be at all surprised to see the shuttering of Dairy Fields and Stagnito’s New Product Review. From a business standpoint, this is probably what they should do. Perhaps this mistreatment of employees is some misguided prelude to that?
Hopefully, the hubbub raised through this blog and other outlets has caused those in charge at BNP to see that they need to look out for their new employees, lest they lose them. Last I heard, more than a handful of long-time Stagnito-ers are busy with their resumes.