The Wall Street Journal reports that Microsoft Corp. execs studied the integration of Hewlett-Packard Co. and Compaq Computer Corp. -- a previous tech deal that was big, contentious and complex -- for lessons to apply in a Yahoo! Inc. integration. So we thought we'd share some insights from Jeff Clarke, formerly evp for merger integration at HP, who played a key role in that massive project, which had 2,500 people working full-time on it. Currently CEO of Travelport Inc., Clarke shared his thoughts at our most recent
Corporate Dealmaker Forum conference, last October in New York. Here's some of what he had to say:
"[We] created a concept that a lot of people have followed, which we called "Adopt and Go." And what you had was two companies, Hewlett-Packard and Compaq, that had a lot of common functions. And we chose that rather than try and integrate everything perfectly -- in other words, take the Treasury Department of Compaq and the Treasury Department of Hewlett-Packard and pick the best people and the best processes and re-engineer it, we said, 'If the HP one or the Compaq one is good enough, let's figure out which one's the best and go 100% with that and effectively dismantle the other one.' By doing that, speed became more important. So we were able to integrate faster by not having to re-engineer every process, and simply taking the better of the two processes. And that got us to faster synergies, more clear directives."
Like HP-Compaq and other major deals such as Cingular's
acquisition of AT&T Wireless in 2005, a Microsoft-Yahoo!
integration would also need to use a so-called clean team or clean room.
These enable teams of executives who've been removed from their regular
duties to work with consultants to dive into integration planning while
a deal awaits regulatory approval. We'll have more about them in a
later post.
- Kenneth Klee
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