The bidding has begun yet again on Hulu. Owners, the Walt Disney Co, News Corp, and Comcast Corp are considering selling and several suitors have come a knockin – Yahoo, KKR & Co, Silver Lake Management/Hollywood agency WME, Guggenheim Digital, Time Warner Cable (interested in becoming a 4th co-owner), DirecTV, and the Chernin Group.
Acquiring companies is tricky business. If an investment company takes over they may just pump in the cash and look for ways to leverage the brand of Hulu, subscribers and content. If the latest crowd to the party, Yahoo, acquires then you may have a merging of cultures and expertise’s.
According to INC magazine, Nancy Rothbard, a management professor at Wharton School at the University of Pennsylvania states that recent studies show the failure rate of mergers is close to 75 percent, and the majority don’t produce the expected financial returns for years after the merger has taken place.
So here’s some advanced advice for those looking to snatch up Hulu and merge cultures…
1. Not so fast – don’t change cultures quickly. Agree on shared visions and values first and accept that not everything will be consistent. Determine what are the must haves, those things that have an impact on the bottom line, and let the rest be. You do not need to change everything in order to make change work!
2. Avoid “me have, you don’t” – be weary about giving more to one culture than the other. It will seem as if you are a parent playing favorites. Everyone should feel they are treated equally and not seen as the ugly stepchild.
3. Communicate, communicate and once you are done, communicate again – create a thorough communication strategy that lasts for at least 12-24 months. People must know what is expected of them in this new environment and if you don’t know enough to tell them at the start, tell them when you will know. Make sure when you say something you mean it and give people the feeling they have a voice.
4. Keep satellite offices in the know – if you have satellite offices, help them feel that they are also part of the process. Send your executives to visit them often. People will only know you care when your actions show it; otherwise it’s only lip service.
5. Know when you are on track – change does not happen overnight. Consequently, people need time to adjust to the new times. How much time depends on the individual. Take care to train and develop employees to understand how to foster this “new” culture. Everyone has a unique set of issues, gathered from both work and life experiences. Understand that any time you involve people things necessarily take time. You will know you’re off track when people start using the word “they” rather than “we”. When people speak collaboratively, it demonstrates greater alignment.
6. Skills and flexibility – How ready are people’s skills, aptitude and attitude to take on new changes? How nimble are the employees from both companies? Where have they stretched in the past that they can leverage now? How well do both employee groups act in a crisis? Do you have the systems, processes and procedures that will reinforce the change? Does the culture support the implementation of such changes?
7. Know what you are getting into – not just in terms of the product you are acquiring, but also the people and culture that come along with it. Too many companies make the mistake of not doing the necessary due diligence on this important pre-merger step. Don’t fall into that trap.
We all have to wait and see what shakes out in the ever-evolving content and media business.