Managing growth at multinationals: Acquisitions, millennials and communication

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Speedy growth presents all sorts of challenges for multinational companies, from how to integrate employees of newly-acquired firms to how to communicate to staff worldwide.

Fernando Campo, vice president of software company Citrix Systems (pictured above), shared his experience with global growth and led talks on the topic at WorldCity’s CEO Club on Oct. 3. Discussion even touched on hurdles that multinationals face in trying to foster innovation inside their company.

“Sometimes, even if you develop [a break-through product or service] internally, it takes time for the market to understand that you are [working] in that new space,” Campo said. “But when you acquire it, it sends a signal to the market you are in that space. It’s an intangible value” that acquisitions bring.

Campo knows first-hand the complexities of growth, especially through acquisitions. He joined Citrix 14 years ago when his former employer was purchased by the Fort Lauderdale-based software pioneer. Back then, Citrix had less than 1,000 employees. Now, it has more than 10,000 people worldwide.

Citrix likely has done 30 acquisitions in the past 14 years, some large and some small, some in the same business and some in adjacent fields where the company seeks to expand its footprint, he said.

To handle the purchases, Citrix has developed special teams, a process for due diligence and a system to integrate the new employees. Still, every purchase presents unique challenges, said Campo.

“Even now when we do an acquisition, there’s always a very big element of disruption in the organization,” Campo told the group featuring executives from firms also accustomed to mergers.

Integrating employees from acquired companies

Do you fully integrate sales people of the acquired company, or do you keep them separate for a time?, asked Marta Clark, vice president for Latin America and the Caribbean for Adobe Systems.

It depends on the size of the company purchased and how similar their

Marta Clark, vice president for Latin America and the Caribbean for Adobe Systems. Photos by Carlos Miller

Marta Clark, vice president for Latin America and the Caribbean for Adobe Systems. Photos by Carlos Miller

products and services are to what Citrix sells, said Campo. Generally, the sales force of the acquired company stays separate for at least six months before it is integrated. In some cases, it may stay separate altogether, he said.

What role does human resources play in bringing in employees of the acquired company?, asked Edvard Philipson, vice president of Latin America for Ferring Pharmaceuticals. Effective “on-boarding” matters, “because people are what makes the difference.”

The HR department plays a huge role in the process, said Campo. For one, compensation often differs in what a startup with 125 people pays and what a multinational offers. Larger companies also may make different demands on staff, perhaps expecting greater sales or territorial responsibilities, he said.

What’s vital is “managing expectations upfront on incubation and integration,” Campo told the group.

Gustavo Sorgente, director general of Cisco Systems Latin America.

Gustavo Sorgente, director general of Cisco Systems Latin America.

Cisco Systems sometimes leaves the acquired company separate for a while to ensure its culture of innovation remains intact. Big multinationals can be bureaucratic, and integrating small firms fast can disrupt what makes those startups creative, said Gustavo Sorgente, director general of Cisco Systems Latin America.

“If we jump in too early, we can kill the innovation,” said Sorgente.

Managing expectations for Millennials

Integrating employees nowadays differs from five or seven years ago anyway, “because young people come in with different expectations,” said Sorgente. “It’s a profile of people that we have to adapt to, because we are not going to change them.”

Many young people coming in with acquired firms are part of teams that grow and flip companies. They stay with the acquiring business until they get their “earn-out” payment and then, leave to start up another firm, sometimes with the same team of people, said Campo.

“They love being an environment where there are less rules, where they are empowered to do whatever it takes to land a deal,” said Campo. “There’s not much we can do to retain them.”

Jim Giustini, managing director in South Florida for business consultants RGP.

Jim Giustini, managing director in South Florida for business consultants RGP.

Have you uncovered any surprises in recent acquisitions, even as you apply best practices from years of making purchases?, asked Jim Giustini, managing director in South Florida for business consultants RGP.

“The older brother is not always smarter,” said Campo, noting the smaller firm being acquired often can teach important lessons to the more established multinational buyer.

That was the case with a small consulting firm that Citrix bought that was innovative in “managed services” handled remotely for customers. The consulting firm had “very tight processes” including ISO certifications. Citrix was so keen on their approach that “managed services is becoming a fairly strategic part of our business,” said Campo.

Steve Bartley, principal of executive search firm Americas Gateway-Search & Consulting.

Steve Bartley, principal of executive search firm Americas Gateway-Search & Consulting.

“More and more, we’re being asked to offload the entire management of their desktop,” Campo said.

How big a part of Citrix is in-house research and development versus going out to buy out?, asked Steve Bartley, principal of executive search firm Americas Gateway-Search & Consulting.

In-house teams more often refine existing products, and innovations largely is acquired, said Campo.

Coping with “the law of distance”

How much innovation do you acquire in Latin America?, asked Ferring’s Philipson.

Citrix buys companies mainly in the United States, especially in Silicon Valley and North Carolina. It also has made some purchases in Israel and Europe. But it hasn’t looked much at Latin America, said Campo.

It’s curious that Citrix derives most of its revenue overseas but still makes most purchases near its engineering and strategic base in Silicon Valley. That illustrates “the law of distance,” which says that you do business with people you know, said Olivier Bouclier, associate dean for executive education and graduate business programs at the University of Miami School of Business.

“It’s not a level field,” said Bouclier. “The world is not that flat.” 

Olivier Bouclier, associate dean for executive education and graduate business programs at the University of Miami School of Business.

Olivier Bouclier, associate dean for executive education and graduate business programs at the University of Miami School of Business.

Some U.S. executives show their domestic focus at global events with speeches full of U.S. cultural references, especially quarterbacks and American football – a game hardly known beyond U.S. shores. “And everyone is asking, “What are they talking about?,” said Campo. “It makes you look out of touch.”

A prized skill for leaders at fast-growing multinationals: To communicate effectively with global audiences.

The CEO Club is one of six event series organized by media company WorldCity to bring together executives in greater Miami on international business topics. The CEO series is sponsored by real estate company CBRE and the University of Miami School of Business Administration.

The next CEO Club is set for Dec. 5.