When the company gets sold

September 1, 2003 By    

As the owners/operators of a small retail propane company neared retirement age, they chose to sell their business to a larger regional propane distributor. As is typical in this industry, the owners of the selling company were very active in the day-to-day operations, in the office as well as in deliveries and service to residential customers.

After the sale, two remaining employees – Maureen, essentially a customer service representative, and Richard, primarily a driver – were naturally on edge about the news. They knew that new owners often let people go after a company is purchased. A time was set for Keith, the manager of the new company, to meet individually with Maureen and Richard.

Keith met first with Maureen. He explained that the acquiring company planned on keeping the retail presence open in town and he would need a solid individual to handle a number of responsibilities associated with its plans for the business. He outlined several duties to include handling primary customer contacts and inquiries, but also assisting in accounts receivable management and inputting transaction and other data into the new system.

This new role was considerably more work and responsibility than Maureen had had in the past, but Keith offered her the position on a 90-day trial basis at a $2 per hour increase.

Keith then met with Richard, who had been one of the primary drivers for the old company with 15 years of experience. He was accustomed to long winter hours with overtime when the cold set in, but was usually rather idle in the off season, since he had no additional responsibilities beyond delivering propane.

Keith said there was a role with the new company for an individual who would have primary responsibilities for making deliveries, but who would also be expected to put in 40 hours of solid work every week, regardless of the season. Keith outlined a number of additional duties, including facilities maintenance, mowing and other general repair. In return Keith said the job paid $2 more per hour than the previous role. Richard reluctantly accepted.

How things turned out

At first, Maureen felt pressured into learning the new company’s procedures and was especially uncomfortable with the new operating system. But her duties became easier with some practice and familiarity, just as Keith had said they would. She began to look forward to each day’s new challenges and, in short, passed the 90-day trial period and became a very valuable employee with the new company.

Richard did not like the new arrangement from the outset. Because the sale of the company and subsequent transition happened during the summer, the delivery schedule was light. He immediately was immersed in tasks that he had not been asked to do in the past.

Keith asked Richard to conduct a thorough clean-up of the plant. A detailed maintenance and repair program designed to improve the appearance was implemented with Richard having most of the chores. Richard did not like his new maintenance responsibilities, and did not care for the painting and mowing. He complained often about the “keep busy” philosophy the company seemed to employ.

Within two months Richard left of his own accord to seek employment elsewhere. Richard noted in his exit interview that his new job was more work that he was capable of doing.

This is a true story that I felt was important to pass along. There are a few key issues I hope you noted as you read it:

  • Not all acquisitions are bad for the employees of the acquired company;
  • Not all people want to put in a full days work; and
  • Management techniques do not have to be complex in order to work.

Finally, what often separates very good companies from poor to mediocre companies is the interaction between managers and employees that happens at this level in the business.

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