As has previously been announced, Galson was recently purchased by SGS, the world’s largest certification and testing company based in Geneva, Switzerland. Those people who know me know that this is not the first time the company I worked for, owned by an equity management firm, was purchased by a Global company. In fact, on the surface the two situations appear to be similar.
My first experience of being integrated into a very large corporation can be best characterized as a slow process. The comparison to my first experience and SGS acquisition of Galson, so far is day and night.
As a matter of fact, I’m sure that this experience and the benefit to our clients will be one of progress for the following reasons:
1) Galson was purchased in order to be the flagship operation among a number of other accredited IH labs owned by SGS. These laboratories are located in China, Brazil, Spain, and Australia. Our purchase is part of an overall strategic plan that will export the procedures and culture that has made Galson successful to these other labs. I’m sure that Galson will also identify procedures and service offerings that can enhance our US operations. The end result will be that our multi-national clients will have access to local laboratories that will offer the quality and customer service they have come to expect from Galson and our domestic clients will benefit from the lessons and capabilities we will receive from the overseas labs.
2) This is completely different from my first experience in merging companies together when in the first case the buyer took two proud companies that were in a very spirited competition with each other for over twenty years, possessing diametrically opposed corporate cultures, dramatically overlapping books of business, and lying in close proximity to each other (300 miles) and then expected them to work together while basically remaining competitors in order to meet their independent (and aggressive) growth targets. I have deep respect for the people involved from both labs even though the “integration” more often resembled a cage match.
3) There is no deadline for integration. SGS management realizes that although Galson is now an SGS company, forcing it into a pre-determined mold could end up hurting the values (innovation, market responsiveness, client empathy) that made it an extremely successful (and profitable) operation. The value of the Galson brand is recognized and the timetable for integration is strictly “when it makes sense”. In my previous integration experience, I had to spend way too much of my time trying to manage problems caused by observing artificial deadlines instead of carefully planning out a successful integration. This was especially true in areas outside of my direct control, such as IT, finance, and marketing.
4) Along the lines of “making sense” SGS has asked the right questions regarding our book of business and determined that given its makeup, it did not make sense to compete against our clients in the US. This is in spite of the news that one of our competitors (you know who you are) is attempting to spread that word to our consultant clients. SGS does offer field services in a large number of other countries and as I have previously said, many of our clients are looking forward to having these resources available. For our consulting clients we will now have the ability to get them involved in Global contracts that we did not have access to previously.
5) Getting rid of an equity partner is always a good thing. These companies exist to buy, package, and sell firms in order to make a profit. This is neither a good or bad thing, just a fact of life. Part of their operating model is to strictly control expenses which can, as a side effect, stifle innovation and capital investment since they are controlling the money without a deep knowledge of the business. Galson/SGS will now be able to make investments insuring the long-term health and growth of the operation.
So I’m feeling good about the sale. Many IH Laboratories have been acquired (DataChem, NATLSCO, Clayton, and others) by large multi-nationals with deep pockets and Galson will be able to compete on a larger stage with SGS as a parent. Upper management is being thoughtful about integrating us and I expect the corporate staff to be a great help going forward. During the phone conversation where I was introduced to upper management I was asked specifically what went wrong last time so it could be avoided, reflecting the overriding concern that things be done right. I’m not so naïve to think that things won’t change in going from a small, tightly knit group to a company with 80,000 employees, but from what I have seen so far the things that have made Galson a trusted partner to its clients will remain.
Categories: Bill Walsh