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Keep the Best-Lose the Rest

Hotels, utilities, banks and bagel shops - the chaos of merging companies does not discriminate. Everybody's doing it. According to Securities Data Company, of Newark, New Jersey, the value of domestic mergers and acquisitions totaled $659 billion in 1996. So if your organization was not one of those 10,257 transactions, don't get too comfortable - it could happen to you. With the nature of business changing so rapidly, how are businesses coping and making change that is positive? How do you retain the best and unique aspects of each? Where is the customer in all of this change? The story of two paper companies helps shed some light. By identifying their individual strengths and listening to their customers, both companies have made the merger a success.

The spring of 1996 saw the birth of a new organization in the bleached paper board industry. International Paper (IP) and Federal Paper Board merged their two organizations into a single entity. The new organization, IP, faced the challenge of combining the two different, yet successful, corporate cultures without disrupting the loyal customer base.

IP had a strong foundation of customer knowledge and supplied information about the key drivers of customer satisfaction. "We had a solid platform to build on and we knew the benefits," says Darryl B. Flamer, marketing manager, Bleached Board Division. "It was easy, then, to take it to the next level." The next level was to use the learning from this program to help facilitate the merger.

What the "new" company needed to know was how Federal Paper Board's customers perceived them, and on a comparative basis how customers who bought products from both companies felt about the services provided.

The company faced the challenge of combining the cultures of two highly successful, independent, and different organizations without disrupting the loyal customer base. This need led the company to develop a research program to uncover the "Best Practices" as perceived by customers of both companies and incorporate them into the changing organization.

IP had already been working with Walker Information, Indianapolis, Ind., to measure and manage stakeholder relations. Walker designed a "Best Practices" survey so customers who purchased from both International Paper and Federal Paper Board could identify who was best on key measures of product and service, determine the degree to which one company was better, and explain why they had that perception. The survey was very qualitative in nature. It gave respondents freedom to outline both what they liked about each organization and what they felt were improvement opportunities.
Perceptions from customers who did business with both companies and from customers who worked with only one of the companies were gathered. A wealth of supporting customer comments brought these perceptions to life.

The analysis incorporated previous performance, trends and key driver analysis to help develop the story. The informational tool that evolved as a springboard helped International Paper develop its action plans.
The study focused on four areas: product, outside sales reps, inside sales service reps and delivery.

Product
No major quality differences were noted regarding each company's boards. What the study uncovered, though, was that the relationship the customer had established with their partner company over the years played heavily in deciding which board they used. The reason behind this was the fact that the customer's equipment was set up to run at the maximum performance levels of each board. This knowledge was very useful in making strategic decisions about the future of each product.

Outside Sales Reps
The immediate challenge facing the field sales force was how to take individuals from two organizations with very different cultures and combine them into a cohesive group working towards the same goals and objectives. The cultures and past practices of each organization were examined. Then areas were documented where cross training and mentoring could be applied to strengthen the group as a whole.

Inside Sales Service Reps/Customer Service
Due to the speed with which the service reps could follow up on customer requests, International Paper clearly had the edge in this area. The conclusion was that International Paper's inside sales service reps had a better command of the process and were able to retrieve information quicker.
International Paper realized that as it merged, these representatives needed to be trained on any new systems put in place.

Delivery
Tracking on-time delivery, notifying customers when shipments will be late or incomplete and assisting in managing the customer's inventory are areas where monitoring has been put into place by IP.
Since there are multiple plants that ship product, there is a need to address the on-time delivery issue. International Paper developed a consistent measurement tool and process for all the plants. The key to effective measurement is implementing a system whereby the plants monitor their success factors the same way as the customer.
International Paper's Bleached Board Division sees the benefits of having a strong relationship with customers, listening to their needs and acting upon them. Implementing effective partnerships with customers has enhanced company growth. The initiatives the company has put into place, along with creative designs, flexible processes, and constant attention to quality and customer service, underlie a significant increase in productivity since 1992. In the future, as the industry evolves, the IP Bleached Board Division plans to continue surveying customers to stay abreast of their needs and expectations. The new organization is looking forward to prosperous years ahead, with customers at the helm directing change and growth. So keep this in mind - because it could happen to you.