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CASE STUDIES: Whirlpool Ultimate Software Wells Fargo (PDF) Lucent Service & Sales Lucent HR PeopleSoft Callisma Professional Services Accounting Firm Cal Fed

Tools In Action

	California Federal Bank Merger at a Glance Client California Federal Bank (Cal Fed) Goals Achieve rapid bank conversion goals while simultaneously enhance product offerings to adapt to Glendale’s existing product line Provide excellent communication among departments and both banks during the merger Efficiently serve customers while maintaining employee morale and meeting commitments for bank deadlines during the conversion Processes and Tools Advance Consulting, Inc.’s Workshop tools to include: The creation of Team Work Agreements The four-step Consultative Process The use of PLOT analysis and Expertise statements Results Measurable goals met to include: Uninterrupted customer access Minimal ATM downtime No interruption in card access Check replacement kits mailed by target date Retain 93% of Glendale’s customer base Normalize branch and back office operations within three months of the merger Improve employee retention No major delays or budget issues Increase interdepartmental efficiency and sense of community		Bank mergers are commonplace events these days. Unfortunately, so are the accompanying disruptions in operations. Yet, by employing a collaborative approach in which internal and inter-bank departments partner to work consultatively, these disruptions can successfully be avoided. An example of one such merger that employed this approach with excellent results was that between California Federal Bank (Cal Fed) and Glendale Bank. "Let's Do It Right This Time" In 1997, First Nationwide Bank merged with Cal Fed, assuming the latter's name. While in many ways the merger was a success, several preventable issues did arise that negatively impacted customers, employees, and the company. So when the next merger came along with Glendale Federal, Senior Vice President of Consumer Operations, Pris Imlay, was determined that the merger and other key bank initiatives be handled better. Specifically, she was interested in getting her management team trained in working consultatively with each other across functional areas, as well as with external clients and the Glendale team. The result, she hoped, would be improved communication and a smoother conversion process. Employed Advance Consulting was called in to conduct training with cross-functional teams in how to partner with each other and work consultatively. In Advance Consulting's Workshop, managers learned the specific techniques and approaches that could allow them to work as business partners and consultants to each other, versus each area independently working in a vacuum. Participants in the training included mid-level and senior managers from marketing, information technology, operations, and individual branches. Building a Team Structure That Facilitates Communication Following the workshop, Ms. Imlay and Cal Fed management realized the critical importance of creating a team structure that would facilitate sharing the responsibility and ownership of the merger projects internally and with Glendale. A Core Team was developed to set goals and communicate significant information to all levels of management and to "Sub Teams." Sub Teams included an Integration Team, a Data Conversion Team and several teams representing key operational units within the bank. These teams were responsible for the detailed tasks of the merger and for ensuring the conversion goals were met. This unique team structure became the backbone for successful merger activities. The Core Team was able to easily monitor the status of critical merger milestones and was a forum for resolving major issues that arose along the way. Insights and information were consistently and clearly communicated throughout the merger process. Work Agreements Can Clarify Roles, Improve Participation In several steps within Cal Fed's merger process, teams created work agreements, a concept introduced in Advance Consulting's Workshop. Team members worked together to decide who would do what, how different members would interact, and what would be their specific timetable and milestones. As a result, all those involved had a clear idea of the roles, responsibilities, processes, and resources needed to achieve specific goals. They knew what they were supposed to do and how, and consequently had a greater stake in the project. Creating Solutions Out of Past Problems To come up with their goals and measures of success, the teams first examined problematical issues that arose in the last merger and generated ideas for avoiding these problems this time around.

	Issue		Solution
	Functional areas were only focused on their specific outcomes which resulted in duplicated effort, rework and customer complaints		To increase awareness in the need for partnering, training with internal groups was done before the merger, to avoid the gaps that might develop in the frenzy.
	Lack of communication of common goals and measures for success--up, down, and across the company		Design team structure specifically to facilitate communication. Using Advance Consulting's approach, develop detailed communication plans and work agreements for better internal partnering with all groups.
	Missed deadlines resulted in delayed delivery of products to customers and increased volume of calls requiring customer service.		Create conversion goals to ensure deadlines are met and to minimize negative impact on the customer.
	Products for the acquired bank were not fully operational during the conversion.		Create project goals to determine what is required for the startup of the new bank--projects that wouldn't have been implemented otherwise.
	Employees overwhelmed and burned out, with many experiencing decreased morale and low productivity.		Employing Advance Consulting's model, create a new work agreement at the operational and individual levels, thus enabling unit managers to plan better and ensuring that employees feel less overloaded. The result: improved morale and increased employee retention figures.
	Post-merger volumes were greater than anticipated and resulted in longer response time in service and in some cases regulatory compliance errors.		Sponsor an "Attack the Spike" contest. Each team to submit a plan for how they will be prepared to handle volume increases and return to "business as usual" as soon as possible.

			Formulating Merger Goals Drawing from the Consultative Process model, Cal Fed's teams were aware that of the dozens of merger goals that they would create on the organizational, operational and individual levels, all should contribute to the following: Ensuring the project keeps on track; Employees' feeling ownership and involvement in the merger; Integrated communication within the bank, with vendors, and with Glendale; Maintenance of usual business activities; and Successful fulfillment of customer expectations. To further collaboration and communication, each team created their own definition of "merger success" and developed work agreements to clarify everyone's duties regarding specific objectives. Merger goals were published and key objectives were displayed prominently throughout the bank.
			Steps Toward Success With the skills in creating partnerships, trust, and mutual understanding gained in workshop, Cal Fed took purposeful actions toward a successful merger. These included the following: Cal Fed made sure their focus stayed on the "big picture." They set measurable goals and communicated them between teams and levels of management. The Core Team collected and distributed updates of project plans and monitored major milestones, communicating goals and major achievements to all team members each week. Posters for some departments listed major milestones and target dates. When dates were met, the posters were decorated with stars. As a result, people felt that they were part of the process, which helped to create a team atmosphere and maintain momentum. They worked to gain the trust of the Information Technology group in particular. In the previous merger, there was little open discussion about how much work needed to be done. This time, people talked openly about helping each other. They recognized there was a lot to do and that they needed to work together to get it done. They looked for ways to merge the Cal Fed culture with that of Glendale. For example, Glendale had occasionally missed a conversion date, while Cal Fed had never missed a date. This created conflict when the teams tried to outline contingency plans. In order to make progress, Cal Fed project managers needed to find a way to win Glendale's trust on the contingency issues. Using tools such as Advance Consulting's PLOT (Personality, Language, Opinion/Frame of Reference, Task Approach) analysis, they worked to discover Glendale's motivations and approaches, and then acknowledge their differences to make them visible. Only then, working together, could the two cultures develop a modified plan as a common goal. They worked to form successful partnerships with vendors by integrating vendors in the project teams. To solve problems with missed delivery dates, they set up personal meetings in which they communicated with vendor's senior management, saying, "What do you need from us?" Then work agreements were created and vendors were involved in team meetings. The result was full and effective cooperation from all vendors. Getting Results What Cal Fed's managers learned in workshop led to measurable success in their merger with Glendale. Some of the tangible measures that demonstrate the effectiveness of their efforts include the following: Uninterrupted customer access. In the previous merger, 25% -30% of callers to the Call Center gave up before their calls were answered. The goal this time was an abandon rate of less than 10%. The result was 2%. The goal for the average speed of answer was 30 seconds and they achieved an average of 28 seconds. These results were even more remarkable given that a new Call Center had been created in Southern California during the Glendale merger. Minimal ATM downtime. The goal was to have the ATMs up 98% of the time, with no more than 2 1/2 hours of downtime during the actual conversion. The result was better than 99%. No interruption in card access. In the last merger, the vendor mailed the new ATM cards late, so there was one full week when many customers did not have their new card. This time, 100% of new cards were mailed to Glendale customers well in advance of the old cards' shutdown. Check replacement kits mailed by target date. The result was 100%. Retain 93% of Glendale's customer base. Currently, more than 95% of Glendale's customer base has been retained. Normalize branch and back office operations within three months of the merger. Within six weeks of the conversion, 75% of branch operations were normalized. Many back office departments were normalized within 60 days. Improve employee retention. The goal was to retain 85% of Glendale's branch employees while also maintaining Cal Fed's retention rate. The current retention rate for the combined bank is 98%. No major delays or budget issues. The merger activities all occurred on time, within budget. Increase interdepartmental efficiency and sense of community. All levels of the bank were involved in the success of the merger. Continued Success One beneficial side-effect of Cal Fed-Glendale merger is that the process of planning and discussing how to pull off a successful merger has resulted in improved day-to-day communications. Summing up is a quote from Pamela White, First Vice President, Electronic Banking, of Cal Fed Bank, "We continue to use the tools and techniques we learned from the training in our on-going projects. The introduction of these techniques to our organization has created a pervasive change in the way we interact and communicate with each other. We are a more effective organization for having implemented the partnering methodology."
	CASE STUDIES: Whirlpool Ultimate Software Wells Fargo (PDF) Lucent Service & Sales Lucent HR PeopleSoft Callisma Professional Services Accounting Firm Cal Fed