Managing a Mega-Merger

Summary

Fred Hassan talks about managing a mega merger.

"This company was looking at a big cash burn, and something had to be done about it very quickly."  Fred Hassan, the Final CEO of Schering-Plough talks about the logistics of managing mergers and acquisitions.

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Fred Hassan

Fred Hassan is the former chairman and chief executive officer of Schering-Plough Corporation. Prior to his arrival at Schering-Plough in April 2003, Hassan was chairman and chief executive officer of Pharmacia Corporation. He received a bachelor's degree in chemical engineering from the Imperial College of Science and Technology at the University of London and an M.B.A. from Harvard Business School.Fred Hassan's Wikipedia entry.

Fred Hassan

Fred:      

There were several things for the mega merger that needed to be done right away and it was so you couldn’t do things in sequence; you had to do things at the same time.  So there were the immediate issues of managing a merger such as the regulatory challenges and the legal challenges that the company was under. 

But the mega merger was also under a financial challenge in the sense that the major businesses were going down.  And part of that financial challenge was something I did not know about before I got there, and that was a cash flow challenge.  That is something which is not seen very often in pharmaceutical companies.  But this company was looking at a big cash burn, and something had to be done about it very quickly.

Jonathan:               

Okay.  And so I suppose what did you go – how did you meet that challenge?  How did you overcome that?

Fred:      

So I set up a merger roadmap as quickly as I could.  I had to move forward with imperfect data, and that’s where experience and insights helps.  I anchored it with the board.  I anchored it with the shareholders at our general meeting, which occurred a few days after I came.  This was the annual meeting of the company.  And I anchored it with the entire company in a global town hall. 

All this happened in the first week I got there.  So from top to bottom, people understood the roadmap.  It was a very simple roadmap of five different phases.  And also it showed that we had a problem, we had to do a lot of work, but we had to break the problem down into bite-size pieces that we could deal with, and we still had to look forward to a period when there was gonna be a lot of good hope for the company. 

If people can see the hope – the light at the end of the tunnel, then they do build up that sense of purpose that I was trying to build.

Jonathan:               

What would you say your leadership qualities enable you to lead teams through adversity and managing a mega merger?

Fred:      

Perhaps the biggest quality that I try to work on is a sense of humility, because if one keeps balance in one’s life and a sense of humility, then one becomes a better listener.  You stay in tune with yourself, with your environment.  You listen better, and if you can anchor yourself well with your environment, then you can design a strategy to bring about change.  So it always begins with a sense of humility. 

Then also there is a sense of urgency.  Once you’ve built up a sense of direction in terms of where your mega merger is going, you have to build up a sense of urgency.  And if you can show that you can generate energy inside yourself and generate energy around you, the whole system starts to generate energy around that sense of direction, and then one gets about doing some very purposeful things.