Ask John Dame: Boundaries and expectations must be clear during acquisitions

Q: Our company made a major acquisition a year ago. The owner of the company we purchased stayed as president of his company. Additionally, he decided not to sell 100 percent of his company, and now has some ownership in the larger combined company and serves as a board member. He reports to me directly. The problem is that, over a year later, he is putting up roadblocks and fighting the integration process we agreed upon at the time of the purchase of his company. This is a big problem and is getting more costly by the minute. What can I do?

A: Wow! This can be and is a serious problem. You have two separate organizations instead of one aligned company.

From our discussions, you have had several conversations with this leader where he nods and says he will fall into line, and then goes and does whatever he wants to do, including stonewalling your integration efforts. Here is how I view this issue: Your company has paid a handsome price to this gentleman for the right to run his company. He is confusing his employment with his board position, and is using that board position to bully you and your team. You are the CEO. There must be certain boundaries and non-negotiable rules that need to be clear as you purchase a company and merge it into your company.

As an employee he needs to be aligned with your overall strategy and execute it to his best ability. His performance needs to be measured based on the results of his division, as well as his “fit” into your company and its culture. I would enlist the board chairperson to work with you and put in writing the expectations that you and the company have for him. It will be impossible to produce the results you want to until you resolve this issue. This is not a negotiable item; he has to commit to the alignment of his division with the overall strategy and culture of the company.

Q: My son is the vice president of operations for our company. He is my handpicked successor. Recently, his performance has been poor, and his overall attitude is hurting our company. How should I manage my underperforming son?

A: First, I would start with an open discussion regarding your son’s performance. Possibly there is an underlying cause that is impacting his performance. Ask him if there is something wrong. I’d then let him know your assessment of his current performance and attitude.

Once you have gone on record, it is a little easier to refer to your expectations in future conversations. You are the owner and CEO. He is the COO and an integral employee. He needs to perform well for the company to grow and for any future transition of leadership to take place.

If the problem continues, I would move my son into a less critical position and see if he can get his mojo back. If not, I would look for another transition plan. There are times when family members confuse employment, ownership and their last name. I call this “owner-itus.”  It’s where family members feel entitled to act differently and receive a pass for poor performance due to family connections. My advice: Don’t let this disease hurt your company.

A CEO coach to countless business leaders, John Dame (“JD”) is an executive team consultant and leadership strategist based in Harrisburg, Pennsylvania. He founded Dame Management Strategies in 2002, serves as Vistage’s Best Practice Chair for South Central Pennsylvania, and founded JD Evolution, an annual conference that features a series of daylong events that explore critical leadership qualities. Visit his website at: johndame.com.