Kraft-Cadbury: Making Acquisitions Work

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Finally, employees at Kraft and Cadbury most likely have preconceived notions about the other based on what they have read in the news or heard through industry chatter. It is essential that the leadership team takes the time to discuss the differences in culture sooner rather than later, so that they can focus on similarities. Our experience shows that these differences begin to pale very quickly if they can be addressed early on.

Challenge to Kraft's Leadership

To be successful, Kraft needs to have an open and honest dialogue with Cadbury. This will give people a realistic understanding of what is going to happen, allowing them to make informed decisions about future prospects. Building trust is the only way to prevent the defection of talented people. Kraft will face an immediate disadvantage if Cadbury's top talent leaves because no one knows the details of making a company successful better than those who had a role in its success.

As the acquirer, Kraft also has the responsibility to provide a detailed road map for integration. This will ensure that everyone understands the process for joining the companies, which will free up the leadership team to address hidden issues. The plan should provide guidance on the effectiveness of executives and managers, the performance of work units and processes, and the management of organizational change.

Finally, Kraft will have to unite the two companies under one vision. Communications programs that support the new vision must be planned, initiated, and sustained, and employees that support the vision should be rewarded. Executives and work units must be redeployed where they will be the most efficient. Departments will have to be restructured and processes redesigned in order to align with the new company. A system should be put in place for development of team effectiveness, so that teams are cohesive. Conflict-resolution methods must be developed to ensure quick and effective solutions, while workforce standards are sharpened and common business practices established. Adjustments to the culture should be made when necessary.

Challenge to Cadbury's Leadership

Integrating after a merger or acquisition is challenging for any organization, even under the best of circumstances. But after the deal is done, it's critical for leadership of the acquired company to publicly embrace the acquisition and show enthusiasm about the future. By focusing on the benefits of the acquisition, Cadbury executives will be better equipped to communicate the value that Kraft brings to the brand.

Senior executives at Cadbury will need to take symbolic steps to demonstrate their openness to the merger. This might be in the form of meetings, handshakes, companywide memos, public speeches, and even positive quotes about the acquisition in the media.

Ultimately, Cadbury should be proud of its accomplishments over the years. Companies become acquisition targets because they have a reached a high level of success. Executives can retain that pride while still keeping other emotions in check. One thing is for certain: There is no room for egos during the integration process.

While there are many challenges to overcome on both sides of the Kraft-Cadbury deal, strong leadership can help to smooth the process. Executives from both Kraft and Cadbury must remember that if the integration is successful, it will be a boon to both the companies, and to consumers.

Guy Beaudin is a senior partner with RHR International, an organization of management psychologists and consultants who work closely with senior executives to accelerate individual, team, and business performance.

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