Utz-Hellmuth Felcht, chairman of Degussa, the world’s largest specialty-chemical company, has had a lot of practice at it. He deals with mergers in two main ways: Speed and trust.
- Speed. Felcht has lived through enough mergers to know that hauling in outsiders to laboriously interview six candidates for every director’s job will leave you with a lot of weary, disgruntled people. His preference is speed. By acting quickly, you take away fear.
Felcht illustrates his point with a riddle called Five Frogs and a Log. It goes like this: “Five frogs are sitting on a log and three decide to jump. How many remain on the log?” The answer is five, because deciding to do something doesn’t mean you’ll actually do it.
During his latest merger, Felcht brought together his four-person board —each from a different company in the merger—and they filled the top 80 positions in less than two days. How’d they do it?
- Trust. The board members sat in a living room facing each other and ran down the list, asking who had a good controller, customer service director and so on. They filled the positions based completely on trusting one another’s judgment, figuring that if some of the people didn’t work out, they’d just deal with it down the road.
Felcht describes his philosophy this way: People don’t have to earn his trust; he trusts everybody implicitly.
Felcht may grow disappointed if the person doesn’t prove worthy, but mistrust from the outset means you’re constantly worrying whether you can rely on people. Felcht would rather believe in them.