Baker Hughes Stockholders Approve Combination with GE Oil & Gas. The transaction is expected to close on July 3rd.
It was around a year ago when I submitted my resignation at Baker Hughes to pursue an MBA degree. A decision I took, partly because I always wanted to learn more about business and partly because of the downturn in the oil industry. It was a tough decision leaving Baker that had been my only employer since I graduated back in 2011. As I moved on a roller coaster ride of pursuing an MBA degree at IESE, I learned more about how successful organizations not only create shareholder value but also create a sense of belonging for their employees. The culture they create needs to be preserved as companies look for growth through mergers and acquisitions.
In 2014, Martin Craighead, CEO BHI, in his email to all employees informed us about a potential takeover by Halliburton. The email was diplomatically drafted in a way which reflected that this was the best deal Baker could have. However, over 40,000 employees across 150 odd countries felt devastated. This felt like an unholy marriage of two cultures which were different in many senses. The fear of changing from Blue (Baker Hughes Coveralls) to Red (Halliburton Coveralls) was as demotivating as it could be for a defeated army forced to switch its dress to enemy’s, enemy it was fighting against forever.
During the period many managers left the company as they could never accept working for Halliburton as their employer. Baker was already shaking. During this period whenever DoJ pushed integration team in all directions, I believe the majority of employees from all religions prayed that DoJ rejects the deal. Every time DoJ extended the decision, beer cans opened on the ground and the Baker family came closer. This was the first time I felt how much an employer can mean to its employees. As DoJ rejected the deal there was a sigh of relief, I guess, from CEO to the last person at Baker, as many of us knew it would have been disastrous for Baker Hughes, its employees and it would have gone down as one of that 70% of all M&A that fail.
GE came closer to acquiring Baker Hughes over the next few months. There was a stark difference this time in how the employees felt about the move. It was more of a feeling of having found someone who finds worth in you rather than tries to rule you over. GE’s decision of naming the new company as Baker Hughes a GE Company did hit the right note from the beginning. Baker is culturally closer to GE than to Halliburton and GE recognizes that. The collaborative, employee oriented and being true to its customer culture resonate amongst the two companies. I believe GE with its history of successfully integrating acquired companies has a higher chance to gain synergies through this acquisition than Halliburton had. I hope Lorenzo Simonelli with Martin Craighead would enable a smooth and seamless transition of Baker Hughes to “BH a GE company”.
What this leaves me with is a message that has been further stemmed by IESE’s culture, a message that it is important to move out of excel sheets, power points and think about people in any business decision. Forecast and Strategy are valuable but the human aspect should be given equal importance.
P.S. This article is not to suggest or speak bad about any company but how differences in companies’ culture impact its employees throughout the pyramid.
Originally published on LinkedIn, Jul 2, 2017.