Acquire Products Not Talent, Then Gut the Org Chart

"Most American high-tech acquisitions vacuum up people with experience in fields the acquirer needs. CA, however, has never targeted talent. Charles looks instead for products to meld into CA’s software line, access to new markets, a customer base. Charles: “You look at the financials, you look at the product, you look at the sales. Then you ask, ‘How’s it all going to fit in to where we're going? How does this part make it all greater than just adding the pieces together? How do we leverage off what they’ve got or what we’ve got?’ If they have a product that I can sell through my sales force, God bless, that’s great, then I have leverage beyond what they have standing alone. If they need one piece for their product to"

"After a while, acquisitions took a predictable form: the new company’s bloated upper management was blown away, its mid- dle management was combed for potential CA types, and these were told to rank the three, five, or hundred best of their own people and dismiss the rest. Ancillary functions, like finance,"

"people and dismiss the rest. Ancillary functions, like finance, were absorbed by CA headquarters. This left the creme de la créme of the acquired company, welcomed without reservation into CA. Yet of those who took up CA’s offer, few would make the grade. The most successful were often those who had been frustrated by the acquired company’s corporate restraints; they flowered at CA. But the dropout rate of acquired employees—"

"Because CA is in the main interested only in companies with legitimate products and strong sales, the ADR tale is hardly a novelty. The same story has been repeated dozens of times in large companies acquired for hundreds of millions each—like Uccel, Cullinet, On-Line, and Pansophic—and small ones with one product generated by technical sophistication, but without a clue as to what to do with it. Reviewing these acquisitions is like fast-forwarding through a collection of early television west- erns in which an outsider is called in to bring justice to a town under seige from its own corrupt leadership. After a while you wonder that no one ever complained that it is all the same plot, sometimes even the same lines."