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Successful Integration Post Merger – a client story

Many if not most mergers and acquisitions continue to be reputed for failing to deliver their potential. This story describes how sensei contributed to a rare successful integration.
Crawford Brown, co-founder and CEO of niche biologics business Eden Biodesign, reflected with us on what influenced the successful acquisition of his business by $3.6 billion Watson Pharmaceuticals in 2010. This account illustrates the simple but challenging approach that sensei took to influence Crawford and his team and help gain them recognition for an outstanding integration at a remarkable speed.

Successful Integration Post Merger - a client story 1Founded in 2000, Eden Biodesign develops a ‘breakthrough’ class of medications and therapeutics to treat common and complex diseases where there is limited or no existing effective therapy. The acquisition of Eden Biodesign is classed apart from the more conventional reason for M&A in its industry. Traditionally, acquisition is centered on getting direct access to assets to exploit an existing business model. Today’s pharmaceutical industry is subject to continuous change. This change is associated with regulation as well as increased variation in the time horizons of product development, manufacturing and distribution. A good example is every year Watson replaces around $1 billion sales with new product development and the time horizons for development range from 6 months to 7 years.
The acquisition presented Watson Pharmaceuticals with an opportunity for expansion across new markets, helping to establish a strong foundation to participate in and take advantage of the anticipated industry growth of generic biopharmaceuticals. The acquisition has led to a change in business model, introducing the need for significant changes in the strategic agenda of the business.
To integrate effectively, Eden Biodesign learned to:

1. Harness past experience and simultaneously welcome and respond to emergent change;

2. Embrace the contributions brought by both parent and child whilst addressing and exploiting the differences as the businesses merged together;

3. Adopt the organizational framework of a multinational parent with new and formal controls without compromise to the core organisational capability it brought Watson as a small, flexible and rapidly innovating business; and

4. Tolerate ambiguity whilst accelerating progress at time scales an order of magnitude shorter than previously required.

Eden Biodesign has been awarded for the speed and quality of integration and transformation of the business model in this challenging context. A process which normally takes several years, took less than 6 months to Successful Integration Post Merger - a client story 2achieve. When asked what made this integration so rapid and sustainable, Crawford described the journey his team took with support from Sensei to develop a coherent strategic story equally meaningful to his team as it was to stakeholders across their new parent. Members of Crawford’s senior team created a strategic plan and invested time to develop the personal and organisational capability to deliver it in an initially highly uncertain environment.
What value did Sensei bring? Crawford reflected that his initial motivation for external support was to help him move the business from being a nimble venture capitalist funded consultancy and development business into one that can thrive and succeed in a large, well established global corporate parent. Crawford specifically pinpointed the capacity Sensei helped him to develop to rapidly engage with stakeholders across the parent company. He described how sensei helped him and his team to “…formulate the right questions to ask members of the business, coaching them to understand us better. Most importantly we learned to listen with skill, helping us to together get to and effectively resolve each problem we encountered.” Individual and team coaching helped the team to lead and manage effectively through a period of great uncertainty.
Eden Biodesign’s leadership team had to shift their own and their parent’s paradigm, to suite the volatile back drop of a rapidly changing industry and an acquisition under keen review by shareholders. This transformation has since earned them five awards, one of which was a merit for execution against Watson’s Core Values.
Crawford is rightfully proud of his team’s ability to break a mold of what he referred to as ‘corporate group think’ to ensure the contribution this acquisition brought to the growing Watson business was an exceptional one. The transformation we recognize with delight is how Crawford’s team learned to challenge themselves and their new family respectfully.

Client video testimonial

Samreen McGregor April 2012