Eric Perlander, a partner inside the strategy-consulting firm Waterstone Management Group, spends most of his time advising on M&A deals. Part of his expertise stems from his role as a member of the small senior team inside IBM, which evaluated, planned and executed the acquisition and integration of PricewaterhouseCoopers Consulting. As consulting firms gear up for another wave of M&A, Consulting's One on One sat down with Perlander to better understand the lessons he learned from one of the largest, and most successful, acquisitions in the profession's history.
In this edition, we will examine the keys to the success of the acquisition. And in the next edition, Perlander will discuss the biggest challenges IBM had to overcome.
Consulting: What were some of the most important issues that made the IBM integration of PricewaterhouseCoopers Consulting so successful?
Perlander: The way IBM handled firm culture was huge. I came to IBM in 2001 as a result of the acquisition of Mainspring. With our 250 professionals, we were obviously much smaller than IBM and were essentially gobbled up. IBM took a different approach to the PwC acquisition. To IBM's credit, a number of senior leaders involved in the acquisition of PwC worked to make sure that the consulting business model of the combined firm more closely replicated what PwC had more so than what IBM had. It wasn't about assimilating the smaller firm. The goal was to keep the best of both firms. We evaluated more than 100 different business and operational differences between the firms. And despite the fact that IBM was significantly larger, I think we tended to grab the way PwC did many things, such as partner promotions. And we maintained the IBM process for many of the things that had to do with internal finances — rigor around pipeline management, financial disclosures, etc.
Consulting: What was another key to the success of the merger?
Perlander: We were also very intentional about how fast we wanted the merger to happen. Early on, we had to determine whether we wanted to go slow and try to figure it out and get it as perfect as possible before smashing it together or go very fast, and have some breakage, but get the organization operating together faster. We opted for the latter. The announcement was July 1 and we closed in September. In the last quarter of the year, we operated as side-by-side businesses as the integration was worked out. And by January 1, about 3
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