Integration of Tippecanoe Laboratories
The right Resources, Competencies, Skills -A post Acquisition Integration starts
prior to signing
Thomas Ayres – VP Integration & Change Management
Krannert Executive Conference for HR Professionals
Purdue University - September 23, 2011
The nature of the transaction determines the
integration approach
Evonik’s Scope and Imperatives on
Tippecanoe’s Integration
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Integration Imperatives
 Assets
 Skills
 Knowledge
 Personal
Commitment
 Business Model
 Cultural Mindset
Utilize
Change
 Management
Systems
 Business
Processes
 Site Core Values
 Quality, Safety and
Environmental Principles
 Supply to ELI LILLY
Sustain
Tippecanoe
Laboratories
Implement
Involve
Develop
 Demanding Customers
 Flexible Workforce
and plant
 Competitiveness
 All Employees on Site
 Regional and
Global Services
 Business Unit/Line
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Eight-Step Process for Leading Successful Change
(John P. Kotter)
8 – Institutionalize
7 – Don’t Let Up
6 – Create Short Term Wins
5 – Enable Action
4 – Communicate for Buy-In
3 – Get the Vision Right
2 – Build Guiding Teams
1 – Increase Change Process Engagement
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Understanding the Challenge of Change for
the People who joined Evonik.
The Tippecanoe Perspective.
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Tippecanoe Laboratories
is embedded into a Matrix Organization …
Shared Services
Business Line
and Functional Responsibility
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Controlling & Finance
Sales & Marketing
Production & Technology
Supply Chain
Research & Development
Quality Assurance
Human Resources
Business
Unit
Business
Line
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ELI LILLY
CORPORATE
Joint Steering Team
(contractual
obligation)
Service
Units
Procurement
Communication
IT
Legal / Insurances
Financial Services
HR / payroll
IP / patents
Process Technology
& Engineering
Tippecanoe
LILLY
Laboratories
TippeLafayette
canoe
Site
Site
EVONIK
Degussa
Corporation
Integration Project Tippecanoe
(temporary support
to line functions )
Integration
Project
Team
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Compliance and Audit
ESH and Permits
Product Regulatory
Taxes
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Legal Responsibility
Understand the New Business Model
@Tippecanoe Laboratories
Self Image
Focus and Mindset
From pharma production for captive use
to Contract Manufacturing for various customers
From cost center view
to entrepreneurial acting.
Competitiveness
Not longer competitive
with ELI LILLY’s sites in Ireland or Puerto Rico,
but with Lonza, Siegfried, Hovione, BASF et al
Success Factors
Measured by customers on
cost, speed, flexibility, quality, reliability.
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The Acquisition Process of Tippecanoe
Laboratories
Key Learning Points.
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Key Learning Points
 A Solid HR Integrations of Payroll, Benefits and Policies is the
Foundation to a effective overall Integration Process.
The lack of HR related problems allow the rest of the Integration process
to progress without these issues getting in the way.
 Do not underestimate the amount of resources that are needed for
Integration (Management Capacity)
 Expect that you will need to replace some key managers, do not develop
Key Manager Contracts that are longer then 6 months. They can always
be renewed.
 Have a solid communications plan. A Plan that covers not only Day One,
but has planned and required Communications activities over the first 9
to 12 months of the integration.
 Build in the opportunity to assess the progress of the Integration Plan.
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Key Learning Points –
Change is more than a Phrase
Remember that Change
is always with us,
but it is not natural.
Change is always good
when it happens
to the other guy!
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Post Merger Integration has two Components:
1 Business System Integration
(Project Management)
2 Business Management Integration
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Business Systems Integration
Examples
 HR Pre-Closing Activities
 IT Integration
 Alignment with Corporate, Business
Unit/Line and Region on Financial and
ESH Reporting Requirements
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Business Management Integration
 Business Management Integration is about organizational
leadership.
 Moving the mindset of the Tippecanoe Leadership from being a
cost center of a large Pharma Organization to a Profit Center of a
Custom Manufacturing Organization (CMO).
 Changing the behavior of the leadership to allow for open
disagreement and the delegation of authority.
 Guiding leadership though effective utilization of networking in
Evonik’s Matrix Organizational Structure.
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Business Management Integration
versus Business Systems Integration
 Can someone who is effective at Business Management
Integration also manage Business Systems Integration?
 Probably yes but not always.
 Can someone who is effective at Business Systems Integration
also manage Business Management Integration?
 Probably no but not always.
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Competencies Business System Integration
 What are the Competencies of a good Business Systems Integration
Manager?
 Management
Excellent Organization and Project Management skills. There are
many individual projects within the overall integration and all have
to be managed effectively.
 Culture
Good understanding and sensitivity to the organizational and
regional cultures of the groups who’s Business Systems are being
integrated. The Business Systems Integration process is extremely
stressful, people involved in completing this process are doing it on
top of their regular jobs and they must be managed with “firm
sensitivity”.
 Network
Good networking skills and a good understanding of Evonik’s
Matrix organizational structure.
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Competencies relevant for
Business Management Integration

What are the Competencies of a good Business Management Integration
Manager?

Entrepreneurship
Excellent understanding of the business goals and objectives and an understanding of
the BL’s industry and competition.

Communication
Must be able to “speak to” and teach the new leadership about the business and how
the acquisition fits into the business strategy of the acquiring company.

Intercultural Skills
Must have a good understanding of both the “business/organizational” and “regional”
cultures of the acquired organization and the culture of the organization that made the
acquisition.
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Adaptability
Must be able to “coach” both the acquired leadership and the acquiring leadership to
ensure that the synergies anticipated by the acquisition are realized.
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Conclusion
 The Business Unit must lead the Business Management
Integration process.
 The Business Management Integration Manager must be a good
Business Manager!
 Business Management Integration is a long term activity, 3 to 5
years.
 Business Systems Integration should last 6 to 15 months.
Thank you for your attention!
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Questions and Discussion?
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