IDC Spotlight sponsored by Colt
June 2024
Colt and Lumen EMEA
Integration: Bringing People
Together
Chris W. Silberberg
Research Manager
EMEA Telco Insights
Colt and Lumen EMEA Integration: Bringing People
Together
Introduction
The people make the city, not the walls.
— Thucydides, 5th Century B.C.E.
This phrase is as poignant today, when considering
organizations' mergers and acquisitions (M&A), as it
was then, in reviewing the contest between the city
states of Athens and Sparta.
This is the first of three reports analyzing the
integration of Lumen EMEA into Colt and focuses
on how the organization is bringing its people
together as it moves through the integration
period.
As such, it covers core trends in enterprise business
and technology transformation, the importance of
people to enabling successful transformation, and
the impact that M&A has on people transformation.
The final section of the report reviews the steps
that Colt is taking to make the integration of the
Lumen EMEA operations as smooth as possible for
its people and, through them, its customers.
AT A GLANCE
KEY TAKEAWAYS
» Organizational transformation, whether
from M&A or through implementing new
technologies, will succeed or fail based
on how businesses support their people.
» Skills shortages are the second-ranked
risk factor identified by executives in
their technology strategies.
» Digital transformation leaders implement
organizational models that support their
people. On average, they report two
times faster revenue growth and 50%
greater uplift on customer satisfaction
and other metrics versus organizations
that are digital laggards.
» Key elements that support M&A and
technology integrations are change
management and the communication of
change.
Background
On November 2, 2023, Colt Technology Services completed the $1.8 billion acquisition of Lumen
EMEA. In practical terms, this involved the acquisition of:
•
•
•
•
•
1,300 employees across 16 countries
1,630,031km of fiber connecting 125 European cities in 34 EMEA countries
11,000km of metropolitan network in 24 countries
12 cable landing stations in six countries
10 subsea cable systems (six transatlantic and four in Europe)
This is a major acquisition for Colt — one that significantly enhances its scale in EMEA and the
composition of its talent base, as well as providing it with additional capabilities and new product
sets with which to serve its customer base.
Colt and Lumen EMEA Integration: Bringing People Together
Pressure to Transform
The business landscape of 2024 is coping with the aftermath and ongoing effects of several
global shocks. These include the COVID-19 pandemic, the dislocation of global trade, significant
conflicts in Ukraine and the Middle East, and rising geopolitical tensions. The results of IDC’s
Enterprise Resiliency and Spending Survey, conducted worldwide every month, have shown
business sentiment remains negative: 70% of executives polled in December 2023 expect a
recession in the next 12 months. This is 1 percentage point less than executives polled 12
months before.
These shocks — in tandem with long-term trends around the digitalization of the global economy
— are placing acute pressure on leaders to transform their organizations to stay connected to
their customers and to increase business resiliency. At the same time, these forces are creating
significant challenges for leaders on their transformation road map (Figure 1).
Figure 1. Risk Factors of Most Concern for Enterprise Leaders' Tech Strategies and Spending for
January–December 2024
Inflation driving up vendor pricing beyond budget
expectations
37.5%
Staffing/labor shortages preventing effective use of
technology
32.0%
Impact of recession on expected business revenue
29.6%
Not being able to get access to IT hardware due to supply
chain constraints
28.8%
0%
5%
10%
15%
20%
25%
30%
35%
40%
Source: IDC's Future Enterprise Resiliency and Spending (FERS) Survey, December 2023 (n = 881)
To manage these risks and improve business resiliency, many enterprises are simplifying their
operations and conducting M&A to increase scale in their markets. Digital transformation plays
an important role in both operational simplification and M&A integration. IDC sees executives
consistently growing investments in digital transformation to support their business strategies,
with 38% of executives planning to spend more on IT in 2024 vs. 19% planning to spend less
(IDC's FERS Survey, December 2023).
This spending is spread across a range of technologies, but a common thread is the need for a
firm connectivity foundation upon which to integrate and build further value. As such, IDC
expects businesses to spend $38 billion more on connectivity in 2027 than they did in 2023 (IDC
Telecom Services Tracker). The number of businesses that expect to have extensive connectivity
capabilities will more than double within the same period (IDC's Future of Connectivity Survey,
2023). Business leaders are not investing in technology alone. They require a solid people base to
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Colt and Lumen EMEA Integration: Bringing People Together
implement and realize the benefits, as technology investments will deliver minimal return on
investment without a knowledgeable, empowered, and engaged workforce.
The Importance of People to Transformation
Transformation, whether it stems from M&A or from implementing new technologies, will
succeed or fail based on how an organization supports its people to transform. No tool is useful
without someone to wield it. The user must understand why the tool is needed, how it is used,
what it does, and where and when to use it for maximum value. Often, managing the people part
of transformation initiatives is the hardest, which has contributed to the development of the
management consultancy industry.
A company's organizational model is a key component of IDC’s annual Digital Executive
Sentiment Survey, which supports the analysis of progress on enterprise digital transformation.
The organizational model of digitally leading businesses provides an integrated technology
architecture and IT strategy to support the engagement, retention, and acquisition of employees
to fulfill a business' talent needs. This support for people — coupled with leadership in data and
AI, operational processes, and digital business models — enables digital leaders to significantly
outperform digital laggards.
According to IDC survey data, EMEA digital leaders, on average, achieved the following
improvements in 2023 vs. the slowest to adopt digital business models:
•
•
•
•
Fourfold greater cost savings
Twofold faster revenue growth
Twofold faster time to market
A 50% uplift in customer satisfaction
People determine both the outcomes and success of transformation and the pace of it. Digital
skills in AI, cloud, cybersecurity, data science, and software development are needed in growing
numbers in all business verticals. IDC calculated in 2022 that, without access to the right mix of
digital skills, the average digital project is delayed by eight months. Underlining the importance
of access to the right talent, executives identified skills shortages as the second greatest risk
factor for their technology strategies in IDC's FERS Survey of December 2023.
To overcome these skill challenges, enterprises are pursuing a mix of strategies, including:
•
•
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Acquiring critical skillsets through aggressive talent acquisition practices and salary
increases
Targeted M&A of competitors, start-ups, or adjacent businesses with the skillsets that the
company needs to thrive
Internal upskilling and retention programs to retain existing skillsets and migrate talent
from business areas with lower skill deficits to those facing skills recruitment pressures
Greater reliance on partners to provide and maintain capabilities that organizations
cannot staff and build in house within the timeframes required
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Colt and Lumen EMEA Integration: Bringing People Together
These strategies are not mutually exclusive, with businesses adopting a multifaceted approach to
overcoming skills shortages. Of these, M&A can provide the most significant increase in the
immediate availability of talent and resources with which a business can fulfill its talent and
transformation needs, but it also introduces its own challenges to retaining that talent and
delivering on digital transformation.
The Impact of M&A on People Transformation
Within the expansive field of transformation, M&A activity can lead to the most significant
changes for organizations, especially where it impacts the core of a business affecting its
products, processes, customers, and of course people. It is a time of significant uncertainty for
employees, customers, and partners as the systems, processes, and organizational structures of
different business elements are integrated. Businesses undergoing these integrations tend to
see short- to medium-term increases in employee churn as roles are reduced in business overlap
areas. Individuals can feel they do not identify with the new business, or they become exhausted
by the ongoing need to change and iterate the organization.
Though often a time of uncertainty, an M&A change is not, in and of itself, negative. Most deals
have a significant positive rationale concerning how the organizations coming together can
better support their customers — such as through increased product ranges and capabilities
that neither of the pre-merged entities were able to completely address on their own. For
individuals, the change effects of M&A activities offer new opportunities to reskill, experience
additional parts of the combined business, and be exposed to different ways of working from the
merging employee bases.
Key elements that make or break integrations are change management and the communication
of change. The more transparent the integrating company is with its employees and customers,
the more it can regulate the uncertainty the integration creates, even at times when there are no
complete answers. Communication should be two ways, with regular feedback loops, which help
make the integration better for stakeholders and give them a sense of ownership, making it
easier to support the changes taking place and improve the integration's implementation.
Colt Profile
Colt Technology Services was founded in 1992 and has since gone on to build a global
networking business across four continents. Colt's mission statement is to put the power of the
digital universe in the hands of its customers. With Colt's more than 6,000 people, it connects
over 27,000 customers through the network across more than 40 countries, 230 cities, 1,100
datacenters, and 32,000 buildings.
Colt heavily emphasizes its people-first culture, which is baked into its values and its business
approach. Colt's first step in the integration of Lumen EMEA is to unite the people of the merging
entities. Colt has gained 1,300 employees across 16 countries, equivalent to approximately 25%
of their pre-acquisition staff. This is a diverse and distributed workforce, with a mix of expertise,
some of which overlaps with pre-existing Colt experience in networks and enterprise services,
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Colt and Lumen EMEA Integration: Bringing People Together
such as SD-WAN, as well as some areas like submarine cable networks, where Colt previously
had limited expertise.
Colt took several steps before the legal day one of the acquisition of Lumen EMEA to support the
integration. These included:
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•
Culture assessment with Colt employees: Colt utilized an employee assessment tool
alongside interviews with a subset of employees deployed by external consultants to
provide an independent view on its cultural strengths and challenges. From this
assessment, Colt scored highly, with 83 out of 100 — above global and industry averages
— indicative of a strong and healthy culture with a high level of trust and cohesion. The
insights were then used to shape the initial phase of the culture integration journey.
The design of employee day-one, week-one, and month-one experiences: Before the legal
acquisition took place, Colt developed a clear view of how the business wanted
employees to experience the integration in its opening days. This included elements like a
CEO video welcome and celebration of a major Colt milestone, a day-one gift for all
colleagues, in-person celebrations in set locations with leadership presence, and planned
surveys to generate regular feedback on the integration experience after each period.
Support for managers: Colt developed a manager toolkit and briefed managers to
prepare them for the opening phase of the integration and to support their teams
through the initial phase and onboarding process.
Countdown to Colt communications initiative: This initiative was targeted at generating a
sense of excitement for joining colleagues ahead of the integration. Similarly, for existing
colleagues, there were regular updates via communication channels and a special
acquisition podcast to keep staff informed.
The development of HR systems and an intranet welcome area ahead of day one: Colt
saw the intranet and HR systems as critical to providing clarity in early communications,
as well as an important initial channel through which to inform and engage colleagues
about the integration.
Since the acquisition of Lumen EMEA was completed, on November 2, 2023, Colt has taken the
following actions to integrate the two employee bases:
•
•
Maximizing communication: Colt has increased regular employee communications to
provide clarity for colleagues and generate employee feedback on the integration. Actions
include instituting monthly manager calls to keep all employees updated on the latest
integration developments; a single intranet area where employees can find information
on the integration; and surveys on day one, week one, and month one and after 100 days
to measure and respond to feedback on the integration.
Unified leadership and performance management: By March 2024, Colt had defined its
executive leadership and senior leadership teams. It is now defining the teams and
organization structures that will report to senior leadership. Within three months of the
acquisition, Colt has also developed a single integrated approach to performance
management.
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Colt and Lumen EMEA Integration: Bringing People Together
•
Supported personal connections: Colt ran a culture buddy program in which 1,200
employees took part, with a one-to-one ratio of Colt-to-Lumen EMEA participants. The
program received significant positive feedback, with 86% of post-program survey
respondents agreeing that participation had been valuable to them. Colt is fostering
further connection through its twice-monthly Global Connection Days, which are diarized
to make it easier for colleagues to plan meetings with purpose. It also involves a selection
of events to provide opportunities to build connections and friendships.
Challenges
Change breeds uncertainty, and uncertainty can create risks. A key impact of uncertainty related
to M&A deals is usually an uptick in employee turnover. Employees may feel they do not fit into
the new culture; they may become exhausted by the ongoing need to change and iterate the
organization; or they may find their roles are no longer required. The expertise of Colt's people is
a significant competitive advantage. This potential loss of expertise, client relationships, and
internal relationships is a significant challenge to manage, and it can have a domino effect on
client service, client and employee satisfaction, and short-to-mid-term company performance.
Colt is clearly aware of this challenge and has responded by ensuring constant, clear, and
collaborative communication throughout the integration process to minimize uncertainty for
both its employees and its customers.
Acquisitions of this scale are always complex, and the companies will take several years to fully
integrate across organizational structures, product portfolios, and IT systems. Move too rapidly
and you risk major service and operational disruption; move too slowly and you prolong the
uncertainty of the overall integration. Colt is taking a very deliberative approach to the
integration. While this has many positives for minimizing risks to service and operational
disruption, it may result in the overall integration taking longer than stakeholder groups
(employees and customers) expected. This disconnect can lead to change fatigue, diminishing
perceptions of benefits, and accentuated perceptions of challenges to the integration. To
overcome this, Colt must provide regular and clear updates on integration progress and
proactively manage stakeholder expectations around when integration milestones will be
achieved.
Conclusion
Enterprises are under pressure from many sides to transform their operations, products, and
services. They are implementing a multitude of technology and business strategies to achieve
their transformation targets, including through investments in AI, cloud, and connectivity, as well
as looking to expand their capabilities and reach through M&A. However, for these strategies to
achieve their aims, organizations must not forget the importance of people in their
transformation efforts. A company will not fully benefit from an acquisition or a new IT toolset if
its employees are not brought on board with the change. With this in mind, enterprises need to
focus on three key areas of change management:
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Colt and Lumen EMEA Integration: Bringing People Together
•
•
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Support clear communication: The more transparent the integrating company is with its
employees and customers, the more it can regulate their uncertainty during the
integration period.
Make communication a two-way street: Regular feedback loops for stakeholders will
support a sense of change ownership and give them avenues to actively support and
improve the implementation.
Plan for human factors and plan to adapt — or plan to fail: The more comprehensively
the integration plan considers human factors, the smoother the process should go.
However, expect to continuously adapt the plan in its execution phase in response to
stakeholder feedback to ensure that colleagues and customers buy into the changes and
that the implementation benefits from their expertise.
In its integration of Lumen EMEA, Colt has so far demonstrated a close adherence to these
guidelines — through its clear communication strategy, development of regular feedback
opportunities for employees, and proactive consideration of how to adapt the integration for its
employees and its customers.
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Colt and Lumen EMEA Integration: Bringing People Together
MESSAGE FROM THE SPONSOR
Our acquisition of Lumen EMEA elevates Colt to one of the world’s largest business-to-businessonly digital infrastructure companies. Customers benefit from our existing suite of award-winning
technologies featuring On Demand and SD WAN alongside an extended portfolio of new services,
including new security technologies, market-leading SASE products, and managed hosting and
professional services. We will continue to set ourselves apart through our commitment to
delivering exceptional customer experience and embedding ESG by design into all we do.
One of our values is that we know people matter. Our people are critical to our customers’
success and the success of the acquisition. In welcoming over 1,000 new "Colties" to the business,
we’re excited for the future and, most importantly, what we can deliver for our customers.
To find out more, head to www.colt.net.
About the Analyst
Chris W. Silberberg, Research Manager, EMEA Telco Insights
Chris Silberberg supports IDC's telco transformation research in EMEA, with a core focus
on telco business strategies for talent, sustainability, and structure and technology
strategies for BSS/OSS, cloud, AI/ML, and customer experience.
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About IDC
International Data Corporation (IDC) is the premier global provider of market intelligence,
advisory services, and events for the information technology, telecommunications, and
consumer technology markets.
With more than 1,300 analysts worldwide, IDC offers global, regional, and local expertise on
technology and industry opportunities and trends in over 110 countries. IDC's analysis and
insight helps IT professionals, business executives, and the investment community to make factbased technology decisions and to achieve their key business objectives.
Founded in 1964, IDC is a wholly-owned subsidiary of International Data Group (IDG, Inc.), the
world's leading tech media, data and marketing services company.
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