Tales from integration

I’ve been involved three times when a company I work for has been acquired. I’ve sat in the conference room with my name suddenly missing from the org chart – which has been unveiled for all to see by an executive from Central Europe speaking in broken English. I’ve picked my jaw up from the floor as the new boss asks me to dream up an approach to do the same amount of work after cutting three quarters of the team. I’ve stood by and watched people withdraw and hold back tears as months of integration have brought all meaningful work to a standstill. But I’ve also been there when the new owner’s CEO has taken it upon himself to speak with his new colleagues and spend time with those who were particularly intimidated by the change. So, when the integration of Finnamyl and Lapuan Peruna began, yes – I had experience. Both good and bad.

Finnamyl, Finland’s largest potato starch producer, alongside its subsidiaries, transferred to Chemigate – and therefore also to the Berner family – on July 1, 2022. This can be seen as a continuation of Berner Group’s growth strategy.

When an acquisition is completed, the clock starts to tick the moment the digital ink starts to dry on the virtual paper. At that stage, the most important thing is to ensure continuity. In their article Special Leaders for Special Times –published in the year 2000 – Ron Ashkenas and Suzanne Francis stated that the most important window of time for successful integration is the first 100 days after the contract is signed. It has to be made clear to customers, staff and suppliers (i.e., contract farmers) that the new owner’s intentions are honourable.

While there are other reasons to purchase companies, Chemigate’s primary reason was that we believed we could develop the business we were acquiring. But this doesn’t mean we think we’re better than the company’s former management. On the contrary, the previous owners – who were also part of the management team – developed the value of the business to the point that an outside party was prepared to pay cold, hard cash for it. What Chemigate has is more tools. The Berner Group’s toolbox offers ways to create synergies that weren’t available before. Chemigate, on the other hand, has the opportunity to expand Finnamyl’s customer interface. In other words, the fact that the factories wouldn’t be closed and that the business will continue to be developed was communicated as quickly as possible to all stakeholders.

Near the end of summer, I spoke to more farmers than I had in my entire life up to that point. I got to know my new colleagues through countless meetings where we went deep into the potato starch and potato protein business – and the surprisingly complex circular economy they’ve sprouted. Getting the message to our customers was the easiest of all. A year ago, everything was in short supply at one time or another. We were able to communicate that Chemigate had secured its potato starch availability, which was met with much relief.

Crucial leaders from Finnamyl and Lapuan Peruna were transitioning into retirement. This, and of course the operational changes that the business group’s formation had caused, required the appointment of new management and a new CEO. I can’t remember what the original plan was, but it was quickly put to the side when Kalle Kainu expressed interest in the job. Kalle is perfect for it. He’s possibly the best team leader I’ve ever known. He also has an interest in agriculture – which comes, if not from his genes, at least from his mother’s milk.

The role of the new business and team leader is extremely important. Finnamyl’s outgoing CEO, Ossi Paakki, now had someone to whom he could pass that painfully elusive tacit knowledge. Now, the staff at Finnamyl and Lapuan Peruna had someone whose job it was to listen to them, and who had the guts to make changes. And Chemigate now had someone tasked with building bridges within the business group.

As if the task wasn’t difficult enough, the acquisition took place in the midst of the inflation connected to the war in Ukraine. As inflation hit the agricultural sector, already unprofitable, it caused a strong reaction among farmers throughout Europe. Of course, we had been warned about this before, so reaching a new price agreement was a top prior- ity. Nevertheless, the message from the contract farmers was so strong that I had to take a restorative drink after the meetings on a few occasions. Sorry – I meant of course that I had to run an extra half-marathon to recover from the negotiations…like a modern business leader is expected to.

But we came to an agreement on the price, just like we’ve always done before. We believe that this solution may even attract new contract farmers to join Finnamyl and Lapuan Peruna.

The first stage of the integration has already been concluded. I’m not claiming that everything went perfectly, or that all the fires have been extinguished. Internal struggles and partisanship have ruined many promising beginnings. A Harvard Business Review article from 2016 puts the failure rate between 7090 %. Among this group of failures are some real heavy hitters whose names are familiar to everyone – Microsoft, Google, etc. I hope, however, that the worst pitfalls have been avoided, and that we’ve bought some time for fine-tuning. The near future will bring new business models to both Kokemäki and Lapua. Change isn’t ever easy – and we’ll keep looking for ways to change our business that make it even better. In my opinion, it’s pointless to imagine that people will quickly change their conception of being from either Finnamyl, Chemigate, or Berner. I do hope, however, that this vision will be accompanied by a broader sense of community – one that doesn’t take us away from our roots.