Gaurav Malik (Philips Lighting): “The way to success is to always keep the rationale for a spin-off central to its design”

Leaders League. What are the key factors of success for post-merger integration (PMI)?

Gaurav Malik. PMI requires careful planning, people management and flexibility in the process. A comprehensive detailed Integration plan along with strict project management is essential to the success of the Integration. People management is always a key factor in the success of the Integration. The acquired team must be treated with respect and need to be handled carefully as they settle into the new environment. The third factor is flexibility which may seem contradictory to the first one. Initial Integration plans are invariably based on limited understanding. Further quite often Integration runs over 18-36 months and the external environment can change. The PMI process must have flexibility to change the plans as if required by evolving understanding as well as to react quickly to external.

Leaders League. Based on your experience, what are the main challenges to companies in Asian countries?

G. M. Having worked across India and China in both local and European companies, I feel the biggest challenge is recognizing and managing the cultural differences. Companies from western countries need to take into consideration the unique cultures of Asian countries such as China and India. As a simple example, a flat hierarchy is taken as given in the west but Asian companies are very often highly hierarchical which requires tactful handling. . Another challenge that companies often do not take into account are regulations and standards. In Asian countries like China and India, these are not always as evolved as in Europe and North America, and are even absent sometimes, and many local companies are not always compliant, which becomes a particular challenge in M&A as well. Companies must learn to adapt to this different regulatory environment and apply local standards instead of global standards.

Leaders League. HP’s CEO Meg Whitman once said: “If you try to hive a division off, it’s really hard because you almost have to recreate the whole thing.” What do you think?

G. M. I would agree. A hive-off or split situation is indeed like creating a new company and gives you the chance to create a new structure from the ground up in the way you want, at the same time unlike a startup you have to also cater to the expectations of stake holders like customers, employees and shareholders which makes it quite complex. I think the way to succeed is to always keep the rationale for the spin-off central to the thinking and to create a structure around it.

Leaders League. What is the main difference in your transition from a technical position to a financial role?

G. M. I started my career as a software engineer in India and the UK before proceeding on a sabbatical to pursue a MBA at Indian School of Business. Returning from the MBA, I proceeded to take up positions across corporate M&A, finance, strategy and integration. I feel that my technical role taught me quite a few valuable skills which equipped me to transition successfully to my financial roles. Project management elements are essentially the same in both roles. Developing a financial model is essentially like designing and writing a software algorithm. Having been a software engineer also gave a deep understanding of business models when it came to my first M&A role which was in IT.

Jeanne Yizhen Yin