Tell Us, Dr. Covey: Are Mergers Habit-Forming?
I've never gone public, so I'm sure I'm going to be in for a lot of great lessons," says Stephen R. Covey, the 64-year-old best-selling author, who this past May formally merged his $100-million Covey Leadership Center with the publicly traded Franklin Quest Co., to form Franklin Covey Co., of which he is cochairman. Covey has made a fortune flinging such bons mots as "If you try to take the short-term approach, you will over the long term compromise or kill the goose that lays the golden eggs." So how can he expect to make peace with Wall Street's what-have-you-done-for-me-this-quarter mentality? To find out why Covey opted for the $160-million deal--that's $22.8 million per habit in terms of The Seven Habits of Highly Effective People--senior editor Joshua Hyatt asked Covey whether he worries that this merger won't ultimately make him even fonder of his former life as a private management guru.
Covey: Most entrepreneurs have fears that are deeply rooted, and somewhat justified, about mergers. They think emerging into the public arena will impinge on their entrepreneurial mind-set. Most don't understand the third option.
Inc.: Which is?
Covey: Synergy. It's where the whole is greater than the sum of its parts. But it can be terrifying, because you don't know where it's going to lead.
Inc.: But doesn't every modern merger announcement contain a reference to the great potential to "synergize," which happens to be your habit number six?
Covey: But when people talk about it in merger terms, they talk about obvious synergy. We have great new products in the managerial and organizational area that Franklin wants, and it has the retail distribution we want. That's transactional synergy, and it's good. But what if you can get people to be open to the creation of something far better than what either party brought to the table?
Inc.: How can you do that?
Covey: People must know that you have no hidden agendas, that you are very honest and up-front, that you believe in synergy but don't know how it will work out. "We want synergy," you say to them. "We want to create something better than what either of us has."
Inc.: And when you say that, do people actually believe you?
Covey: It takes a lot of maturity, control, and patience. You have to practice habit number five --"Seek first to understand, then to be understood"--for a long time.
Inc.: What about the other players? What about the lawyers who apply pressure to get the deal done?
Covey: That thickens the plot. Lawyers need to be trained in this. If they're really insecure, they may never achieve it. But it can be so exciting and can bond the relationship.
Inc.: How so?
Covey: Most people tend to assume that you secretly know where you want to end up. Synergy is the opposite assumption.
Inc.: If you don't really know, how do you reassure employees who might be anxious about their jobs?
Covey: By listening to one another and by having everyone participate in the development of a synergistic mission statement.
Inc.: Is it hard for you to imagine your future role? In situations like yours, a lot of founders end up doing less of what they love.
Covey: That's a big mistake. The key is to have a complementary team. Entrepreneurs don't create complementary teams. Why? They don't understand synergy. They have a need to clone themselves. I'll still focus on teaching and writing. I'll continue writing my next book; I'm working on four of them right now. Want to know how we do that?
Covey: Exactly. Very good.
Embrace those destructive habits if you want, but know this: Stephen R. Covey is going to find you one way or another. Synergy--which, like Covey himself, is "everywhere in nature"--is discussed quite succinctly in part three of his best-seller The Seven Habits of Highly Effective People: Powerful Lessons in Personal Change (Simon & Schuster, 800-223-2336, 1989, $14), where he puts the term in context (on page 263 of the paperback edition) and then explains its effect in the business world (page 267 to 269) before invoking the memory of an earlier era's guru, Timothy Leary, by promising "mind-expanding adventures." In Principle-Centered Leadership (Simon & Schuster, 800-223-2336, 1990, $14), Covey further defines the role of synergy in leadership (page 37 to 38) and in solving problems (page 242 to 243). Covey's books, as well as his organizer, his magazines, his tapes, his videos, and other products, are available from the Covey Leadership Center, which can be reached on the Internet at www.covey.com or by phone at 888-552-6839. (The number for ordering products is 888-333-3018.)
STEPHEN R. COVEY, Covey Leadership Center, 3507 N. University Ave., Suite 100, Provo, UT 84604; 888-552-6839 34