How Washington Mutual Smooths AcquisitionsBy Kim S. Nash | Posted 2002-09-15 Email Print
When Washington Mutual acquires another bank, there is no question about whose technology will prevail. But the clear expectation-setting seems to inspire loyalty, not resentment.
Banks are notorious for poorly integrating the companies they acquire. The problems go beyond charging new transaction fees or startling customers with redesigned monthly statements. Customers get mad when they're forced to change the way they make deposits or when familiar options on the automated teller machines are switched around. Often, a political squabble about technology underlies the problems.
It doesn't have to be that way.
Washington Mutual in Seattle is widely regarded as one bank that does integration right. It has grown to $275 billion in assets mainly by buying other companies32 mortgage houses, full-service banks and savings-and-loans since 1983. And it has a consistent framework for dealing with the information-systems part of the acquisitionsit deconstructs them into three elements: technology, processes and people. To control two of those variables, the bank moves all acquirees to Washington Mutual's technology and processes. Doing so means typical integrations take nine months or less, avoiding long debate on which systems will stay or go.
Then Washington Mutual concentrates on the people. How an acquiring company treats the people it's firing, hiring and, most importantly, asking to stay until the merger is done can make or break the critical technology conversion.
Employees on both sides of any Washington Mutual deal know that an entire suite of applications is going to diewhich could leave the staff who had managed them pretty anxious. Creeping doubt about the future of career and paycheck doesn't inspire you to do your best work. But Washington Mutual tries to address that early on.