The big story this week is the $34B buyout by Halliburton Company of rival drilling company Baker Hughes Inc. There are still regulatory hurdles to cross and shareholders to persuade, but if the deal passes, what will be some of the implications for the company?
Well, for starters, its combined workforce will be a major challenge to manage. Halliburton states on its website that is has approximately 80,000 employees world-wide; Baker Hughes has more than 59,000. With a merged employee population of 139,000 spread out in more than 80 countries, the super-charged organization will dominate an already extremely competitive industry, offering hydraulic fracturing and oil field services.
How can one person manage such a large number of employees? Naturally, there is little doubt that post-merger, the number of employees will retract, due to elimination of duplicated departments and the scaling back of more expensive and riskier, less desirable, ventures. However, even if a fifth of the combined workforce is terminated, that still leaves an enormous number of employees to be led and managed. That's a tremendous accountability for one individual.
In my experience, the key insights for a CEO heading a large workforce are:
1. Understanding that they have more, not fewer people to manage;
2. Realizing that they are accountable for everything; and
3. Appreciating that they need to manage, and not lead, more.
It's a whole different ballgame when one commands such a large employee population. It's the CEO's accountability to maximize the productivity of each and everyone of their employees.
