The CEO to CEO podcast is hosted by Kevin Campbell, CEO of Syniti.
On this week's podcast, we sit down with Paula Tolliver, former Corporate Vice President and CIO and CDO of Intel Corporation and former Corporate Vice President of Business Services and CIO at the Dow Chemical Company. Paula is instrumental in a number of key mergers, acquisitions, and divestitures at Intel and Dow Chemical, including the $15.3 billion acquisition of Mobileye by Intel and the $15 billion acquisition of Rohm and Haas by Dow Chemical.
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Kevin Campbell (01:22):
Welcome to today's CEO to CEO podcast. Today I'm fortunate to have with me Paula Tolliver. Paula is a industry famous CIO, CDO. Paula spent a good part of her career at Dow and then spent quite a few years at Intel also. She's now enjoying doing some different things, include sitting on some boards and being on some advisory committees. So Paula, welcome.
Paula Tolliver (01:55):
Kevin Campbell (01:57):
Maybe we start off, why don't we talk about how many acquisitions and divestitures, if you look back, how many have you done over your career?
Paula Tolliver (02:05):
I would probably say too many, but it's in north of 50. And if you would include joint ventures in that, it's approaching 70.
Kevin Campbell (02:18):
Wow. That's a lot. And I'm sure you've got lots of fond memories and lots of scars leftover from that. How about, is there one that sticks out relative to its complexity or a timeframe that made it memorable?
Paula Tolliver (02:37):
I've done very small acquisitions or mergers and even joint ventures in the hundreds of millions of ranges, all the way up to the multi-billion dollar ranges. And no matter what the size is, they all take the same general formula if you will. But I'd probably say one of the most unique ones that stands out when I reflect back on all of the portfolio that I've done, it would be the joint venture that we brought up. It was a Greenfield joint venture between Dow Chemical and Saudi Aramco, where it was the largest chemical complex built in one phase over a period of about five to eight years, which is about half the time it typically takes in those large scale builds, if you will.
And the IT work around that Greenfield was done by the Dow Chemical Group in partnership with several other vendors. But we built that from ground up and it presented some really interesting challenges just because it was on the Persian Gulf in the middle of the Saudi Arabian desert and lots of challenges. In addition to the typical challenge you would get, sand and heat aren't great for data centers. So we had to get really creative and I learned a lot during the process.
Kevin Campbell (04:07):
That sounds like it was an amazing experience. Let's start with due diligence. if you're looking at either an acquisition or divestiture, what are the things that you look for from an IT or a data perspective in that due diligence period?
Paula Tolliver (04:25):
Really what you're trying to do is size up the degree of complexity and the compatibility, really, between the company that's being merged in and how the combined company would need to run relative to its scale, et cetera. So one of the first things that you do and that I would do is to look at the landscape of applications, infrastructure, and data, and determine how complex the structure is going to be prior to in the individual companies and then what your combined strategy would be in. And you're really trying to get an understanding about how quickly you're going to be able to maneuver the integration, what your challenges are going to be, and how quickly you would be able to get some of the synergies that most of these mergers and acquisitions come with. And so a lot of really sizing up in those early phases.
Kevin Campbell (05:36):
And when it comes to data, as it relates to the due diligence period, what did you find helpful or did you develop over the years as key things to look for?
Paula Tolliver (05:49):
Yeah. So really data and in today's world is even more important than it was in those early days of mergers and acquisitions that I was doing. But I could see along that progression of years that I was doing these, that data became more and more important, partially because the data was being used a lot more in these current days. And so you're looking at how much data does the company have that's being acquired, and has the data been managed in a disciplined way? Do they have relationships of their data, metadata strategy, a metadata understanding, and how dispersed is the data? Is the data accessible and visible and served up in a way that would allow for a quick use and integration? But as with all of these mergers and acquisitions, you're trying to quickly give the business visibility of the merged company so that they're able to continue the business plans, as well as to serve the customers without a lot of issues in those early days. And so the data is really important to be able to understand, and in some way to serve up to the combined business entity.
Kevin Campbell (07:21):
That's a great focus on what data's there. One of the other big areas that's important too, always, is people, right?
Paula Tolliver (07:28):
Kevin Campbell (07:30):
Even if everything lines up perfectly, getting the people to work together is the challenge. So what did you look for when you're doing due diligence on another organization? What were you looking for in the people and the leadership?
Paula Tolliver (07:44):
Yeah. And I would say in the case of the approach to the integration, as well as the people, you first have to be very clear on what the purpose is of that merger or acquisition. And in both of the companies that I spent a lot of time at the importance of establishing upfront, is this a scale play, larger synergy play? So you're combining entities to get scale and synergies are key, or is it along that continuum to a talent acquisition and or an innovation play? So you're adding skills or augmenting your organization with capabilities that are really important in the company strategy or growth plan. In those two different content or examples, if you will, on both sides of the spectrum, some of the fundamentals are the same, but the approach can be very different.
Certainly the integration tends to be a bit looser on one side of that spectrum than the other. And you, in some cases, take a hands-off approach, more of a hands-off approach in those innovation acquisitions. A lot of those we did in my Intel days were you want those acquisitions to continue to grow, but to be acknowledge their differences and allow them to continue their growth plans while taking advantage of some of the assets and capabilities that the acquiring company has. So when it comes to people, the fundamentals are the same in that you want, first of all, the people to feel welcomed and to address the cultural integration of the two companies. And as you know, in your CEO chair, a lot of that is helping the two entities understand history and what the company principles and values have been and how those are similar, and then were there maybe differences and have that understanding as you continue to bring those entities together and establishing the new culture that's a combining of the two.
You also want to make sure that, a general principle has always been to treat people with respect and to make sure that as you know things that you share that because you don't have all the answers going into a merger, as you know. But as you share information, as you know the information, it just helps everybody be more comfortable with how the integration plan is going to work. So when it comes to people, a lot of times you're looking a very early stage in what's the location strategy for the new combined company, so what sites are going to remain, what sites are not. What options then, do employees have in that location strategy? What kind of talent are you going to need? What's important skills and capabilities that you want to make sure that you value and hold onto? And then how do you give employees the option to make choices as the company makes those decisions? So it's one of the most difficult parts of making a successful merger happen.
Kevin Campbell (11:29):
Yeah. And I think you hit on a key point, at least in my experience, which is you don't know everything when you start and being as transparent as you possibly can about what you know, and don't know, and then what you learn along the way, right?
Paula Tolliver (11:44):
Kevin Campbell (11:45):
And when things change, to make sure that you communicate, "Hey, we learned something different or based on we know today, we're going to take a little different approach, I think it's there." Because again, you're dealing with people's lives, right?
Paula Tolliver (11:45):
Kevin Campbell (12:00):
Which is a big part of this.
Paula Tolliver (12:04):
Yeah. And I think it's important to always explain why, why decisions are made. The reality is that it's not always something that's can be a personal, positive or a negative. But at least if people know why that decision has been made and there's logic behind it, everyone can can accept.
Kevin Campbell (12:27):
And so let's go back to data for a minute. When you get to the integration phase after due diligence, and you're looking at how to get the data to work together and get the power of that. What did you learn about what the keys to that integration were, or maybe also what not to do when you tried to integrate the data?
Paula Tolliver (12:49):
Yeah. I've had a little bit of experience with both of those. But one of the things that, as I got more and more of those mergers and acquisitions under my belt, the importance of, again, having visibility to the combined entity data as quickly as possible. And also, frankly, giving employees the ability to connect and collaborate with the same access, if you will, to data and information is a real key to letting that new combined entity hit the ground running and data plays an important part in that. And so one of the things that we evolved to, at least in my Dow world, was we had a very disciplined data warehouse and dashboarding capability. And we were able to feed the data warehouse for multiple entities, which give you a ability to have that visibility without actually having the systems and the applications combined, which can take a bit longer.
So that data merging and making sure that the data was accurate, relatable and frankly was in compliance with both privacy, as well as any kind of local regulations was something that very early stage you were looking at. And having the power of that data coming together in those very early stages would allow business to move a lot faster. And I've witnessed that in both, some of those examples where you had long periods, months before where those entities were still operating in their individual silos. And it's a real hindrance, frankly, to both the culture coming together, as well as the business continuity and growth, which is typically a strategic imperative to get value out of that merger.
Kevin Campbell (15:04):
Did you have any experience where data quality hindered you from getting some of the objectives that you wanted and how did you overcome that as quickly as possible?
Paula Tolliver (15:17):
Yeah, for sure. I have some really difficult examples. I'm not going to use any names, but in one of the acquisitions, it was a fairly large one, the systems landscape and the data landscape was very fragmented. And even in the early integration and due diligence phases, it became clear that there were data issues. Because when you had the businesses sitting side by side, talking about the new entity and what the cost and asset base is going to look like, what the growth plans and trajectory was going to look like, you had to have an understanding about your customers, where there was overlap, where there was potential for upside growth, et cetera.
And sitting side by side, in that particular example, one of the companies could answer questions at will and the other company was basically scribbling on pieces of paper. And so you really can understand the power of having data at your fingertips and being able to forward project and navigate much more easily when you have a well established and a culture, basically, of a more digital approach to managing the business.
Kevin Campbell (16:56):
So let's step back for a minute. And if you look over those mergers and acquisitions and you were then given advice to fellow CIOs about how do they work with their CEO to enabler their strategy. You have some thoughts on what are the important things to communicate both as you're doing due diligence and then through the process?
Paula Tolliver (17:20):
Some of it's repetitive to some of the key points that I brought out earlier. The first very fundamental aspect is what playbook are you running? So between the CEO and the CIO, and the reality is the CIO and the IT organization is the tip of the spear when you're going in and making that company and integrating that company. And until IT is able to hit their key integration milestones, research and finance and all of the other business processes and businesses are going to struggle until you're able to, from an IT standpoint, serve up the data and integration in a way that allows the entity to work together more easily. And so the point about with the CEO is, is the strategic imperative speed and integration and synergies, and or what are the trade-offs you're willing to make, given the business imperatives?
And so there's typically that trade off between those three things. And as you progress along the integration, and we got to a point in both organizations that I worked in that you've done so many of these, it's really easy to give options. If speed is imperative, here's how we would do this. May cost you a little bit more, but your trade-off is that visibility and business continuity at a much more rapid pace. So getting the playbook right, and then aligning all of the key players that are accountable for that integration and having that integration team work on a at least weekly basis informing what each other's doing. So that as you discover those things that are inevitably as surprises along the way, that you're able to course correct, and everybody is able to adjust accordingly.
Kevin Campbell (19:38):
Great advice. Let's talk a little bit about, you spent a lot of time in information security, and obviously for all the CEOs that's important today, but you've been a part of a lot of panels and task force in those areas. What advice would you give other CIOs during the integration about what's a couple of things to make sure you pay attention to relative to information security?
Paula Tolliver (20:07):
Yeah. One very fundamental and as early in the due diligence phase or subsequent phases that you're able to scan the network of the acquired company to make sure that there's no cyber infiltration or unintended visitors. It's extremely important to know that upfront before you connect networks or start to integrate. That's a fundamental one. I would tell you that more often than not, you will find activity that the company is not aware of. That's been my personal experience. Outside of that, the important thing in any situation, whether it's a new combined entity or an existing entity, is to make sure that you have a balance between and an understanding of what the risk, the cyber risk is to your company and that your capabilities and cyber policies and security policies are in alignment with that risk.
And that's very fundamental, but you'd be surprised at how many companies can articulate that and how many underestimate the risk. And particularly in today's world, you don't have to be a large high-profile entity to be a target. And so I think it's really important to have an honest conversation about that. And then secondly, my advice would be to practice for a mitigation and recovery because inevitably, at some point in time, a breach is going to happen. And the better prepared you are for that and the confidence that you have in your ability to recover from that is probably one of the most important things that you can do.
Kevin Campbell (22:15):
So would you suggest doing a tabletop exercise or a what if exercise even before the integration actually happens? Even before day one or would you wait until day one?
Paula Tolliver (22:30):
Well, I would hope that at least the acquiring entity, and I was mostly on the acquiring side, but that the acquiring entity and maybe even that entity that's being acquired in the merge have already had those practices in place. So the important thing is to make sure that everybody's aware of the enterprise risk management process, and then also what the procedures are if there is a cyber attack and as quickly as possible. You at least have your security groups that are working together, merging your policies and processes. And then at least in the first 60 to 90 days, you are combining and distributing and making the risk management entities of the combined companies get aligned. And you run a tabletop exercise as quickly as you can in your integration timeline.
Kevin Campbell (23:46):
Terrific. Looking back on all those 70 or so mergers and acquisitions, is there anything that you'd say, "I'd never do that again," or, "I would really spend a lot of time trying to avoid doing that again, unless I was forced?"
Paula Tolliver (24:02):
Yeah. I would say a couple. And I'm sure a lot of my CIO friends would share some of the pain. Proprietary systems, those are always the ones that end up surprising you. And obviously, technology has come a long way. And now with the advent of the cloud and SaaS and so forth, there's fewer of those surprises, but there's still a lot of proprietary software out there. And when you come across something that looks a little squarely, you should have that on your priority list to mitigate and get rid of as fast as you can, if it's possible. If not, obviously you're going to have to live with it and try and contain it.
But I would also say, probably one of the biggest challenges that I've ever had in that merger and acquisition space was a situation where we were merging together two companies and then spinning out three more homogeneous companies. And in that process, it was very difficult because it was like announcing a divorce before you even get married. And the decision-making during that merge phase, before you got to the spin phase, was really difficult. Because you needed to get synergies in that merge phase, but there was really no entity that was the sole decision maker, it was all around consensus. And I've had enough experiences in my time that getting consensus between two very proud companies, very difficult.
Kevin Campbell (25:46):
Yeah. Often becomes in the too hard bucket or the very difficult bucket, at least.
Paula Tolliver (25:54):
Kevin Campbell (25:54):
So Paula, as we wrap up, you've had a successful career, accomplished a lot. What piece of career advice would you give to myself and to other people, or what's the best career advice you've been given?
Paula Tolliver (26:12):
I would say the best career advice that I was given early and that I lived by was to continue your professional growth throughout your career. And so never stop learning and always make time to keep your skills current and to learn new things. That allows you to have a long and valued career, and it allows you to continue to keep yourself challenged and fresh. So that was something that I was given early on in my career and it served me well. What I would give personally is to be fearless and take risk. If I reflect on my own career, the biggest growth experiences that I had was when I raised my hand for an assignment or was asked to do something that I thought was well beyond my capabilities.
And even though it was a bit scary, I jumped in with both feet and I came through that and out of the backside of that with a lot more growth than I ever would have received just continuing on that general career path. So when you get the opportunity and when you can make the opportunity to take on those big challenging assignments and to diversify your career experiences, definitely do it.
Kevin Campbell (27:50):
Great advice. And somebody said to me once, if you're not taking risk, you're not growing, right?
Paula Tolliver (27:58):
Kevin Campbell (27:58):
If you're not scared, you're not growing.
Paula Tolliver (28:00):
Kevin Campbell (28:00):
So, that's a part of it. So, Paula, thank you very much for spending some time with us today. Lots of good information. So, Paula Tolliver, CIO, CDO, security expert, thanks for joining us.
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