This is the seventh digest in a series of ongoing updates to keep you informed about progress we’re making as the new ADI and the integration of our two companies. These updates are intended to let you know what’s happening, what we’ve accomplished and what’s next.

Leader Update:

When the acquisition of Linear Technology became official in March, 2017 and we began the process of integrating our two companies, I decided to do a bit of research on corporate integration. Since corporate mergers and acquisitions are on the rise, volumes have been written on the topic of integration so there were plenty of articles, white papers, and blogs available for me to access.

Two clear themes emerged from my research:

It is going to take longer than we initially think. And it’s going to be unpleasant at times (note: those of you who attended my presentation at the ADI West Conference know I used other terminology for that second term. I’ve toned it down for a broader audience!)

Corporate marriages are rarely followed by a honeymoon phase. It’s tough right from the start and remains challenging, even in the best of cases. The most accurate description I have heard of what it’s actually like to integrate two companies is, “It’s like remodeling a house while you are living in it. . . no, actually it’s like rebuilding a plane while you are flying it.”

There are many potential outcomes when two large companies attempt to combine into one entity. The merger may fall apart or the two organizations might never truly mesh and ultimately fail to deliver on the promise that originally led to the combination. Another typical scenario is that the acquired company may get “swallowed” by the company that bought them. I personally feel lucky that ADI has focused on a “Best of Both” approach to the integration, which I think will ultimately result in a stronger ADI and a better outcome for all of us.

I think we are also lucky that the ADI and LTC cultures shared many similarities. Both companies have strong engineering-driven cultures. Being engineering-driven, we like to design and build things, and employees from both organizations seem to naturally gravitate toward solving the most difficult challenges. We both focused on finding sustainable, profitable growth and were known for our innovative, performance-driven products and technology. I think there is universal agreement that these common cultural attributes should continue to guide us as we move forward together.

At the same time, the integration process also provides an interesting inflection point in ADI’s history. We have gone through the close, become one company, and instituted a broad reorganization designed to help us move forward successfully. I think it would be a lost opportunity if we don’t take advantage of this point in time to examine other aspects of our day-to-day work and ask ourselves, “What do we do every day that adds value for ADI?”

We are not genetically engineered to do PowerPoint presentations for every meeting. Or to sit in hours of meetings for that matter. Or fill out spreadsheets. Yet these things happen every day in both organizations because we need to communicate our messages, collaborate with our peers, and measure our success.

Integration is not just about merging our manufacturing operations and technology portfolios. Topics like organizational design and cultural and administrative integration don’t come naturally to engineers and are, in fact, generally met with healthy skepticism and a certain amount of distaste. But these are nevertheless important topics, and arriving at a successful endpoint for these aspects of ADI and LTC is critical to the company’s ongoing success. Each of us needs to examine whether the way we are used to doing things remains productive, what we should change, and what we should keep.

I suspect that there may be a continuing inclination in some parts of both organizations to not fully engage in this process (a passive rebellion!) Sooner or later, ADI and its acquisitions will operate like one company regardless of whether everyone actively participates in the design of the end state. But I think we are all personally responsible for advocating for those elements of our respective cultures that we feel should be preserved. Managers, in particular, have a responsibility to encourage their teams to take part in this dialogue and be part of the collective process of deciding what the combined company should look like and how it should operate.

And here’s another point that I learned from my research: speed matters. Let’s use this inflection point as unique opportunity to look critically at our new culture (defined as “the way we do things around here”) and decide on an optimal cultural end state. And once we decide on the elements of that goal, let’s get there in the fastest way possible. Our customers and competitors won’t wait for us to get it right. To that end, there are a number of initiatives already underway across the organization to create our combined culture (see below, “Bringing Our Two Cultures Together” for more details).

There’s a new year approaching. So let’s get on with it and fully rip off the Band-Aid. It may sting a bit but in the end, it’s the only path forward.

• Substantial progress has been made on the IT integration front. We just reached the key milestone of having all U.S. Design Center locations integrated connecting the network, PCs and other components of the core IT infrastructure. As a result, 60% of legacy LTC employees now have direct access to the broader ADI network to collaborate more efficiently across the company. At this point, 100% of Sales, Design Engineers, and most Milpitas functions have been integrated. For more details, go to the November IT Integration Update
• In case you missed it: President & CEO Vincent Roche sent both legacy ADI and legacy LTC employees emails on Friday, November 10^th regarding the company’s first half FY2018 Bonus and Profit Sharing Plans. Check your email or look for printouts, where applicable.

Bringing Our Two Cultures Together

As Erik Soule, vice president, Aerospace, Defense, and RF Products mentions in his article above, “We need to each examine whether the way we are used to doing things remains productive, what we should change, and what we should keep.” This statement speaks to one critical element of the culture integration work currently underway within ADI. The other aspect of this critical work? Supporting the behaviors, such as building trust and creating an environment of open communication, that will help us all work together more effectively.

Thus, from the very start, the approach for the culture team, led by Senior Vice President and Chief Technology Officer Peter Real and supported by Jen Hoffman, director, global culture and engagement and Mairead Holland, Human Resources business partner manager for the Industrial and Healthcare group, has been to develop initiatives that are not finite projects, but rather integral to how we behave and work together on a daily basis. The ultimate goal is to create our new combined culture - together. To that end, here’s what’s been happening across the organization thus far:

Global Operations and Technology has been conducting training on the ADI Leadership Characteristics (Act with Courage, Build Great Teams, Create the Future, Drive for Excellence), as well as behaviors to support these characteristics. The Global Operations team is sharing these messages throughout their own organization ensuring that many levels have access to the information and the concepts are being widely communicated. The next step, which will take place in mid-December, is to run a first round of testing to determine the impact within the Global Operations group. The ultimate goal is to share these messages more broadly, throughout the entire company.

The Business Units have regrouped over the past few weeks to make a number of initiatives around culture more concrete. These programs are very much a work in progress but are action-oriented in focus – to bring the legacy ADI and legacy LTC teams together. Some of the areas of work include how to impact trust and communication, as well as how to talk openly and dispel myths.

An example of a tangible initiative is the “Better Together” program, which launched in October as a pilot in the Instrumentation group. This program pairs legacy ADI and legacy LTC employees together to tackle business challenges. The key is that the work undertaken has to be value add for all individuals, dependent on their roles. Examples of what some of the pairs are working on include bringing together high level business processes to merging product portfolios. Reports out from participants thus far is that the program has been successful – and the work is of high value. There is an appetite to implement this program across other businesses and the plan is to expand this initiative in January 2018.

Whereas in the Business Units, the culture work has been focused on team integration, in the Corporate and Support Functions, the focus has been around building trust and ensuring open communication. These teams have focused their efforts on transparency of communication and learning and leveraging from their combined strengths. Additionally, some of the groups have repurposed resources to better support our LTC colleagues, with Kelsey Anderson moving from Wilmington to Camas, Winnie Escosora moving to Pengang and Claire Rollor on a short-term assignment in Milpitas.

The Sales organization has a number of initiatives underway, including discussions about our combined customer base and what to do with the Global and Key (G&K) customers, as well as aligning on a pricing strategy. A significant commitment to the combined culture is the Global Sales Conference, which will be held in California in mid-December. While not specifically a culture integration initiative, the conference is designed to build trust among ADI and LTC employees and help colleagues make connections and identify the best of both.

As the culture work continues to progress, updates will be shared with all employees. Watch for stories on this Integration Microsite as well as the employee Intranet, The Circuit, about the cross-pollination of legacy ADI and legacy LTC employees through the “Better Together” program.