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Lessons Learned

Thursday, February 1, 2007
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Among the "lessons learned" from Exelon Corp.'s previous merger with Philadelphia-based PECO Energy and its unsuccessful attempted merger with Public Service Energy & Gas were the following:

Establish Clear Roles and Responsibilities: A key lesson learned from the previous merger, says S. Gary Snodgrass, Exelon's executive vice president and chief human resource officer, was the need to clearly define the roles and responsibilities of each member on the various merger integration teams early on in the process to avoid confusion and overlap.

"We didn't pay enough attention to this during the PECO merger, and we didn't want to make the same mistake again," Snodgrass says.

Culture Matters: Another lesson learned from the PECO merger was the need to pay attention at the outset to the differing cultures between the two organizations. This was not a priority during the PECO merger, and Snodgrass says the merger process was not as smooth as a result.

Early on in the PSEG merger, Exelon conducted a comprehensive survey of its own employees and PSEG's employees to identify potential "pockets of resistance" to the merger. One of the key points that emerged was that PSEG employees were concerned their firm's long and proud history would be eclipsed in the merged organization.

As a result, Snodgrass and his team devoted a great deal of time to meeting with PSEG employees and addressing their concerns. They also made a point of treating the merger as "a merger of equals," even though Exelon would be acquiring PSEG.

Address the "Me Issues" Promptly: Employees want to know right away how a merger will affect their jobs, their benefits, their organization -- the so-called "me issues."

As soon as such information was available, Snodgrass and his team immediately passed it on to managers and employees in order to maintain morale and minimize uncertainty to the greatest extent possible.

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This was done both during the attempted PSEG merger and in the aftermath (through venues such as group meetings and Exelon's merger-related electronic newsletter, "Eye on Integration"), when employees wanted to know the status of jobs and assignments that had been predicated on a new, merged organization.

Succession Planning: It Works! Despite the failed merger, Exelon uncovered some valuable information about itself during the process. A key lesson was that due to its extensive leadership development and succession planning efforts, managers were able to shift into different roles during the merger relatively easily without disrupting its business.

"We learned that having a good leadership and continuity model is very important," says Virginia Brown, Exelon's vice president for corporate leadership development.

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