XEL Communications Executive Summary

XEL Communications was founded in September of 1984 by Bill Sanko. XEL designs and manufactures more than 300 individual products that enable network operators to upgrade existing infrastructures and cost-effectively enhance the speed and functionality of their networks while reducing operating expenses and overhead costs. XEL is located in the outskirts of Denver, Colorado. Customers drive the demand for XEL products, and the company's productivity is 2 new products per month. In addition to their domestic business, products are sold in Canada, Mexico, Central and South America. The company has plans to infiltrate the Brazilian markets in the near future. The company is in the midst of the international stage of international development,
Product life-cycles are getting shorter: products used to enjoy a 30-40 year lifecycle, but now the lifecycle is only 3-5 years tops. This represents a simple, unstable dimension in the environment. The company is able to cope with this by having a horizontal, matrix style structure, with an incidence command system in place to deal with the ever-changing environment and marketplace. There is also a need for more resources to help with the rapid growth that XEL is experiencing. Profits have risen three-fold over the past three years prior to the dilemma, and the company is running out of human resources to hire in the Denver area.

The vision statement is used in all aspects of decision making and problem solving within the organization. It became a living symbol of the XEL culture and the degree to which XEL embraced and empowered its employees. This shows that the company uses a more horizontal, or organic, approach to management and decision making. Self directed work teams were achieving exceptional quality, showing that XEL has an adaptive culture to the
They retained the services of Alex Brown Investment House to help with the path choosing process. After considerable thought, the company came to the conclusion that it had three choices. It could keep things the way they were, the company could go public, offering stock to the public, or the company could choose a strategic partner. XEL chose to find a partner, and it found a partner in Gilbert Associates, out of Reading, Pennsylvania. XEL was attracted to Gilbert by three factors. One was Gilbert's long term strategy to enter the telecommunications industry. The second factor is Gilbert's intention to keep XEL as a separate, autonomous company. The third factor is that Gilbert was willing to pay $30 million in cash, instead of stock or debt. "It was a clean deal," according to Bill Sanko. According to XEL, culture, comfort and trust are more important than money in sealing the deal. Gilbert had to be a good fit for XEL. XEL is looking to become more globalized, and felt that Gilbert was a good fit in this regard. Gilbert's knowledge and relationships with RBOC's and GAI-tronics subsidiaries would help XEL establish international sales, fulfilling the company's goal of becoming more global.

The human resources systems remained in place with no changes after the partnership was formed. There was no turnover in the six week period after the acquisition. This shows that employee morale is still