Organizational changes come in all stripes and many flavors. Some changes are small, such as moving your office, which ranks at about a two on a scale of one to ten. Implementing a new accounting system ranks about a five. The changes encountered during the merger and acquisition process are, on a scale of one to ten, hovering right up there near the double digits. With the merger and acquisition comes a culture transformation and the overall sense of identity within the organization. Individuals may even be worried about their job status. A merger or acquisition is a time of uncertainty and adjustment. Clearly, it’s a time that calls for not just good leaders to guide your organization through merger and acquisition, you need a great leader.
Here are seven things great leaders do to shepherd organizations through the unique changes organizations undergo during the merger and acquisition process.
1. Decide on Your Approach to the Culture
Most M&A teams are great at thinking through the legal, financial, and operational components of a transition but what can be missed is the people who are undergoing this change asking: Will I fit? How do I fit? Do I want to fit?
These question will always be in reference to their previous experience of the culture they worked in before the merger or acquisition. As a senior leadership team you must have one of the 3 basic approaches clear in your mind.
- Transform one of the cultures to align with the other.
- Amalgamate the two cultures leveraging the strengths of each
- Create a new culture free of the stigma of either of the previous cultures
2. Create a Compelling Vision
A compelling vision will be the North Star and set the direction for the majority of actions to be taken. A vision is broad sweeping and encompasses dreams and hopes. A vision is a motivating force, though action steps must be drafted to move toward that vision. Your vision will most likely encompass the mission and the culture of your organization following the merger and acquisition.
Once the vision is clear, ensure the articulation paints a clear distinction between current reality and desired future state, especially in regards to the culture you will ask people to fit into. This will help people fill in the blanks required to answer the “fit questions” they are asking. It will also clarify the expectation of the type of things that must be different.
3. Set a Series of Goals
Goals translate the vision into reality. Reach your vision by setting, then executing, a series of sequential goals that will result in the overall vision for your company, following the merger and acquisition. When goal setting, keep in mind each goal must be:
- Specific: Goals should have a specific, deadly-accurate deadline–not a fuzzy or flexible one.
- Measurable: A well-thought out goal is one in which there is some way to measure the outcome.
- Crystal Clear: Goals should be expressed so simply and so clearly they are truly “crystal clear” to everyone. Any questions should be addressed and the goal statement clarified.
- Action-oriented: Goals describe what is to be done; they should not be expressions of intent or desire.
4. Manage the Project
Managing this transition is a lot like managing any other project. Think of it, in fact, as project management. Working back from how the merger and acquisition will look and function when fully implemented, create incremental goal steps—and a timeline for completing them—that will get your organization there.
- Get buy-in from managers and teams affected by the changes.
- Based on your goals, assign tasks to managers, departments, and teams.
- Keep managers, teams, and yourself, accountable. Hold weekly check-in meetings with managers to assess progress.
- Continue to gather feedback. Make changes to tasks or timelines if necessary.
- Take responsibility to ensure your managers and their teams meet their assigned goals.
The secret to collaboration is the willingness to listen and seek input, making sure those on the journey with you feel heard and esteemed. For clear collaboration, follow these steps:
- Listen to others’ opinions and even frustrations. The most effective solutions come out of overcoming the criticisms of those who haven’t yet bought in.
- Be willing to change tactics after getting feedback early in the process.
- Provide opportunities for team members to contribute to the discussion.
- Ensure effective dialogue around new assignments prior to them being finalized so that people work on outcomes they feel they can be successful in delivering. Nothing will erode trust more than people perceiving they are being set up to fail.
- When working with managers and team members, be willing to voice your thoughts and opinions in a proactive way.
- You become a great leader by being willing to listen to others, to give them their chance to lead the discussion while you listen quietly and incorporate feedback.
6. Engage Every Function and Level
During massive change, a significant percentage of people will default into a “victim of change” mentality and not proactively seek to do what is needed to succeed and bring the new culture to life. Skilled M&A teams intentionally build events into the transition period that create conviction around the new behaviors that must be adopted. The best initiatives deputize every employee as soldiers in the battle for the new culture as opposed to people who must be converted.
Engagement is accelerated when the achievable benefit is experience. Smart leads are diligent at ensuring early, visible wins that are relevant to front line employees, middle managers and support staff.
7. Develop Change Leadership Capacity
Feeling overwhelmed by the task? The majority of executive teams are, which is why smart leaders ensure that they and their teams are developing themselves both individually and collectively. This investment helps accelerate the adjustment period of the merger but also serves as an organizational asset post-integration. Winning companies in today’s market place are increasingly agile and able to rapidly adjust to change and effective leaders are the lynch pin of this agility. Nothing transforms a company culture quite like a merger or acquisition. The question is whether the new entity is transformed into a stronger organization delivering on the improved synergies and profits promised pre-M&A or whether it is transformed into a less productive bureaucracy that underperforms relative to what your team envisioned when you started this process. Where you end up is largely a function of your team’s ability to enhance the collective leadership skill to cause others to positively and rapidly adapt to change from the C-suite right down to the front line manager. This doesn’t happen by accident but requires a well-structured approach.