Transformation - Before, During, and After the Merger

June 5, 2019
10:33 am

The merger and acquisition (M&A) environment involves strategy, negotiation and valuation; it’s the integration of assets with the primary objective of stabilizing the current business and then building up future firm value. At its basics, a successful M&A process entails achieving progress with as much velocity as can be tolerated to maximize strategic value, while also minimizing as much as possible any distractions or disruptions to the existing operations of all involved businesses. Strong leadership is needed at all stages of the merger to achieve this balance.

M&A Preparation

A successful M&A involves asking key questions and developing an integration plan early in the process. The questions that need to be asked, discussed, and answered, through the due diligence and review stage of an M&A include:

  1. Can leaders and managers drive the tough operational changes necessary to achieve the envisioned financial benefits?
  2. Do the businesses involved have the right people to drive these changes; do they have the capability, capacity, or experience?
  3. With external consultancy engaged, how long post-merger will they need to remain to ensure these changes are made seamlessly, with a high level of cultural engagement, on time, and within the financial budgeting allocated?
  4. How will the legal, regulatory and compliance impacts be anticipated post-acquisition in the short, medium and long term?

What the above questions highlight include multiple HR implications. Collectively, these translate to the overarching question, “Does the HR leadership and their teams possess the capacity, support, experience, or at times gravitas, to be heard and lead the change process?” Furthermore, can they focus on the drive for change while at the same time have a ready mechanism secured to deal with any future unforeseen challenges in the implementation - post deal?

Saying this, as with all M&A activity, one can plan process and operations down to an (almost)fail-safe detail; however, the one area which at times can delay, distract or divert the activity of those trying to achieve the targeted objectives are the people themselves!

People and the M&A Process

Throughout the M&A process listening to what people are saying and not assuming all is known is a fundamental early adoption. The change management environment needs to be promoted and embedded into the integration and transformation very early on - ideally seconds after the “ink is dry” on the agreement.

One of the constant themes in the merger process is managing the behavior and emotion of the people who are experiencing the transformation and usually, this is at the senior manager to leadership level. This can exhaust and put strain on the M&A process, hence there is an absolute need to carefully manage these behaviors and emotions so such leaders can do what they need to do, which is to Lead. This can be difficult when both must happen in synchronization, i.e. the merger process needs to hit timelines and in parallel, leaders need to be fully engaged.

Often, investment and resourcing are made within the ‘structural’ aspects of M&A and the associated transformation the organization will undergo; however investment in the support and resources that managers and leaders need as they set up their new teams for success, before, during, after the merger is also essential.

Post M&A

Leaders traditionally execute the plan for the post-merger very well, with great enthusiasm and all the actions and activities required. Often though, once the process commences, they simply fail to deliver the cadence required for sustainable and ongoing success. Shortfalls in expectations and ‘performance failure’ in the post-merger environment are often related to the absence of strict monitoring of the post-implementation strategy. Thus, as time progresses, it is critical for leaders to continually evaluate progress towards meeting specific goals and objectives.

Conclusion

Managing change during an integration must be designed and targeted as to the specific organization’s culture. Knowing that change always starts at the top, each leader must be personally involved in defining the many facets of what the new company will look and feel like prior, during and post M&A. Such actions will ultimately define the future success of the merger.

Download the full publication here.

About Mark Lindley:

Mark Lindley is a Director and member of the Bâton Global Advisory Board. With over 20 years as a Human Resources and Business leader, his career success has been through an entrepreneurial and curious approach to new challenges and ventures, keeping a firm focus on the strategic direction, regardless of the changing and ambiguous environment. Operating across the Middle East, Asia, Europe, UK, North America regions at Director, SVP and Group level HR positions within FTSE 100, MNCs and leading national brands, Mark has always had a highly commercial focus on sustainable growth of an organization. He is a proven leader, trusted adviser, coach, and HR entrepreneur. Mark is invited and actively participates as a keynote speaker, panelist and contributor to think-tanks on topics such as, business transformation, change management, culture engagement, talent capability, leadership, organizational design, learning frameworks and employee motivation.

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June 5, 2019
10:33 am
Integration
Innovation
Change Management
Execution / Implementation
Impact
Organizational Impact
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