Mergers and acquisitions are international news on a weekly basis. In fact, just this month alone, Anheuser-Busch InBev announced its acquisition of SABMiller in a deal worth over $100 billion dollars. In addition, Dell purchased EMC in a $67 billion dollar deal touted as one of the largest tech mergers ever. Whether we’re talking about multi-billion dollar deals such as these, or smaller ones, there is no doubt mergers mean change is coming for at least one of the organizations affected, and more likely than not... both of them.
What we also know is that achieving the potential synergies and financial benefits is unlikely if the people-side of these M&A’s is ignored or given insufficient attention. There are plenty of examples of cultural mis-matches that ultimately brought down the new organization. Years later, the struggle between the organizations continues to dilute performance.
Companies going through a merger cannot afford to just sit back and let the changes “happen.” If they do, the change will manage them rather than the other way around. Because IMA’s proprietary Accelerating Implementation Methodology (AIM) is focused on a process for human-side implementation – the stage that can make or break a merger – the framework lends itself ideally to successful integration. The first step in a sound integration plan is to have a unified approach and language—a change management methodology that crosses both organizations.
After years of change consulting experience in this specific area, and countless conversations with leaders who are still trying to achieve the intended results, we can say that HOW you integrate teaches both organizations powerful lessons that remain long after the ink is dry!
6-Step Process to Build Capability
Organizations often don’t apply business-discipline and rigor for managing the human elements of complex, large-scale change such as a merger or acquisition. While they may know many of the right things to do, the success rate is marginal at best. Managing a merger can be simplified by following the 6 steps below to build capability:
- Define the desired culture for future business success
- Audit both current cultures against the “desired future”
- Plan the degree of process and function integration required
- Build a change management implementation plan with a structured framework based on best practices
- Build internal capacity to implement the plan
- Measure/modify plan based on data
Merger Survival Tips & Tools
M&A means one or more of the organizations involved is going to need to do different things in different ways. By definition, this is a 2nd order or Transformational Change. As experts in Change Management we know that a quick fix is never going to work. So here are some best practices to follow:
Lesson #1: Speed is key.
Creeping changes, uncertainty, and anxiety that lasts for months is debilitating and immediately drains value from an acquisition. Instead, try to integrate quickly, while remembering to target key cultural and human barriers.
Lesson #2: Understand your purpose/rationale for the deal and align management actions with that purpose.
Integrating diverse cultures, i.e. patterns of values, behaviors and unwritten rules, is messy and time consuming. Determine where on the integration continuum you need/want to be both functionally and culturally and then develop a clear definition of your desired future state.
Lesson #3: Senior management must model commitment to the change.
This commitment must cascade down to every manager in the organization, from senior management down to the line managers. Without perceived management commitment, implementation success will be severely compromised.
Lesson #4: Be prepared for resistance to change.
Resistance to change is natural and inevitable. If not immediately and properly managed, resistance will fester and act as a barrier to your implementation. Respond quickly to concerns, rumors and questions.
Lesson #5: Pay particular attention to the efficacy of reinforcement systems (rewards and consequences) to effectively motivate people to work toward the desired goal.
Reinforcement is the power lever for any implementation. Create a strategy to ensure behavior change is in the desired direction, and discontinuance of current patterns occurs.
Lesson #6: Develop an effective communication plan.
Make communications two-way and constituent/stakeholder focused (in their frame of reference). Use a variety of communication channels, with an emphasis on the face-to-face.
Lesson #7: Employ full-time Change Agents.
Integration management is a full-time job. Train a group of key people through change management certification to handle the incredible volume of questions and issues that will emerge during times of high uncertainty. While the senior executives must continue to lead the process and maintain business momentum, another group can act as a reliable source of information and provide quick, tactical decision-making.
Lesson #8: Be prepared for surprises.
This type of implementation will be harder than you can ever imagine – vis-a-vis politics, emotions, time, effort and resources. In short – ignoring the human factors will ensure disaster.
When two or more organizations attempt to merge into one, change is inevitable. AIM is a speed-focused Change Management Methodology that helps identify potential barriers to the change, enabling quick implementation with limited resources. Because of its practical nature, its accessibility and mass appeal, AIM provides a “how-to” process that all members of an organization can utilize and believe in, making it ideal for large-scale, transformational change, including mergers and acquisitions.