- Posted by metre22
- On April 24, 2015
- 0 Comments
- Acquisitions, Leadership Behaviors, Metre22 Blog
In our experience, realizing deal progress and creating value during a merger or acquisition is largely driven by the combined firm’s ability to make decisions and remove uncertainty quickly. However, a fair amount of the probability for deal success hinges on how people behave. This isn’t just true for how the buying company’s leaders act – it applies to the leaders of the company being acquired as well. Here are a few suggestions for acquired-company leaders based on our observations in dozens of acquisition situations.
It is an emotional proposition to have your company sold to another. With all the emotions that typically surround a deal, it is often difficult for the employees of an acquired firm to stay objective. Cynicism can creep into everyday interactions with the new owner. Geographic distance compounds the problems as employees who are disconnected from the new “headquarters” can misinterpret emails and other attempts at communication that originate miles away. As a rule, leaders in an acquired firm should assume best intentions with each and every interaction. With this as a starting point, objectivity is more easily within reach.
Within any company, people grow accustomed to working with each other over time. As they do, they find language short cuts that make communication easier and more efficient. Some of this shows up in the form of acronyms (as in, “I think the LRE must be off for the BSA unit – Q3 showed a decline in RTA results and wouldn’t justify a P16 increase like they are showing”). Other times it is more subtle and is found in the way the culture of an organization has ascribed certain meanings to common words. Time and again, communication tangles can be traced to firms who have grown up with differing definitions of words like “forecast” or “income” or “sales pipeline.” The answer lies in proactive listening – restating what you think you are hearing and asking probing questions about the meaning of statements. This is especially true on the part of the acquired firm. For an acquired firm “getting integrated” is largely dependent on the leaders’ ability to understand the new language and shift historical definitions to fit with those in the new combined company.
It is human nature to want to compare ourselves to others. We take the comparative thinking stance with our neighbors, with other communities, with other countries, and even other religions. It’s no surprise that two companies in the midst of an acquisition begin their comparisons early in the process. Comparative thinking can be healthy in that it gives us a point of reference and perspective. But the danger comes when comparing processes, technology, and structures between two companies degrades into judgments about which way is right and which is wrong. Objectively assessing what is different and which way is best for the combined firm is a valuable exercise. Using judgmental statements to make a case for one approach or another can damage cooperation and prevent progress. As an acquired firm, when you catch yourself thinking “the way they do this is just plain wrong,” it’s is time to step back and reevaluate the situation from a more objective viewpoint.
As an acquired firm, the best and most reliable way to facilitate integration comes down to one item – business results. The success or failure of a deal and the subsequent integration will always be colored by things like the ease of policy and back office integration. But after the dust has settled, the only real measure of success is performance with customers and the resulting revenue and profit of the business. To get the best bang for the buck when integration planning and uncertainty has a grip on the workforce, the most experienced leaders take a look at their initiative list and trim their strategic priorities to the most impactful 3 to 5 items. Laser-like focus is beneficial for companies at any stage. However, when a major integration effort is on the horizon, removing unnecessary noise from the environment goes a long way to protecting productivity and value.