Category: Organizational Culture, Change Management, M&A Activities
Audience: Leaders, CEO, COO, M&A Executives
Overview: Planning for M&A Activities Takes Focus & a Roadmap Approach
By: John K Moore, President, Client Performance Solutions, The Culture Think Tank
Read Time: 4 minutes
In an era of instant communication, your leadership reputation during M&A activities is critical, influencing how you are perceived by both acquired employees and those left behind.
Up to 80% of M&A deals fail due to a lack of focus on people, culture, and the necessary behaviors of leadership and employees.
Despite this well-known statistic, M&A executives often remain “numbers-focused,” prioritizing spreadsheets over human capital factors. Once deals are complete, these ‘deal makers’ typically move on, leaving others to handle the aftermath.
An over simplification – perhaps, but this trend has persisted for 25+ years!
I led a global team of Consulting Partners and Associate Partners at Andersen 25 years ago during the design, development, and launch of their first global M&A practice. The significance of this practice – as well as bragging rights – was the innovative way we began by reverse-engineering our operating model and methodology to accommodate all the reasons WHY M&A deals fail and WHY they succeed.
We also combined audit, tax, consulting, and legal professionals – for the first time in Andersen’s 65-year history to focus on a specific client need or business goal.
Prior to this work, Andersen only went to market by audit, tax, and consulting. This approach left it up to each client to decide how they wanted to orchestrate each component to achieve their desired result.
Our innovative approach highlighted a crucial truth – Business is fundamentally about people.
The Comprehensive Communication Plan
Most M&A deals involve only a few executives, leaving the broader workforce in the dark until execution, which fosters mistrust and necessitates the need for a comprehensive Communication Plan.
Whether you’re being acquired or the ones doing the acquiring, you’ll need to decide how your people will be treated or deserve to be treated.
Remember these are the same people who helped make all those spreadsheet numbers happen in the first place!
They’re the human capital power behind the numbers – frequently overlooked during and after M&A activity. They’re the same people who missed birthdays, anniversaries, and the birth of their children to help contribute to where you are today.
Developing a comprehensive Communication Plan is key – it takes time, energy and money to put together and continuously implement the plan at all levels of the organization – be prepared to budget for this valuable component as part of your Change Management Program.
For those of you not familiar with the Roadmap approach to Culture & Performance:
Every strategy, even a people-related strategy addresses THREE key questions:
- Where are you now?
- Where would you like to go?
- How will you get there aka your Action Plan – the Culture & Performance Roadmaps.
The Culture or Behavior Performance Roadmap
The investment and cultural due diligence work should extend beyond financials to include cultural and behavioral assessments, forming the basis for a Culture or Behavior Performance Roadmap.
Key components of the investment thesis include documenting business goals and underlying assumptions related to the M&A activity, particularly those concerning people, culture, and behaviors.
This roadmap outlines the current situation, desired goals, and actionable steps – involving updated job templates, critical behavior interviewing techniques, performance scorecards and more.
Additional due diligence focuses on payroll, benefits, and legal reviews of employment contracts to avoid monetary surprises. However, it should also encompass exit interview results, employee and customer satisfaction surveys, performance scorecards, and social media posts.
This comprehensive approach provides additional clarity needed to prepare the Culture or Performance Roadmap and guide your next steps.
Who is Involved In Your Roadmaps?
The investment thesis, business goals, growth objectives, value drivers or whatever you’re calling them will help determine which departments, leadership areas or major processes will be involved.
For each, there will be key leadership and employee behaviors required. Those behaviors each have specific tactical deliverables associated with the creation, development, and ongoing monitoring required during a company transition.
Some of these deliverables may include:
- Updated job posting templates
- Critical behavior interviewing (CBI) techniques
- Recruiting phone scripts
- Enhanced job descriptions by career level
- Performance scorecards
- Culture Management Office
- Onboarding and training material updates
- Employee satisfaction survey enhancements
- Annual employee performance metrics review process
How you manage the human elements of an M&A deal will define your leadership reputation.
By prioritizing people and culture alongside financial goals, you can navigate the complexities of M&A with greater success, fostering a positive environment for all involved and driving long-term organizational success.
Again I ask the question – How would you like to be known by the people you acquired as well as those who are left behind?
John is President of the Client Performance Solutions Division at The Culture Think Tank. He specializes in developing innovative strategies and aligning them with processes and people. His book, Align or Resign, highlights many of his business techniques. Schedule a chat on John’s calendar.
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