I’m currently reading “Switch – How to change things when change is hard” from Chip + Dan Heath. It is a very inspiring book. The reason I bring this up in this blog is that the concepts presented in this book also apply to Mergers & Acquisitions. After having seen the tough challenges related to Mergers & Acquisitions myself I think it is very important to keep these points in mind to get to a better M&A experience. As a first step we should recognize that (M&A related) change happens on two levels.
1. Intellectual Level
Examples:
a. Extended product or service offering through M&A
b. Coverage of new markets
2. Emotional Level
Examples:
a. What does this change mean to me?
b. How different are the cultures of the two companies? Which culture will prevail?
For the “Intellectual” Change they recommend
- Find the bright spots
Instead of just looking at the challenges (e.g. different IT systems need
to be aligned, processes need to revised etc.) look at what is getting
better because of the M&A.
- Script the critical moves
That is a big one because to script all the critical moves is the challenge.
You need to make decisions based on limited data and knowledge.
Analysis is important but it is equally important to not fall into the
Analysis-Paralysis trap.
- Point to the destination
The M&A Lead should be able to define clearly what is needed
by when. Again, easier said than done but it is necessary to translate
the big picture into specific steps/behaviors in order to be successful.
For the “Emotional” Change they recommend
- Find the feeling
As suggested by John Kotter and Dan Cohen the change sequence for
big changes like M&A’s should be SEE-FEEL- CHANGE instead
of ANALYZE-THINK-CHANGE. You have to create an
environment where people want the M&A to succeed and where
they are buying into this effort BEFORE you start analyzing.
- Shrink the change
In a M&A situation it is easy to be overwhelmed by the changes.
To make this easier to digest and get more buy in from everyone involved
it is necessary to make the changes smaller and more achievable.
- Grow your people
Make sure this is not just a saying, live up to it. Focus on the people that
want to stay in the new company and buy into the M&A. Find out why
they want to stay and then apply this knowledge to improve the situation
for those who are struggling. There will be challenges ahead but there will
also be new opportunities. Make sure this is understood early on.
The third change component is to shape a path to the desired change.
This has the items
- Tweak the environment
- Build Habits
- Rally the Herd
If you truly understand these concepts and can apply them in a real M&A situation you should have a considerably better M&A experience. It still won’t be smooth but better.
Get the book to see many detailed examples and to get some inspiration how and what you can apply to your next M&A situation (or any other change situation).
