At the risk of antagonising a number of my close colleagues and friends who work with me currently or with whom I’ve had the pleasure of working in the past, I wanted to ask a challenging question.
In 14 years of working with companies going through a post-acquisition integration process, there’s been an outstanding issue which to my mind has never been answered properly – Why is it that process always comes before people?
Put differently, why is having strong programme management skills deemed more valuable than being able to communicate effectively? Why is understanding and planning for risks which may occur during the integration process more important than engaging with key influencers whose knowledge and ability to change things is considerable? Why is the activity of managing the dependencies as part of an integration management office’s responsibilities more critical than understanding the acquirer’s inherent ability and experience in a project which involves behavioural change? Why do companies emphasise developing a target operating model which creates a set of performance indicators for the business to achieve in 3 years above articulating the behavioural operating model which will deliver that performance?
The list of juxtapositions could go on but I think the point is clear – the idea that process is critical whilst people based activities are considered a ‘nice to have’ seems to be the credo in the post deal integration process.
The history of post-acquisition integration makes this issue (or contradiction) even more of an anathema. The statistics on post acquisition value destruction are well known and I don’t propose to write about them here. However, in the context of finding solutions to address possible weak links, the issues causing value destruction deserve our investigation.
If we look at the causes of retrospective dissatisfaction, well over half (in terms of percentage) of these identified components of integration relate in some obvious way to “people”. The reality is that even a process-orientated issue like ‘better planning’ relies on interaction, communication, trust and relationships between people. And yet, the same buying habits continue.
Whilst there is increasing amounts of airtime given to people related issues and some of the results are quite startling, the decision makers within the vast majority of clients with whom I have worked, look for a robust process of integration first and foremost. It appears that this is the skill set which they have most concern about from the perspective of their internal capabilities.
One of the reasons why I started in this business all those years ago was a moment of clarity that there was a direct correlation between the loss of key people and the value destruction which took place in integration projects. 14 years later it seems that we’re dealing with the same issue…depressing or a continuing opportunity? You choose!
Categories: Consulting, Human Capital, Mergers & acquisitions, Post merger integration
Tags: Behavioural change, culture, human capital, planning, productivity
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