I’m working on a couple of integration projects at the moment in various parts of Asia and, as often happens when you’re immersed in something, a sudden moment of clarity arises which is worth capturing and sharing.
One of the challenges for an aspiring CEO and his / her integration director is a recognition that M&A is not like some kind of military battle or occupation! Thinking of M&A in these terms is not accurate nor is it helpful.
Sadly, if you look at the commentary around deals, from the press and often internally in the acquirer, you will find expressions like the following:
- Hostile takeovers
- Market domination
- Capturing market share
- Cost reductions, synergies, ‘rightsizing’ – all implications of job losses at the vendor
- Cultural clashes and turf wars
The implication behind this language is that victory leads to some kind of expectation that the acquirer is immune from any kind of change…it’s all going to take place at the acquired business’s end.
Now there’s the rub!
In successful transactions a key difference is an acceptance
that the deal has a material impact on both organisations….
and this needs to be included in the integration plan
It doesn’t’ matter whether you’re the largest listed company on the stock market and or a small family business, the deal you’re doing is going to have an impact on you, culturally, financially, organisationally and in terms of the position and reputation you hold with your customers. Geographical remoteness is no longer a factor as our global reach in terms of information flow continues to grow.
So, if we accept this, what’s the solution?
Embrace and positively recognise the change required in your organisation
As the acquiring CEO / Integration Director, look for the impact on your business and plan for it. As a starting point, look at the cultural impact of the deal on your role and responsibility (communication requirements, reporting structure, setting of strategic targets, style of leadership etc), and make a personal visible shift…and watch as others follow your lead.
I have written this but make no apologies for repeating myself! In M&A, people do not come with the assets you acquire…they are the most valuable, most independent and most challenging part of the deal and if you want them to stay and be productive, they need to feel some alignment with you and your organisation. Recognising your part in this process is a critical first step in that elusive goal…creating real value in your transaction!