Inarticulate ramblings of a management consultant

the day to day experiences of a consultant operating in weird and wonderful client situations

What’s the big deal with hostile takeovers? Employee engagement or the ‘Hedgehog’ phenomenon!

A couple of weeks ago, following the rash of hostile transactions (see this link to a good FT article on the issue), I wrote a piece on one of the key challenges behind ‘going hostile’, that of access (you can read it here). This week, my focus is Engagement.


In many ways, all the problems of hostile transactions stems from this dimension (it is also, by the way, a challenge in ‘friendly’ deals but not to such an extent). The mindset of the acquiree (through its leadership or perhaps through a perceived competitive threat) can quickly develop into one where lack of engagement is seen as the collective best policy. In one organisation I worked with, the workforce actually described themselves as ‘hedgehogs’ in terms of their reaction to the acquirer! hedgehog

I emphasise the word collective because the reaction to a hostile takeover can quickly becomes a cohesive one, where the strength of a single employee voice is recognised and set against the acquirer. Beyond the obvious challenges around disruption to work and loss of productivity which result, there are a number of more insidious ones which are harder to see initially but quickly develop into big problems:

  1.  Customer service and engagement. For those who have a perceived ‘personal’ franchise in their relationship with customers, the role of informed but objective insider becomes very attractive. It enables the relationship owner to comment from a supposedly external perspective on the plans and developments of the integration process, maintaining the customers’ interests at the heart of his / her analysis. The consequence is the development of distance between customer and acquirer which often takes a radical step (removing the current ‘owner’) to undo.
  2. Passive resistance. In many areas of operational support / non-customer facing activities, companies rely on the pro-active resolution of operational issues, whether that’s in the form of small feedback loops within a function that take very quick readings of the reaction to a change in process, or it’s in the informal support of a strategic message amongst colleagues by an opinion former, or it’s the technology function working around known problems in some aspect of the systems infrastructure to deliver a broader change requirement. In the latter case, the idiosyncrasy is not captured on any particular document but is part of the functions corporate memory. These pro-active solutions are in the gift of individuals who are positively engaged beyond their own personal needs / requirements. They are not written into any job description or key performance indicators and are largely unknown by the supervisory / middle management layers in the business. Individually, they look very small but when they fail to take place, their cumulative effect is disruptive and ultimately leads to loss of productivity / competitiveness.
  3. Discretionary time. I’ve written before about productivity (see this link). It is related to the above point but more specifically, it is the time that we commit to our employers when we are not contractually bound to them. We have a choice with regard to this time, whether it is to spend time with the family, in the gym, or whatever else we do for pleasure. It’s incredibly valuable time, not just because of the implied opportunity cost but also because it is ‘thinking’ time…a moment where a breadth of perspective and lack of distraction can lead to really insightful concepts and ideas. In an environment where engagement is low, this discretionary time is no longer committed to employers…with subtle but long term consequences.

Let’s be clear…employee engagement is a big problem whether you in a deal or not. Like many things though, the effect is markedly increased in a hostile transaction where there is no attempt at mitigation from the current leadership…which will be my topic for next week.

Categories: Consulting, Hostile takeovers, Mergers & acquisitions, passive resistance, post acquisition integration, Transformation

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