I’m working on a couple of transactions at the moment around the region and one of them in Indonesia led to a moment of insight which I wanted to share. As consultants, we are frequently accused of looking for the big impact change…the magic bullet which will dramatically transform the project / or open the stakeholders eyes to a new way of doing things. In the mergers and acquisitions area though, […]
Whisper it quietly but it seems that the M&A market is finally returning to some very decent volumes again (http://ftalphaville.ft.com/2014/04/07/1821102/ma-is-back-ish/). No doubt the headline transactions will be the ones that everyone is focused on, not least because the old scourges of government intervention in the case of Alstom (or pure protectionism by another name) plus aggressive valuation in the case of Astra Zeneca are being played out in public. The […]
I’ve just spoken at an excellent conference on project management in KL. There were some truly interesting seminars on project recovery, risk, the danger of optimism in projects, and of course Agile. It is extraordinary what sort of reaction this topic generates amongst proven, seasoned project management professionals and the range was certainly on display at the conference. I saw everything there from fear and loathing, to contemptuous dismissal, to […]
Originally posted on Dart-Throwing Chimp:
Yesterday, I participated in a panel discussion on the use of technology to prevent and document mass atrocities as part of an event at American University’s Washington College of Law to commemorate the Rwandan genocide.* In my prepared remarks, I talked about the atrocities early-warning system I’m helping build for the U.S. Holocaust Memorial Museum’s Center for the Prevention of Genocide. The chief outputs of…
Are we always going to spend countless hours on planes to get to sit in meeting rooms with colleagues?
This morning, as I sit on yet another flight, this time from Singapore to Hong Kong, it’s ever more apparent to me that far from video conferencing and other forms of communication taking the place of international travel, planes are fuller than ever with business travellers flying short distances for a schedule of meetings, which from my own straw poll over the past 18 months, are mostly internal to their […]
I’m working on a couple of transactions at the moment and was reminded recently again of the critical role that an exiting CEO can play in smoothing the path of a deal, often at its most important phase, in the post merger integration. For those of you who have been involved in M&A, you will recognise the quintessential challenge which an acquirer faces in dealing with this individual. The facts are relatively straightforward:
- He / she will be one of the first casualties of the deal. Typically given the nature of the deal marketplace, the new CEO is appointed by the acquirer and rarely comes from the acquired business.
- Financially, the exiting CEO will be looked after…either through a short-term retention package or through a settlement around redundancy, giving him / her the relative freedom to make some personal decisions about what to do next.
Accepting this as the status quo is in my opinion a mistake, particularly in cases where the CEO concerned has played a key role in the development of the business, leading to its sale and continues to be valued by the employee base. He is likely to have been involved in the hiring, mentoring, and career development of key people, notably his / her direct reports, who will be important in the integration process. He / she will have had an impact on the culture of the organisation in the way that decisions are made, where autonomy sits in the corporate hierarchy, what level of risk appetite exists and perhaps in the flow of information around the business. He / she will have had a role to play in the informal organisational structure, where the key influencers sit and how they interact. Now, without doubt, having him / her around can be more than awkward for the incoming CEO. There is the potential for a disruptive influence, for a lack of clarity around who the ultimate decision maker is, perhaps even for the creation of some kind of corporate terrorist who will actively undermine the new direction of the business. There is also the possibility that he / she does not want to be involved in the next stage of the company’s development. Clearly these are all unacceptable and need to be dealt with quickly. However, let me create an alternative scenario. Let’s consider the role that this person could play given their unusual position in the merging organisation and with the appropriate good will:
- An initial engagement between announcement and completion which focuses purely on the prevention of value destruction…retention of key individuals, strong and well directed communication around the transaction as much as that is possible, engagement of the key customers maintaining service standards and relationship management during a disruptive period. In fact, in my experience this period has significant potential for major value destruction as the attention and focus of key people drifts to the prospects of their immediate future.
- A role around Day 1 and for the first 100 days which is as chief communicator and translator / interlocutor for the acquired employee base, using that trust, those relationships and that intimate knowledge of how the business works to create some stability in the critical initial period. I’ve worked on several transactions where the exiting CEO used his influence to translate the requirements and expectations of the acquirer to his workforce, giving an understanding of culture and work processes which removed the emotion from the deal.
- An adviser to the integration steering committee, to be used as necessary to comment on and provide insight on direction, plans and key initial activities.
And in return for these important actions, a compensation structure which is firmly linked to some initial KPIs around key employee and customer novation / retention, effectiveness of communication flows, and perhaps stability of revenue / cost post completion. I read in the FT and indeed many of my colleagues are suggesting that there is an upturn again in the deal volume being experienced. Having spent 14 years consulting in this arena, it would be great if we could finally move away from the cycle of value destruction and find some new solutions to an old problem. Using the insight, relationships and knowledge of an exiting CEO might be a small step in the right direction.
The Triangles of Truth Part II: Change management is not project management, which side of the fence are you on?
I’ve attached a link to an excellent blog by Jeremy Lewis…he puts a good case to the often false distinction between change and project management. Worth a read.
With thanks to Toby Tester for this topic, I wanted to explore a subject which has been close to my heart for more years than I can say. How did we get to a situation where the presumption is that human capital productivity stays constant in periods of intense change? I know this blog is supposed to be a series of incisive commentaries based on personal consulting experience but the […]
With thanks for an excellent seminar last night by Thomas Martin of Forward Intelligence Group and previously Microsoft, and also a reflection from a number of other clients and colleagues, I’ve been observing an interesting series of phenomena in the last few months. A redrawing of some of the traditional boundaries between transformation and business as usual activities, specifically when it comes to allocation of CAPEX. It seems that there […]
With apologies for a slightly introverted blog, I wanted to raise an interesting issue which has been raised by three people this week who’ve somehow stumbled upon this random collection of thoughts and ideas in the last week. It appears that what people like most about this blog is the candour and openness of the commentary. Why is it so difficult these days to give an honest opinion without fear […]
For many of us and indeed for many of my clients, the activities of global functional leadership can be a source of frustration and occasionally extreme irritation. That’s not to say that the individuals within those functions are not performing to the best of their ability and don’t have all the right intentions for the business. Indeed one might say that to have reached that position requires talent, a strong network and […]
Now before you all bombard my blog site with death threats, this is not going to be a diatribe against the qualifications which are prevalent in the arena of programme and project management. I fully accept that these have a place and a value, and for someone starting out in the world of complex programme / project management, having the confidence of this type of certificate is clearly important and […]
Why do we let people who are fantastic at attracting votes run complex financially driven ‘corporations’?
As the referendum for Scottish independence draws closer, the crass opportunism and incompetence of those who are supposedly in charge of our economies becomes more and more apparent. I’m drawn to an analogy in the corporate world…would we let someone trained in the dark arts of public relations take the role of a CEO / CFO / COO? Would we let someone who was an excellent after dinner speaker take control […]
For several years, I’ve been drawing the same picture…the one which illustrates that the percentage of a company’s activities related to business as usual versus that related to what I call ‘special projects’ has been changing over the past ten years, in favour of the latter. By special projects I mean: mergers and acquisitions joint ventures new product launches new territories expansion significant change in strategy and subsequent implementation requirement […]
Originally posted on Paul4innovating's Innovation Views:
Let’s start with some defining statements. Innovation is totally dependent on becoming aware of external ideas and the knowledge that is needed and then translated for it to become new innovation. We can ‘fall over these ideas’ or we can find ideas or concepts through explicit search. Then to translate these and turn them into something new and different we need to…
I was listening this morning to the Forum on the BBC which had an archectural theme to it, notably including Stephen Bayley, a commentator with whom I had dealings some years ago and whose opinion is always worth listening to. He made the point that the completion of very large, eye catching buildings seemed to frequently coincide with an economic downturn and quoted Dubai and various buildings in London, the […]