While any leadership transition is challenging for some, the disruption surrounding an acquisition or merger (which is generally an acquisition by a different name) creates a challenges for everybody on all sides of the transaction. Handled well, acquisitions create real value. Handled poorly, value can be dissipated overnight. This is why it’s so important to pay attention to the leadership risks and opportunities inherent in an acquisition. This note takes the core ideas of The New Leader’s Playbook, based on our book, The New Leader’s 100-Day Action Plan, and applies them to acquisitions.
Our fundamental premise is the same: leadership is about inspiring and enabling others to do their absolute best together to realize a meaningful and rewarding shared purpose. To that end, three things make a big difference: Get a head start – Manage the message – Build the team. The components of those are your playbook for the first 100-days of an acquisition. But, as the acquiring organization’s team leader, you need to apply those components differently and in a different order than in a more normal leadership transition – not that any leadership transition is normal.
GET A HEAD START
1) Choose how to engage the context and acquired culture.
Context is a function of the business environment, organizational history, and recent business performance, informing the relative importance and urgency of change. Culture underpins “the way we do things here” and is made up of Behaviors, Relationships, Attitudes, Values, and the Environment feeding into readiness for change. Crossing context and culture helps you decide whether to Assimilate, Converge and Evolve (fast or slow), or Shock. Choose your way during the early stages of evaluating a possible acquisition. Then map contributors, detractors, and convincible watchers so you can move each of them one step by altering their balance of consequences.
Click here to read more about how Rudy Karzan led this during Kenexa's acquisition of Salary.com
2) Secure ADEPT People in the Right Roles and Deal with Inevitable Resistance.
Acquire, Develop, Encourage, Plan, and Transition talent to begin strengthening the team immediately, and over time. Every organization is perfectly designed to deliver the results it’s currently delivering. Almost by definition, you acquired the organization to deliver better results. So:
Acquire: Start to recruit, attract, and onboard the right people even before you close the deal.
Develop: Assess and build skills and knowledge over time.
Encourage: Direct, support, recognize, and reward people for Behaviors, Relationships, Attitudes, Values and impacting the organizational Environment in line with the way you want it to be.
Plan: Monitor, assess, and plan career moves over time
Transition: Migrate to different roles as appropriate, deciding early who’s in the right role and who’s not. The #1 thing experienced leaders regret is not moving faster on their people.
Click here to see how Tony Doye did this with Fujitsu America.
3) Position the acquired leader and team for success.
Start this effort by connecting values and goals, strengths and communication. Know yourself. Know the on-the-ground leadership and team. Know and deliver your message in your own voice. Leadership is personal. Your message is the key that unlocks personal connections. The greater the congruence between your own values, attitudes, behaviors, the environment you create, and the way you relate to the acquired leaders and other individuals on the team, the stronger those connections will be. This is why the best messages aren’t crafted; they emerge. Great leaders live their messages not because they can, but because they must. As Martin Luther said at the Diet of Worms in 1521,“Here I stand, I can do no other.”
Click here for one example of this with Facebook's acquisition of Karma
4) Embrace and Leverage the Fuzzy Front End Before the Close.
The time between knowing you’re going to do the acquisition and the deal closing is a gift you can use to get a head start on positioning the acquired leader and team for success. Our experience has shown that those who use this fuzzy front end to put a plan in place, complete their pre-start preparation, and jump-start learning and relationships as much as possible while working towards a deal close, are far more likely to deliver better results faster than those who choose to rest and relax. Five important steps:
- Identify the most important stakeholders up, across, and down – both inside and out.
- Plan your message, fuzzy front end, and first 100-days.
- Manage any personal setup for yourself and any people you’re dropping in so you all have less to worry about after you or they start.
- Conduct pre-start meetings and phone calls as possible to jump-start important relationships.
- Gather information and learning in advance to jump-start learning, partly by talking to as many as you can at different levels of the acquired organization. They generally know truth and are often not afraid to share it.
Click here to read more about how Susan Salka led this during AMN Health Services' acquisition of Medfinders.
MANAGE THE MESSAGE
5) Take Control of Day One: Make a Powerful First Impression.
Everything is magnified on Day One, following the deal close. Everyone is looking for hints about what you and the on-the-ground leadership think, and what you’re going to do. This is why it’s so important to seed your message by paying particular attention to all the signs, symbols, and stories you deploy, and the order in which you deploy them. Make sure people are seeing and hearing things from you and the on-the-ground leadership that will lead them to believe and feel what you want them to believe and feel about you and about themselves in relation to the future of their new organization because an acquisition creates a new organization.
6) Drive Action by Activating and Directing Ongoing Communications.
Where the emphasis used to be on logical, sequential, targeted, ongoing communication campaigns, the communication revolution has made it essential to manage multiple, concurrent, ever-evolving conversations across an ever-changing network of stakeholders. Leverage your core message as the foundation for those conversations by seeding and reinforcing communication points through the on-the-ground leadership through a wide variety of media with no compromises on trustworthiness and authenticity.
BUILD THE TEAM
7) Embed a Burning Imperative.
The burning imperative is a sharply defined, intensely shared, and purposefully urgent understanding from each of the team members of what they are “supposed to do, now.” Work with the on-the-ground leadership to get this created and bought into early on—even if it’s only 90 percent right. You, the team leader on the ground, and the team, will adjust and improve along the way.
Exploit Key Milestones to Drive Team Performance.
Milestones map and track what is getting done by when by whom. Leaders of high-performing teams take that basic tool to a whole new level, exploiting it to inspire and enable people to work together as a team!
9) Over-invest in Early Wins to Build Team Confidence.
Early wins are all about credibility and confidence. People have more faith in people who have delivered. You want team members to have confidence in themselves, in their leadership, and in the plan for change that has emerged. Early wins fuel that confidence.
10) Evolve People, Plans, and Practices to Capitalize on Changing Circumstances.
By the end of the first 100-days, you and the on-the-ground leadership should have made significant steps toward aligning the organization’s people, plans, and practices around a shared purpose. Remember, this is not a one-time event but, instead, something that will require constant, ongoing management and Darwinian improvement because we're all new leaders all the time. Leaders of mergers or acquisitions especially need to approach their efforts with an organic onboarding attitude.
These steps are described in more detail (though in a different order) in The New Leader's 100-Day Action Plan and its accompanying downloadable tools. There are examples of these in action and stories in the weekly "New Leader's Playbook" columns on Forbes.