|Published: October 15, 2010
Jennifer Selby Long, Selby Group
Speed up Your Acquisition Integration, Starting Today
Joe never meant to work for the same huge company three times, but without fail, each time he left to join the adventuresome world of a start-up, the start-up was acquired by his former employer within two years.
Joe is one of a growing number of clients who periodically find themselves leading the integration of an acquisition, either as a leader in the acquired company or a leader in the acquiring company.
Acquisitions continue to make headlines in the business press, and there is no doubt they are essential to the growth of many businesses. You’re certain to serve in a leadership role on at least one acquisition in the course of your career.
In fact, in fast-moving industries, or those involving highly specialized products and services, 100% organic growth is nothing more than a charming memory, and it’s the norm for large players to make several acquisitions each year, or even at the same time.
For you as a leader, this means that you must look for every opportunity to improve the speed at which you integrate each acquisition, but it’s not as easy as it looks.
Leaders often begin by using the same methods that make them so successful in leading an organization on a day-to-day basis. Unfortunately, this just doesn’t work well for acquisitions, because an acquisition can be a big change. In fact, everything can change, from long-standing customer and competitor relationships to the partners in the supply chain and employees’ daily jobs.
Let’s look at five of the most common mistakes that happen when well-meaning leaders use day-to-day management approaches to integrate an acquisition, and what you can do to accelerate the process and improve the outcome.
1. Viewing “acquisition communication” as the stuff you announce to people about the acquisition. Depending on its size and scope, an acquisition can be a small change or an enormous one. The tendency is for leaders to make announcements and think they’re communicating.
The most successful large-scale changes involve a two-way process, and it’s given the respect it deserves by being at least somewhat formalized and measured for its contribution to the success of the change. It’s certainly a lot more than saying to the managers, “So, how are your people doing? Everyone’s o.k., right? Great! Be sure to announce the latest acquisition updates at your next staff meeting.”
To get a better result and accelerate communication, set up a process for ensuring that concerns are raised through the hierarchy and addressed. Think there’s no hierarchy in the way? Think again. I only hear that statement from people who are at the top of the heap, and virtually never from individual contributors!
No matter how approachable you are, a medium or large acquisition is simply too big of a change to trust to strictly informal channels.
2. Massively underestimating what it will take to integrate people, processes, and systems. When the level of effort is underestimated, it creates drag on the organization as the integration misses deadlines and managers have to spend more and more time re-scoping the integration efforts.
This can also create drag in the emotional mindset of frustrated and confused customers, dispirited employees, and angry partners. It takes a lot of courage, persistence, and tenacity to create and sustain a strong integration plan. Because the habit of most organizations is the habit of day-to-day operations, it takes serious effort to infuse the very different practices involved in managing a big change like an acquisition.
I’ve seen few successful acquisitions without a dedicated integration team, with the exception of very small ones with only a few employees. You’ll likely need dedicated resources in IT, a working group to integrate different business models and processes, and of course, the facilities and HR teams. You can begin moving in the right direction today by assessing the quality of the current plan and the resources in these areas.
3. Moving too slowly in reorganizing the company. It’s a difficult truth, but some people may lose their jobs and if you need to make these cuts, it’s better to get on with the job. When leaders prolong confusing, duplicate, and overlapping roles, or lay-off employees in seemingly random one’s and two’s, they increase cynicism, frustration, and the fear that the acquiring organization’s leaders are inept, indecisive beaurocrats who can’t make up their minds.
The decision to let people go is so painful and exhausting for everyone involved (even me, and I’m just the outside consultant), but leaders must bite the bullet. If a reorganization is focused and takes weeks, not months, or as few months as is reasonable, the remaining employees at least will be able to focus on their work instead of wondering when the ax will fall.
4. Corporate spin. Sure, everyone wants to follow an optimistic leader, but that doesn’t mean putting a positive spin on obviously negative developments. You will kill your credibility, particularly among the employees of the acquired organization, most of whom have no relationship with you, and therefore no particular reason to trust you in the first place.
Be honest, and share your plan to address the issues, or at least your timeline for pulling a plan together. Your people are living day-to-day with the consequences of any negative developments. They’re probably even the ones who brought the problems to your attention, if you’ve implemented a solid two-way communication process. Show your respect for them by treating these challenges with honesty and compassion.
5. And from deep in our unconscious selves…leaders of the acquiring company implying that the employees of the acquired company are so darn lucky to be part of this grand, glorious, big company. These days few leaders are crass enough to say this out loud, but the fact that we don’t say it out loud in no way addresses the fact that we feel it, if that’s what we feel. Attitudes and emotions leak out all over the place.
But reverse this attitude quickly if you see it in yourself or in someone else, because if the undertone set by the acquiring company’s leadership is in any way superior, the employees of the acquired company will pick it up and head toward to door to your competitor at the first opportunity. You’ll also lose out on all you could have learned from the employees who stay, because you’ve inadvertently demeaned their knowledge, skills, and expertise.
I recall the time I found myself sitting in the regional sales office of an acquiring company. When the SVP of Sales announced the acquisition of their largest, closest competitor, the sales team cheered and yelled, “We win! We win!”
The acquisition turned out to be a stunning success, in part because the SVP responded, “Hey, cut it out, you guys. Each of these people is part of our team now. We’re in it together and frankly, I’ve seen their numbers and they’re every bit as good as you are. If they weren’t, we wouldn’t have acquired the company.”
Accelerating integration is no small task, but tackle these five areas, and you’ll begin to gain the momentum you need.
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