(Fourth in a Series on Change Management)
Pardon me as I start with some constructive feedback for the “change management profession.” As a change management leader in the M&A sector, I am tired of having to argue for why an executive should want to think about and implement effective change management. (For a very compelling ROI discussion, see Why Every Acquirer Must Get Good at Change) I put a big chunk of the blame on change management people who don’t get the big picture. The more these types talk about tactics, programs, practices, nits and details, the more the real impact and strategic need for change management gets lost in the weeds. Some in the profession have a very bad tendency to get the change management “cart before the horse.”
"Hearing about the vision, leadership, culture and alignment messages is just not enough for this stage. Folks have to see it, feel it and experience it to make it real."
Well, I’m not going to do that. This week I want to change the typical change discussion from tactics (which we’ll cover next week) to strategy-- specifically, what you as a change leader must be relentlessly focused on as the most important and most strategic outcome objectives of your change effort.
As illustrated briefly in The Change Leader’s Ultimate Strategic Objectives, the deck is stacked against you from the outset. Initially, only a relatively small percentage of your target company staff, and perhaps a slightly higher percentage of the buyer-company staff, will be supportive. Thinking through this framework of which groups or individuals are fence-sitters, cynics, saboteurs, cooperators and champions is an absolutely essential input to achieving your strategic objectives.
I like to think of change management strategy as climbing a mountain. Your role as a change leader is to guide the entire organization from base camp to summit. In the M&A world especially, this path means you’ve got to progressively climb from awareness, to understanding and acceptance, but then you must motivate and gain commitment from others to do the desired actions and behaviors required for success. For those most impacted by change, this can be a very steep and treacherous hike. That’s why it takes such substantial time and effort from senior leaders throughout the organization. You can’t sling a few communications around and say we’re done with change.
As you are leading the organization from the valleys to the vistas, stay oriented to these key strategic outcomes as your “true North.”
- Restore/build trust and credibility. Senior leaders must be real. Authenticity, candor and transparency build credibility. If you screw up, say so and fix it. Always lead from the front. Tell folks what to expect and what your expectations are of them, then show them the way.
- Establish the vision and get aligned to it. Lack of strategic clarity kills integration and motivation. Starting with your Game Day executive strategy framework session, set the vision, explain it and keep explaining at every opportunity. Speak to why the current state is insufficient, and why the future state is so compelling. Show your personal conviction and commitment to get there and help others get there. Use smart organizational incentives, systems, processes and reinforcements to support alignment and then recognize role models.
- Define and implement high performance cultural attributes. Cultural integration should be less about converting the target company to “the way we have always done things.” It should be more about a collaborative inflection point to help you get the combined organization thinking and acting in ways proven to drive high-performance outcomes.
- Emotional on-boarding. As my friend Jack Prouty, President of the M&A Leadership Council reminds us, “you’ve got to get both hearts and minds on-board.” Most executives are good at communicating the logic and rationale of the deal. We understand the business and we know the numbers inside and out. Yes, your logic must be compelling and flawless, but that’s typically easier than inspiring and winning hearts and passion. In order to get folks emotionally on-boarded, they have to be and feel respected. They have to be able to preserve their identity of worth and quickly discover that just as in the old ecosystem, they can and will be able to contribute effectively in the new ecosystem. Hearing about the vision, leadership, culture and alignment messages is just not enough for this stage. Folks have to see it, feel it and experience it to make it real. As a result, you’ll need to make this a priority, and be prepared to spend some time, effort and money on this objective. It will be well worth it!
- Stabilize the business. We talk a lot about the “S-3 Model of Integration,” which stands for (among other aspects) focusing the organization and the integration on speed, synergies and stabilizing the business. Once there’s clarity about the vision, drive that home with specific and decisive actions around the essential integration outcomes; quickly confirm and implement expectations for customers and how both organizations will approach customers (post-closing); and by all means, proactively reach out to key talent throughout the organization and at all levels.
This is tough stuff – where the leadership rubber really hits the road. Keep in mind that employee lack of trust, resistance or hostility will slow your M&A integration down in more ways than we can count and will likely severely limit your ability to achieve the deal’s true value proposition. Employee viewpoints like this don’t generally go away by themselves and don’t tend to get better in the short-term. You’ve got to lead your organization through this stuff and the simple answer is that you’ve got to find ways to connect with them in very powerful, personal and intrinsic ways that are far more compelling than any logic could ever be.