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Article -> Send the Right Acquisition Signals

Date Added: March 2007

Power struggles and politics are enemies of a successful acquisition and integration. Yet, without clear direction from integration leaders, people are misdirected by empty messages. Before, during, and after acquisition, an integration team must root itself in the messages it sends. It must not only promote the new organization; it must become it.
 
The consistency in messaging from the top team resonates in three categories: leader appointments, top team alignment, and clarity about roles.
 
Appointment of Leaders. For its people and other stakeholders within the organization, time passes slowly as the acquisition drama unfolds. Because the appointment of leaders sends important clues as to where the organization is headed and how it’s going to get there, swift action is vital. In a study of 161 acquisitions, the early appointment of a top team was a strong predictor of the long-term performance of the combined organization.1
 
That is not to say speed should prevail over good business sense. Positioning people as change leaders without knowledge or experience invites them – and the new organization – to fail. In contrast, leadership teams equipped with process training and integration tools have a higher chance of success.
 
A common pitfall is the temptation to retain the original characteristics of the separate organizations. Since full integration is the goal, cooperation must yield to alignment. Without the integration of cultures, the organization would eventually suffer compatibility problems that long since should have been resolved.
 
At times, leaders face the likelihood that colleagues, even those who have been top performers, may lose their jobs. These decisions are best reached and acted upon promptly. John McGrath, CEO of Grand Metropolitan during a 1997 integration with Guinness to become Diageo, says, “Just be completely ruthless in your decisions on people. Make those decisions quickly, and then treat the people decently.”2
 
Alignment of Top Team. True alignment of the change team is reached when its members speak of the acquisition and integration as our deal – not your deal or my deal. To achieve this, CEOs often require top executives to hold open debate to reach consensus. Once united, the focus on external business (customers, competitors, partners, regulators, etc.) strengthens the team in order to move beyond common internal issues.
 
It takes discipline to reach this point without a crisis. While some team building may be beneficial, choose techniques approved by leaders on both sides. What is constructive to one leader may be a waste of time to another.
 
Clarity of Roles. At a priority level, top team members must also define their roles to individually contribute to the future of the new organization. For a successful integration, each member must collaborate to balance the work of the team. For continuous development of the organization’s people, the lessons learned through the integration must be effectively captured for the next leader.
 
Frequently, events leading up to an acquisition divert attention from an organization’s intentional communication. Through the appointment of leaders, alignment of the top team, and clarity of roles, the integration team improves its chance of acquisition and integration success by sending clear messages.
 
1Fubini, David G., Price, Colin, and Zollo, Maurizio. “Successful Mergers Start At the Top.” McKinsey Quarterly, November 2006. http://www.mckinseyquarterly.com
 
2Ibid.
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