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Change Management Models for M&A

If you’re not sure what change management is and how it could help your business, you have come to the right place. In this article, we’ll take a closer look at what change management is with specific regards to mergers and acquisitions, and which change management models – because there are different ones – apply during M&A deals.

What is change management?

Change management is a collective term for all of the approaches taken to prepare and support a company through a major change. This might not necessarily be a M&A, it could be a major expansion or a decrease in capacity, for example, but most companies use change management experts when they merge with or acquire another company because most mergers fail due to complexity, and they need someone who is dedicated to seeing the whole project through.

A change manager will help you prepare your staff and your systems for this major change and set you up for success.

But which change management models work best for M&As?

Kotter’s Change Management Model

Kotter’s Change Management Model understands that a big part of change is how your employees react to it, and this model puts them first. That’s why this model should be given serious consideration if you are going through an M&A.

It has eight stages. They are:

  • increase urgency,
  • build the team,
  • build the vision,
  • get things moving,
  • short term goals,
  • incorporate change,
  • keep pushing.

Employees are usually naturally resistant to change and getting them onside through the use of Kotter’s model and an experienced change manager is your absolute best chance of making this work.

Bear in mind, your employees know the ins and outs of your company. Their knowledge means they are well placed to assist you through this change, spotting potential road and stumbling blocks along the way and helping you to sidestep them.

McKinsey 7-S Change Management Model

The McKinsey model works by informing companies of the seven elements they should consider before they consider a major change, and changes do not get any more major than M&As.

The seven elements the McKinsey model focuses on are:

  • strategy,
  • structure
  • systems,
  • shared values,
  • style,
  • staff,
  • skills.

There isn’t so much a workflow to this, it is not a set of instructions. Instead, the McKinsey model gives change managers a series of points to consider throughout the major change, and encourages them to decide on the individual processes for these seven areas before the change takes place.

Kübler-Ross Five Stage Change Management Model

The Kübler-Ross Five Stage Change Management Model is another model that focuses on employees and their importance in Mergers and acquisitions. It teaches employers how to empathise with their employees and guide them through the process. It’s so good that many professionals use it within their own lives as a way of managing major change.

This change management model encourages change managers to consider where employers are on the following scale:

  • denial – where employees are unable to accept change,
  • anger – when employees realise change is happening and are angry about it,
  • bargaining – when employees are working towards getting the best solution for themselves out of the change,
  • depression – when employees show low energy, non commitment and low motivation with regards to the change and their work generally,
  • acceptance – where employees have accepted the change, whether they are excited about it or not.

Knowing where your employees are on this scale and managing them effectively through it is a good way of giving your major change the best chance of success.

Employees are really important. Do not underestimate how much easier your M&A will be if they are happy and on your side.

Lewin’s Change Management Model

This is one of the most popular methods of change management, and consists of three main stages of change; unfreeze, change, and refreeze.

  • Unfreeze: This is the part where employers get prepared for change. Communication with employees is the most important part of this stage. Like other change management models, there is a huge emphasis here on getting your employees onside. Here, change managers would work to overcome resistance.
  • Change: In this stage of the process, the actual change is implemented. But that does not mean you should drop your employee communication. A change manager can help you here.
  • Refreeze: This is the part where the change is accepted and employees go back to their normal jobs. Everything has moved on and employees are working under the new structure. The change should be fully adopted and this stage carries on indefinitely. It is essentially the new way of working.

This model is very easy to understand and is the model most change managers choose to use when guiding a company through an M&A.

Yorkshire Change can help

If you’re thinking of merging with or acquiring a new company, Yorkshire Change can help. To speak to one of our experts, call 0333 090 8710.

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