Change is at the core of mergers and acquisitions (M&As) for the acquirer. Growth is typically a huge part of an M&A, and growth, even when it’s on its own, means change. A change to processes, a change to staff in some cases, and hopefully a change to your revenue.
When businesses embark on big changes, they absolutely should make sure they are managing that change properly, but this is particularly true in the case of M&As, because failing to plan for them properly can result in failure. In fact, an incredible 70-90% of mergers fail.
It’s important to remember that whilst two companies are merging with one mission at hand, there is likely to be a hell of a big difference in the way they operate, and streamlining all of that together is not going to be easy. In fact, it is likely to be the most complicated thing you ever attempted.
When you put it like that, it makes sense to manage this change properly, doesn’t it? In this article, we hope to help you do that.
What are M&A strategies in business?
When we talk about M&A strategy, we are often referring to which parts of the new business we want to merge and how we are going to do that. Companies have many objectives they hope to achieve from an M&A, but usually these are either financial gain or reduction of risk, and it is important to determine which of these you’re aiming for. If it’s both, that is fine too, so long as you don’t need to sacrifice one of these to achieve the other, and as long as you keep them in mind when you’re developing your strategy and reacting to it.
You must keep these two elements of your M&A as the main focus as you move through the change that will lead you to the end result.
What is the role of the change manager in an M&A?
If you are planning an M&A, you’ll need a change manager to help you manage the many changes that need to take place to reach your objectives. That could be a specially trained member of your team, or it could be a professional. We’d recommend the latter. These changes are so incredibly complex, there are so many opportunities for error, and so an experienced and knowledgeable change manager is your best shot at avoiding any errors that might cost you the merger.
The change manager is essentially the project manager, but the project completion is the end result, which, we’d imagine, is full company integration with equal or better return on investment than before. It might take you years to achieve this goal, and there are many, many moving parts, but if you’re really dead set on doing it, your change manager will be the person responsible for making changes happen in both organisations that help you get there.
They’ll change processes, structures, culture, job roles and technology to get you where you need to go. As you can imagine, this often includes managing a lot of different people, some of whom might not be as eager to change things as you are.
Your change manager is the person who will anticipate stumbling blocks in all forms and plan to smash through them.
Strategies for managing change
If you really want to do this alone, here are our key strategies for change.
Planning
Planning is probably the most important part of change. You absolutely must have a complete and proper plan before you decide to buy or merge with another company. How else do you know if what you want to achieve is feasibly possible?
Whoever is managing your change will need to be brought up to speed as early as possible and know when the change will occur, how it is going to take place, and what the want, or need, is for the change.
They’ll need to be part of every part of the planning, and you’ll need to give them time to do what they need to do to work out the logistics of merging.
Whoever is in charge of the change should document all tasks necessary to get to a successful outcome, and create a timeline that fully outlines the outcomes and impacts that come with the change.
Communication
Communication is a key part of any major change. Any communication regarding the merger needs to be transparent and clear. Change is a challenge, and we’re naturally opposed to it as human beings, especially if we think things are about to get complicated or irritating. For that reason, whoever is managing your change should be an expert communicator, who knows how to appease anyone involved, and can spell out the benefits to staff in a really simple manner.
You absolutely must be open to listening to concerns people have about the merger. The temptation is to remain absolutely adamant that this is the best way forward, but if your change manager is telling you it isn’t possible, or if your staff are very upset about it, it is a really good idea to listen to them properly, as they might save you a hell of a lot of time, heartache, and money.
Employee training and participation
Mergers and acquisitions will impact most areas of your business, causing a big shift for many department workers. They might suddenly have to do their jobs in a totally different way, and that might be alarming for lots of people.
It’s a really good idea to work out where you need to upskill your team and look for training that will help them to make the necessary changes they need to make. This way, when you inform your teams that there might be a slight change in their roles, you can tell them in advance that they will receive all necessary training. Remember, one thing is important above all else to your employees, and it is what is in it for them, so communicate this clearly.
Utilising time
You should make sure that your change manager and change management team have as much time as possible to make the changes they need to make for success. Bring them in as early as possible to do the research they need to do, and they will help you eliminate any risk by addressing all potential issues and challenges and making sure they can be overcome.
Keep track
During the transition, it is absolutely crucial to measure and monitor the project and its milestones to make sure you are on track.
Your change management team should keep a log of oversight and implementation for the purpose of recording your journey, which will help with the smooth running of the project and give you something to go back and look over if something goes wrong. Issues can be addressed and improvements can be made.
This log will also give stakeholders a good perspective of what is happening, and help with communication.
Final thoughts
Mergers and acquisitions are a huge deal, and should be treated as such. If you’re thinking of taking part in one, it is a really good idea to get a professional to help you as soon as possible. They’ll help you with every single aspect of your merger to make sure it all goes through smoothly and you get what you want in the end.