Most every acquiring company today recognizes the importance of culture and people and builds analysis of those elements into their due diligence and integration processes. However, the percentage of companies still showing a poor return on the investment has not significantly improved and the horror stories continue. So if people and culture are not the problem, what is? Is there something still missing?
CHANGE: THE MISSING VARIABLE
While attention to people and culture is important, companies determined to grow by merger or acquisition are not paying enough attention to the fact that this is a major change for both organizations. If the acquiring organization has been thoughtful about people and culture and still experiences conflict and resistance in the integration, perhaps the reason is that this is a change. The solution: change management.
You have heard this before: change management is critical. Many of you are trying to address it. Too many organizations, however, believe change management is communication or that the attention they are paying to culture and people is change management. The truth is these are all integral parts of the change management process. Change process: those are the key words. Managing change is a systematic process that requires moving through a series of action steps to predict and address the risk caused by potential resistance. It is a disciplined process that must follow a logical set of actions.
Follows these five steps – twice! – during a merger or acquisition: once during the due diligence process and once in the integration process.
- Identify the change: Determine the major issues in each stage of change, including the current state, the desired state and the delta state
- Prepare to change: Identify and assess the key stakeholders, including the sponsors, change agents and targets, and assess the degree of risk and the cost of change
- Plan the change: Design the change systems, including the communications, learning and reward system
- Implement the change: Build the change strategies and tactics into an overall change plan
- Sustain the change: Watch, measure and adapt as the change is changing
Merger and acquisition teams who recognize the full spectrum of the change process have a significantly greater chance at a successful integration.