Make M&A that “Window of Opportunity”

Make M&A that “Window of Opportunity”

Driving Transformation through M&A: Tip 3 of 10

This is part of a series of posts about driving transformation through Mergers and Acquisitions (M&A). Here’s my first post. This summarises the M&A challenge and the ten recommendations I have for success. If you haven’t seen it then take a look.

Leading change is hard!

There’s a fabulous quote which you may have seen before.

“There is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things…”

Many will be familiar with this quote from Machiavelli’s book ‘The Prince‘. It’s a great quote from what must be one of the first how-to books ever published on leading change. Would you believe; it was published nearly 500 years ago!

Just 23 years ago, when studying Change Management as part of my MBA, I remember John Kotter’s HBR article Leading Change: Why Transformation Efforts Fail to be similarly brutal in its honesty. It’s the kind of article that really makes you sit up and take notice.

For change to occur there needs to be a sense of urgency

It’s the first point from Kotters article : ‘The need to create a sense of urgency’, I found to be particularly striking. To sum up in a single sentence, he says there needs to be a crisis (or opportunity) of some kind that turns the current status quo into a dangerous proposition.

The status quo must become a dangerous proposition 

Few initiatives can change a company more visibly and dramatically than an acquisition. It presents the kind of situation and a sense of urgency where people really take notice. With defenses down and apprehensions up, it represents a unique, almost palpable “window of opportunity” to bring about the kind of change that simply couldn’t be achieved under normal circumstances.

It’s a period that brings both excitement and anticipation on what’s possible. During this time of cultural unfreezing, stakeholders and staff are quite ready to change and adapt to new and different ways of working. In fact, many will welcome the opportunity and gladly participate, helping out wherever they can. Moreover, people will be more ready to believe and act in ways that support the new direction and become part of that change.

M&A creates a “Window of Opportunity” 

Take advantage of the energy

Organisations therefore need to be ready to ‘seize the day’ by planning ahead of time and selectively tackling the transformative opportunities for long term value as soon as practicable. These opportunities may be connected to the acquisition; they could also be other transformation initiatives just waiting for that right moment in time. Fortune favours those leaders who have the courage to take advantage of this early energy.

Carpe diem – Seize the day! 

The potential is huge but equally so can be the complexity and sheer volume of work. To avoid the entire exercise coming to a grinding halt, both integration and transformation work will need to be carefully selected and interspersed so that staff and stakeholders don’t come under too much duress.

While certainly exciting, none of this is easy. And unfortunately, plenty of organisations would rather not ‘seize the day’, and instead take the more traditional path: get the deal done, complete the integration basics, and do the more transformative work at some later stage. Executives (and even some advisors) will defend this approach by saying it’s financially and operationally less risky to do it this way.

However, more experienced M&A specialists know that, despite what others might say, integration doesn’t always lead to transformation. This “window of opportunity” for bold and ambitious action may be brief indeed. Once people start slipping back to the demands of daily business, the window then closes. Once this happens, delivering any kind of transformational change becomes very hard indeed.

Integration doesn’t always lead to transformation

There’s no doubt; M&A integration is hard. Transformational M&A integration is harder yet still. However, this “window of opportunity” represents a unique time in corporate history to achieve unique change. For success, it requires experienced people capable of applying the kind of intellectual rigour, gutsy determination, and leadership skills to ‘seize the day’!

Hopefully, this particular tip has given you some thought. As an industry veteran, I’ve been working on transformational deals for several years, and as is often the case, it’s the softer side of things – people, leadership and culture, that really matter. The process will naturally follow when you get these right. My email is below; happy to discuss this and other posts in further detail.

Thank you for reading!

Regards,

Toby

Senior consultant, BTD Consulting

toby.tester@btd.consulting