11 Mar Use Simple Rules to Drive Complex Work
Note: 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.
Complexity wears people down!
Mergers and Acquisitions (M&A) are seismic life-changing events capable of rocking the very foundations of a company. They not only determine who controls the company but also what direction it will take. M&A is also wildly complex – strategy, legal structures, agreements, financing, communication, valuation, integration; it’s a never-ending set of demands requiring detail, decisions and actions. When it comes to size and complexity, no other corporate activity comes close!
Confronted by both size and complexity, people can easily get confused and somewhat disheartened. This is followed by a reluctant acceptance of the situation with people retreating to their silos; coping as best they can. Complexity wears people down!
People love simplicity…
It was Albert Einstein who was quoted as saying: “Everything should be made as simple as possible, but not simpler”. It’s a great quote, but I did a little research and it’s not exactly what he said but the sentiment is pretty clear: we need to make complex things as simple as they can be without compromising their meaning.
So when it comes to M&A – one of the most complex things in corporate history, we must seek out simplicity wherever whilst keeping meaning and purpose intact.
We need simple rules to drive complex work!
I have personally referred to these rules in the past as: guiding principles, codes of conduct, business maxims or boundary rules. I’m sure you have too. They all do the same thing: simple, direct statements used to provide the contextual understanding, empowerment and direction on what needs to be done. I always go out of my way to get almost everything down to just a handful of statements to guide the course of work. It works! people love it, and suggest others do likewise.
How to create simple rules
1. Understand the vision, purpose and goals. As integration manager, sponsor, or business lead, think about what really matters. With the team and stakeholders in mind answer this:
- What needs to be achieved?:
- How should it be achieved? And the killer question…
- Why is it so important?
2. Identify the barriers. What are the pain points, constraints and bottlenecks that stand in the way of goals? Make sure the rules address these barriers and how people should overcome them.
3. Create the rules. Get a team together and a whiteboard. Write them down. Remember:
- Don’t have too many;
- Make them specific to the situation;
- Make them short, simple and clear;
- Don’t need to call them ‘rules’. I usually call them guiding principles, codes of conduct, protocols or “dos and don’ts”.
4. Test the rules.
- Is there any way they can misinterpreted?;
- are they simple?;
- Do they convey meaning? ;
- Check with others and see if they can find holes, then improve upon them.
I was recently managing a divestiture for a manufacturing firm with operations in North America, Europe and the Far East. The business was core to their operations, nearly 150 years old, and a significant portion of their entire revenue. The carve-out and separation from the rest of the organisation was logistically and technically challenging, and as you’d expect, emotionally charged. Moreover, while the firm were regular acquirers, this was the first divestiture in corporate history!
Challenge. With a multitude of business, technology and people activities to co-ordinate, they needed a guiding hand and mature approach to close the deal and transfer the 150 year old business to the new owners. These sort of deals have a way of creating a lot of legal, financial, business and planning documentation. All-in-all it can get incredibly confusing, bewildering and just plain frustrating.
Task. I got a team (HR, Legal, Finance etc.) together to help me simplify the work ahead. It took effort alright but good fun creating simple irreducible statements that helped define the why, what and how of the divestiture.
Through a number of sessions with the team we came up with a number of simple one-line statements for the following: a) Communication protocols between buyer and seller, b) Buyer/Seller relationship principles c) Boundary rules on what the seller will/won’t do post-deal d) Billing rules: what is/is not permissible billing between buyer/seller e) Top priorities for deal close f) How-to rules on post-deal service delivery g) code of conduct rules on how we work together post-close
Result. The rules became the messaging, mantra, taglines we’d use when communicating to staff, stakeholders and the team. The messages were delivered in town hall sessions, governance meetings and working groups. With both buyer and seller sides struggling with information overload, these simple rules gave meaning, empowerment and direction. It worked.
Simple rules work. People love it. Do likewise!
Hopefully, this particular tip has given you some thought. With this, and other posts in the series, I’m chipping in with my own thoughts and experiences so that all of us professionally involved – CEOs, CFOs, Executives, Product Managers, Consultants and Advisors – get that little bit better next time around. My email is below; happy to discuss this and other posts in further detail.
Thank you for reading!
Senior Consultant, BTD Consulting
References. Apart from the Einstein quote, the inspiration and references I used for this post originally came from a book called “Leveraging the New Infrastructure” by Weill & Broadbent (1998). They introduced the term ‘business maxims‘: short directional statements used to drive change. From then I was always in the habit of creating maxims or principles around any kind of change. More recently a book called “Simple Rules” by Sull & Eisenhardt (2015) was published which also makes for interesting reading.