Let’s start with what we mean by change management. Is it something we need to invest time and money in? To answer the above question, we need to understand the impact changes makes in people’s lives. Let’s look at the two scenarios below and identify which one is better.
Scenario 1: You are flying from Asia to US with a short layover at UK. You have started your journey and have landed in UK and while going to the gate to board the flight to US, you find out that the flight has been cancelled since the route was no longer strategically viable for the airline (decision made 1 month ago by the airline). You have not been provided any alternative and have not even been told about the cancellation until you are in UK trying to find the boarding gate. You run around and try to argue with airline officials who themselves are not at fault but are trying their best to do the firefighting. After running around for hours you manage to get yourself booked onto an alternate flight with another airline for the next day at a higher price and then have to look for a hotel to spend the night.
Scenario 2: You are flying from Asia to US via UK and one month before your flight, you receive a communication from the airline apologizing and explaining that they are stopping their UK to US flights since it is not viable for them and that they provide a few alternate options at no additional cost. You choose an alternate option and you get a confirmation on the same. On the day of your travel, you travel smoothly to US using the alternate itinerary.
In scenario 1 & 2 which do you think will have a positive impression on the customer? Which of the scenario would help you retain customers? Which scenario would be less painful for your employees?
Would you not say scenario 2. The problem statement for the airline was the same, then what was done differently. The answer to that would be Change Management. In scenario 2, the airline analyzed the impact of the proposed change of cancelling the UK to US route. It identified who would be impacted and promptly communicated it in such a manner to reduce the inconvenience of the change.
How does this apply to the world of M&A Integration? Right from the time the buyer and sellers engage in talks, and sometimes even before, we need to start with change management exercise. Looking at the seller’s side, they need to get their workforce aligned with the need to sell and assurance that the employees career and growth are leadership’s key focus. Since key people from the seller’s side will have to get involved during the due-diligence and would know about the possible transaction and we would not want them to panic and start resigning. Most often, M&A happens for talent and if the talent leave, the transaction might fail even before it begins.
Looking at the buyer’s side, they need to first set some expectations within their current organization and then welcome the new acquisition into their fold, making them feel part of the family. The initial days are the most uncertain for the acquired entity associates, since they do not know what their future holds and the uncertainty leads to lot of stress and panic if left unaddressed. During the integration journey, more and more changes would need to be introduced and if not addressed properly, it would leave a bad taste in the associate’s experience.
How can we ensure we give a positive experience to the new associates and how can we ensure the change has a constructive effect and not a destructive one. Few steps I feel might help achieve a positive outcome.
- Identify key stakeholder groups and try understanding their inclination or motivation. We might need to tackle some stakeholder groups differently.
- Align leaderships; leadership on both buyer and seller should be aligned on the future path together. If not, we might get into conflicts over every decision.
- Jointly craft a shared vision statement and share it with both organizations
- Identify change elements and impact on various stakeholder groups
- Identify and create a group of change champions within the acquired company
- Consult with change champions on the change elements and how the associates will perceive the change, validate the impact analyzes done earlier
- Define and execute on the communication and training strategy together with the change champions
The change champions would ideally become your change evangelists and help positively influence associate experience. Hence, a good change champion would exhibit leadership qualities.
There are many more facets to change management; I would like to hear your point of view as well. What has worked for you?
