Capture the Value of the Deal
Growth is exhilarating. From mergers and acquisitions to partnerships and joint ventures, few things in the business world get the adrenaline pumping like putting all the pieces of a deal together, getting them aligned and driving it across the finish line.
To do it right it’s necessary to gather all the “right” pieces. Think holistically and inclusively about all the folks at the table during due diligence. It’s logical to have the visionary CEO leading the synergistic analysis, the CFO evaluating the value and the COO optimizing the operational flow. However, it’s mission critical to include the CHRO who assesses the depth and breadth of talent, and the CMO who ensures the value is lived internally and delivered externally. The reality is that integration of “the people” within the organizations involved — and the way you manage those employees — has everything to do with whether or not you ultimately capture value from the deal. Otherwise, you’ll end up wasting inordinate amounts of energy selling and reselling the vision to employees, motivating them, training, retooling and otherwise rolling the boulder up the hill.
Everyone needs to be on the same page. Cameron Herold of BackPocket COO said it best, “Your employees are human beings, too. They are prone to act out if they feel they aren’t being heard or respected. Slacking off, insubordination, outright sabotage — hell hath no fury like an employee ignored.” That about sums up the concept and importance of alignment during periods of organizational change.
But where is the finish line? Without a doubt it’s when the value of the deal is realized. Consider all the resources that are deployed in identifying the organizational SWOT. Work plans are generated along with a budget for executing those plans and then teams are assigned to mitigate the organizational risk around integration. There’s a fair amount of time, talent and treasure wrapped into getting that term sheet closed. In truth, the closing of the term sheet is merely the point where the referee has blown the whistle and it’s “game on.”
So, how long does the game last? Well if you go by three of the biggest and best at realizing the value of the deal (Boeing, IBM and GE Energy), they’ll tell you it can last for 18 to 24 months.
Increasingly, we are finding ourselves at the table during these organizational changes and leadership is actively seeking more of a pull system to optimize integration. More and more, the c-suite recognizes there’s something around the talent and cultural aspects of the deal, and they’re more willing to seek out support to realize value in these areas. Change is good.
I’d be interested to hear your insights regarding organizational change – insight you may have, questions or maybe you’re on the verge and need some guidance. I’d love to hear it.