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Smart Change Practice for Mergers & Acquisitions Short and Long-term Success

6 July 2021

In a recent McKinsey review,[1] it revealed that nearly 79% of large-deal mergers and acquisitions (M&As) were still outperforming years after the M&A had concluded. So, what did the CEOs of those organisations do to achieve this success? There were four practices that successful M&As implemented for long term success with one of the key practices being “institutionalising new ways of working.”

Interestingly, in the same McKinsey review, they included survey results that showed “60 percent of acquirers expressed regret that they did not dedicate more resources to #culture and #changemanagement during the integration process.” In this article, the final part of our M&A series, we expand on how successful M&A deals transition in the short term, and set up for success into the future, specifically how they shift and change in order to implement the new ways of working.

Once the acquisition or merger negotiation is complete, organisations frequently need support through the transition phase for a variety of things, like operational and workforce planning strategies, the implementation of new processes, fostering stronger employee engagement and communication.

Senior leaders often have spent considerable time on negotiating the M&A deal, yet they underestimate the complexity of shifting the combined organisation to new ways of working.  Operating model and cultural changes need to have clear employee expectations and consequences communicated, which in turn needs an extensive communication strategy that meets the needs of your new stakeholders.

Communications is just one area where we at Change2020 can provide you with comprehensive support and expertise in transitioning the business and employees through the M&A process.  We can also work with you to formulate due diligence, bid risk analysis and develop a sound people acquisition strategy, right through to the integration of transition plans following the successful bid. We take due diligence seriously so you can confidently rely on the data you’re using to inform your decisions and reduce risk.

We can also assist you to change critical processes because we are able to recognise that by changing things like approval levels, metrics, and expectations in the capital spend, you can drive more capital to new profitable projects.[2] These are simple process changes that have a big impact but are often neglected as considerations for M&A transition success.

Another key consideration that often does not get due attention but has potential for major post-deal fallout is the people impacted by the new ways of working. We can help you create powerful employment engagement strategies for all levels including executive management. People are your most important asset within the M&A deal and they have the potential to wreak the most havoc, so an investment in helping your people chart a new course through the M&A is a wise one.

Each M&A deal is unique, but they all face common challenges. “Industry changes, post-deal expectations, market downturns, and executive management can make or break a transaction.”[3] Setting an effective change strategy that looks beyond the completion of the deal, will equip organisations for long-term success, well beyond the merger and acquisition negotiation.

[1] https://www.mckinsey.com/business-functions/m-and-a/our-insights/post-close-excellence-in-large-deal-m-and-a?cid=other-eml-alt-mip-mck&hdpid=3ef849c4-1aa2-4b97-8755-63bc0f3d87b7&hctky=12420608&hlkid=dc53caf901494289b405ec062ae56ed7

[2]  https://www.mckinsey.com/business-functions/m-and-a/our-insights/post-close-excellence-in-large-deal-m-and-a?cid=other-eml-alt-mip-mck&hdpid=3ef849c4-1aa2-4b97-8755-63bc0f3d87b7&hctky=12420608&hlkid=dc53caf901494289b405ec062ae56ed7

[3] https://www2.deloitte.com/us/en/pages/mergers-and-acquisitions/articles/merger-and-acquisition-compendium.html

Kerryn Fewster

Kerryn is the Founder and Director of Change 2020. She has consulted extensively in the area of Transition and Transformation. She places emphasis on strategy development and solution implementation to minimise people and operational impacts associated with major change.

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