Peer support assists in the decision-making skills for leaders to build their vision and grow
Between 70% to 90% of mergers and acquisitions will ultimately fail. Managing a business merger requires a delicate and experienced hand. Not only do you need to consider the direction and fundamentals of both organisations, but you also need to consider culture, strategy, and vision. Mergers tend to be particularly hard on staff members, both because it is a tumultuous time and because the future may feel uncertain — and this is where true leadership becomes essential.
Here’s how Rob Ashley, advisory principal with PricewaterhouseCoopers and a member of TEC, has been able to counter these challenges and achieve tremendous success.
Understand the importance of decision-making
A business, at its core, is really just a series of decisions. Not every decision must be perfect — what is important is that the decision is made. It’s estimated that the average adult makes approximately 35,000 decisions per day, and each of these decisions carry with them consequences and direction.
Business owners will be called upon to make a tremendous number of decisions throughout the business acquisitions process. These range from the dissolution of certain corporate assets to the retention of human resources. Each of these decisions impact the business itself, its employees, and its clientele. And with thousands upon thousands of decisions occurring, it’s important that a leader not get bogged down.
Rob Ashley was able to create a comprehensive planning process, which covered both an internal focus on the organisation and an external client engagement strategy. Through this planning process, Ashley was able to control all elements of the merger and facilitate decision-making processes. Though not every decision may have been perfect, they were made quickly and competently, running like a well-oiled machine.
Alignment of strategy
Companies need to be prepared to align their goals in terms of their values and their client base if they are to work together.
Why do mergers so frequently fail? If it was just about financial due diligence, one would expect most business mergers to be a success. But businesses are more than just what they appear to be on paper: they are a collection of strategies and goals. A business has its own direction and culture, and compatibility is very important. When polled, 33% to 50% of respondents cited cultural differences as the leading issue with a merger.
When businesses are aligned in terms of strategies, goals, and culture, they can readily work towards a singular destination. When businesses are not aligned, they begin to pull apart at the seams — and it is the human element that is lost.
Recognising this, Rob Ashley placed a premium on communication and collaboration. He understood the need to engage staff members of both teams, alongside their client base, and to ensure that everyone involved was working together towards the same goals.
Maintain a consistency of service
Most mergers will lead to an increase in services. But though this may sound like a benefit, it can actually be detrimental. Ultimately, it will lead to the dilution of the company’s branding. In order to support a company culture and the comfort of both employees and clientele, it’s important to maintain consistency of service. That means that as services are added, they also need to be folded into the new company mission that both businesses now share.
In order to improve upon employee alignment, maintain happiness, and motivate employees, it is necessary to ensure that as much of the business as possible remain consistent. But it’s also important not to overestimate the value of synergies.
Rob Ashley found that the increase in services was not only a benefit to the company’s clientele, but also the company’s own access to their now expanded talent pool. At the same time, conscientious work had to be done to ensure that the company’s offerings remained consistent with its mission statement and that the value of these benefits was not overestimated.
Enhance your personal life
Since joining TEC, Rob Ashley was able to find a community of like-minded people that he could connect with.
As exciting as a merger may be, it is equally mentally and emotionally taxing. As a leader, it’s easy to become absorbed by your work and lose touch with the outside world. Though you may not feel it, those around you do; everything you do affects your end work product. Diet, sleep, and exercise can all have an adverse impact on your decision-making skills. You are the foundation of your brand — and because of this, you need to take care of yourself first.
Harvard Business Review explored why good leaders can sometimes make bad decisions. HBR found that bad judgments often occur due to red flag conditions, such as ‘the presence of inappropriate self-interest’, ‘the presence of distorting attachments’, and the ‘presence of misleading memories’. All of these are emotionally influenced conditions that can occur when mood is not properly managed.
As an experienced business professional, Rob Ashley realised that his personal health and mood could impact the way that he handled his merger. So Rob Ashley sought TEC.
Managing mergers successfully
Your business doesn’t have to be one of the 90% of businesses that fail through a merger; it can be one of the 10% that ascends to far greater heights. All you need to do is be able to properly manage those four key aspects of the transition.
Mergers and acquisitions involve a lot of moving parts. Decision-making, strategies, services, and even your personal health all need to be combined into a sum that is greater than each part. When anything is out of sync, things can fall apart — and they often do.
Managing mergers is not a skill that you can develop overnight. It’s something that requires experience, expertise, and guidance. If you want to learn more about how businesses such as PricewaterhouseCoopers (and experts such as Rob Ashley) have been able to build their vision and grow, get in touch with TEC today.