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Best Practices in Change Management

A holistic framework is the driver, and the tool.

Best Practices Overview:

1. Set up one-on-one interviews and focus group sessions

2. Use surveys to find the big picture

3. Produce a comprehensive report of your findings and present it to stakeholders

4. Be sure the comprehensive report includes calls to action

5. Consider conducting a potential resistance analysis

Let’s be frank: change management is often the neglected child of the M&A family.

What is Change Management?

"Change management is a systematic approach to dealing with the transition or transformation of an organization's goals, processes or technologies. The purpose of change management is to implement strategies for effecting change, controlling change and helping people to adapt to change."

Why is change management often forgotten?

Some might even view change management as trivial when compared with other burdensome tasks of M&A; however, this could not be further from the truth. In fact, poor practices related to change management have long been the achilles heel of mergers and acquisitions.

More specifically, too many stakeholders become so consumed with details related to negotiating deals and navigating diligence that they often become hyper-focused on numbers and forget the importance of planning for integration and instituting change management.

Other stakeholders may fall into the trap of believing HR will handle much of what is required for change management...and herein lies the ultimate problem.

Consequently, the first rule related to change management best practices is to make change management its own role.

Some of the benefits of having a change management expert on your M&A team are: the buyer gains valuable information about the target company (which can help maximize potential deal value), the target company feels cared for and employee morale/buy-in improves, and secrets are revealed (I.e. information comes to light that current leadership may be totally unaware of ) - all of which can also help avoid major and costly problems.

Once you have recognized the need for change management leadership on your M&A team, the following are proven best practices for him/her to follow when working toward a faster, smoother integration. As change management expert Dawn White says, when it comes to change management “methodology is the driver.”

change management practices

Change management best practices

1. Set up one-on-one interviews and focus group sessions with employees from the target company

Face time with target company employees is valuable for several reasons.

First, target company employees will appreciate being heard, which will set the groundwork for a stronger integration.

Second, employees will help paint a picture of everything from company management styles, to workflow, to ethics, and possibly even to potential problems - just be sure to interview a wide variety of employees.

2. Use surveys to flesh out the big picture

Using surveys is nothing new in the world of soliciting employee feedback; however, carefully crafted survey questions can help you gather information employees may not want to reveal in a face-to- face conversation and/or build on topics that came to light in the interviews.

For example, if employee morale/socialization came up multiple times in interviews, you might craft a survey question that gets into the specifics of employee morale and socialization (i.e. “How often do you engage with your co-workers outside of work?…” or  “How often do you believe nepotism occurs…?” ).

Surveys allow for new information to surface, but also give you the power to solicit the type of information you believe will be most valuable based on previous observations and findings.

M&A change management

3. Produce a comprehensive report of your findings and present it to stakeholders

The data gathered from interviews and surveys becomes valuable when it is analyzed and shared with stakeholders.

The information gathered should be examined with a specific eye for: gaps in knowledge (i.e. the target company may not know how to use certain technology or may not have the training,  leadership or management style of the acquiring company), issues/conflicts related to values and ethics, and communication barriers.

After the above information is disclosed, the report could  include simple statements, such as “The acquiring company is excited about _______ and nervous about ___________.”

These statements will help everyone focus on the positives as well as bring attention to the potentially largest pitfalls.

M&A practices for change management

4. Be sure the above report includes calls to action

Within the report, the change management expert must include action plans.

Better yet, these action plans should be personalized, meaning they should identify the specific person and/or group responsible for completing the action, as well as a specific due date, in order to create momentum and accountability. Similarly, the report should help drive company changes and dictate needed employee trainings and workshops.

research analysis report

5. Consider conducting a potential resistance analysis

A potential resistance analysis will allow both the acquiring company and the target company to see what is lurking beneath the surface.

Uncovering what employees on each side are nervous about, how they may be unprepared for the change, and what they know, and do not know, about each other is incredibly beneficial.

When this information comes to light and is discussed,  it can then be addressed and negatives mitigated. Additionally, sharing this information with both sides of the table creates transparency.

change management climate survey

6. After approximately 6 months, conduct a climate survey and present findings to executives

The above leg work certainly helps to make the integration process smoother, but the change management resources work should not end here - the process is ongoing. Experts recommend that around the six month mark, employees should be given a climate survey.

Again, the data collected should be analyzed and the feedback should be delivered in a report to upper level management. This will allow the company’s leadership to take a look at what is going well and what still needs to be addressed, or worked on further, in order for the integration process to continue to move in the right direction.  

Many stakeholders are fooled into overlooking the power of strong change management and integration practices. Indeed, sometimes when conducting smaller deals, the buy-side can get away with sloppier integration methods and disregarding the important leg work related to proper change management.  

However, as deals get larger, ignoring change management will certainly lead to integration troubles. The crux of the matter is big deals demand robust change management practices.

By Dawn White and Kison Patel

Useful Links

M&A Integration Software

What is a Corporate Development Tool?

Corporate development software is one of the best ways to help companies manage deal pipelines efficiently and effectively. In M&A deals, there is frequently lots of research and due diligence involved, and large amounts of information to accumulate very quickly.

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