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Benefits of Applying Agile Principles during the Final Stages of M&A

How Agile Principles can Improve Workflow, Protect Acquisitions, and Save Company Morale

Why apply Agile principles to M&A Process?

It is predicted that in the next year we will see not only an increase in mergers and acquisitions, but also an increase in the size of these business deals. With more and larger deals taking place, organizations are becoming necessarily smarter about how to navigate the process of

More specifically, Agile principles, stemming from the world of software, are slowly making their way to the forefront of the complex M&A process.

In the corporate world, the style of Agile project management is known for its flexible, yet logical, practices; these practices have proven to improve both business and product value. 

Additionally, these Agile principles, when implemented thoughtfully, thoroughly and correctly, have the power to transform corporate mindsets, pushing teams and workers away from the less fruitful waterfall style workflow to a more purposeful, engaging, and adaptive way of being.

It is not surprising, then, that during the stressful, often uncertain, times of M&A, Agile principles can yield far-reaching benefits. These advantages are particularly evident when Agile principles are adopted during the later phases of M&A.

3 Critical Benefits of Utilizing Agile Principles

1. Elimination of redundant and unnecessary work

Agile project management meeting

Historically, businesses have used a waterfall style work stream; this approach is often demonstrated during all phases of mergers and acquisitions. With waterfall, however, there is often the danger that key points of focus will fall by the wayside over time. We’ve all seen it happen - workers become increasingly focused on completing their to-do lists and lose sight of the big picture. In addition, a waterfall approach can be limiting, missing opportunities to eliminate certain tasks as things change and adapt during the M&A process, which would allow time and attention to be better focused elsewhere.

Agile allows teams to view the M&A process as a living being which, consequently, keeps the emphasis on the team’s priorities. Although much is learned during the discover and planning phases of M&A, new information or “surprises” certainly come up well into the execution and integration phases. This means plans should be kept malleable so they can be shifted as new information is collected. Clearly, this stands in stark contrast to the old way of aggressively mapping everything out only to have aspects of the process develop and transform in unforeseen ways, thus wasting hours of work time.

Ultimately, Agile principles result in more proactive planning and more thoughtful approaches to
successful M&A conclusions.

2. Increased protection of acquisition via improved workflow and transparency

Agile principles for project management

Approximately 70% of M&A deals fail, and this number may be on the low end, which means companies need to implement more effective strategies designed to protect their acquisitions. A primary reason for such failures is the main focus may shift during the M&A process, yet team members fail to adjust and continue to follow pre-planned and designated assignments.

When teams move from a checklist of tasks to a big-picture Agile-view, work life can center around keeping everyone performing at a high level and keeping the acquisition safe. Agile principles have also been known to improve the buyer’s ability to track the progress of the acquisition.Furthermore, improved collaboration successfully aids the protection of the acquisition.

In an Agile organization, meetings and collaborative sessions are often quick (usually daily check-ins approximately 15-20 minutes in length), but come with the expectation that teams will keep stakeholders and other employees up to date in order to improve transparency and extract feedback. This style of workflow allows team members to anticipate potential problems and ask for help before major issues arise.

3. The power to change the “change curve”

Team implementing Agile to M&A deals

Finally, and perhaps most interestingly, Agile has the ability to improve workers’ responses to change and integration and to alter what is often referred to as “the change curve.”

What is the change curve?

Just as individuals react with a wide variety of emotions to shifts in their personal lives, they also follow a pattern of emotional responses to variations in their work lives. Although models of the change curve use slightly different terms, experts agree that when workers are faced with major changes at work, they often travel from denial, to anger, to depression, and then, hopefully, move to stages of acceptance, hope, and commitment. In simpler terms, when changes are implemented or mergers and acquisitions take place, morale often tanks and workers become preoccupied with fears and doubts and productive work suffers.

A business using Agile principles, however, can limit, and perhaps even eliminate, the negative stages of the change curve and increase employee buy-in since in an Agile world small changes are built-in over time. This gradual system of adjustment improves morale and balances risks and rewards. Finally, addressing integration in this thoughtful manner helps companies hold on to key employees, who if left feeling frustrated and upset by the new environment, might otherwise leave, resulting in negative financial consequences.

The Disney-Pixar acquisition is a prime example of Agile principles benefiting the world of M&A

This integration was especially successful because employees did not feel as though their entire worlds were changing in a short period of time; rather changes were implemented slowly and methodically based on their priority ranking. Change is hard, and change when large sums of money and professional careers are on the table is especially difficult - but an Agile way of thinking can make it easier and facilitate adaptation.

Final thoughts

From the above points, it is obvious Agile principles can lead to meaningful collaboration, improved transparency, and, ultimately, can yield a plethora of positive results for businesses. When it comes to the specific realm of M&A, Agile can help stakeholders move away from the traditional thought process that everything needs to be accomplished in 100 days. 

Agile’s way of prioritizing and implementing change will assist with company morale, employee and project manager burn-out, and cost recovery and, therefore, will make for a stronger acquisition. While Agile might not be a panacea for all M&A related obstacles, it is a powerful model that can be successfully applied to M&A. 

More specifically, when it comes to the final stages of M&A, Agile reminds us the ultimate goal is to be profitable and successful - we don’t want to end up as simply another half integrated company.

By Kison Patel and Brandon Nastoupil

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