12 Key Steps to Managing Change during the Acquisition Process

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Author(s): Walter Sonyi is executive vice president of OI Partners-Gateway International Group (New Jersey)

When a company is acquired, there are a number of behavioral patterns that are wise for managers in the company to adopt. They are helpful not only to the smooth integration of the two businesses, but to the executives themselves. Adherence to these standards of conduct and rules of action will assist in identifying those managers whose contributions are likely to be of most value to the organization in the long term.

Commonly, managers who ignore, refute or behave counter to these guidelines are likely to be less successful in the new business combination, both in terms of their own contributions and in terms of the likely development of their future career growth.

These guidelines (below) are the product of a great deal of practical, first-hand experience, as well as being confirmed by various studies of successful post-acquisition management situations. They include contributions from a number of consultants and authors who specialize in this field.

MANAGING CHANGE The acquisition process is a management of change process. As a manager, you are already familiar with the fact that all businesses are continually changing to maintain and improve their competitive position and profit performance. Your role as a manager includes the responsibility to initiate change and ensure that changes are managed and implemented in a timely and effective manner. There are likely to be more changes than you are accustomed to. The changes may be more rapid, more extensive, and have a more far-reaching impact than before.

In this environment, it is appropriate to consider that you have a golden opportunity to use and develop your own skills as an effective manager of change, to provide input to the possible future direction of the business, and to avail yourself of the opportunity to call into question past practices and old decisions which you believe may not have served your company's interests as effectively as they could have.

Do not be alarmed or despondent if your suggestions are not necessarily well received immediately. The new management themselves need time to make decisions. Well thought-out proposals based on analysis, with a commitment to making demonstrable improvements in results, are usually given serious consideration. Pet projects, bright ideas and other similar distractions will often be ignored or left to the side.

1. BE ACTIVE One of the most common mistakes managers can make in an acquired company is the attempt to become invisible--to "lie low." The new management team badly needs people in the company who will actively help them in the integration process and who are willing to show their own commitment to making it work. Volunteers who make a point of showing their willingness to help are usually very welcome, as opposed to managers who adopt a passive role.

2. BE PUBLIC A manager whose words and deeds clearly demonstrate his personal positive attitude to the acquisition will most certainly influence both his subordinates and his peer group. Instead of joining in the speculative, helpless and passive pursuit of wondering what will happen next, it is far more effective to make positive statements such as "If we work at it, this could be the best thing that ever happened to our company."

3. BE ACCESSIBLE This is no time to take a vacation, go to the golf course or change your work habits. Come in a little earlier; be around as much as possible. You are in control, at work, and a positive force for success of the company. It is important that you are available--to the new management, to your peer group, and to your own subordinates and their employees.

4. BE POSITIVE You and your colleagues have a lot of work to do, and that is still what you are all being paid to do. Remind your people that there are tasks to be accomplished just like before, and that it is in the nature of things that those who stay focused and perform will do better than if they lose concentration, goof off or spend their time daydreaming. It is often helpful to increase performance expectations slightly, to create a little extra positive tension to ensure people are focused on their jobs and have less time than usual for gossip and speculation.

6. JAM THE RUMOR MILL You can expect that countless rumors about possible changes will surface. It is helpful to ensure you are tapping all the sources you can access, because the more rumors you are aware of, the more effective you can be in stopping or de-emphasizing them. Members of the administrative staff are often a good source of rumors, because they see executives coming and going, schedule meetings, make phone calls, arrange travel plans and type memos, often without really knowing what is happening.

There are a number of rumor-stalling techniques, which can be used depending on the circumstances: * Point out that we all have work to do, and re-focus energies on productive activity. * Make a joke out of the rumor, particularly if it can be reasonably demonstrated to be un-business like. * Point out that the rumor is not consistent with what the new management has either said or done so far to date. * Point out that the rumor actually has no personal consequences for the people you are talking with, if you are confident this is the case. * DO NOT suggest you have knowledge that a rumor is untrue if you do not know--you will only replace the existing rumor with a new, attributable one. * Point out that the rumor is premature, that the new management has not had time to make these kinds of decisions.

7. CONFIDENTIALITY The best way to avoid changes becoming known before they should be announced is to be very strict about confidentiality. This means reducing written and phone communications to the minimum, and using off-site meetings wherever practical. Brief your administrative assistant on the sensitivity of confidential information, ask him or her to sign a non-disclosure agreement.

8. MOTIVATION An acquisition creates one of the most unstable and unsettling working environments of any event in corporate life. This almost always results in "post-merger drift" and "merger syndrome" unless managers act to deal with it. Drift is a pervasive tendency to do nothing very much, to wait and see what happens, avoid decisions, lay low and take no risks. This contributes to a loss of continuity of operations, lower momentum in the marketplace and eventual loss of market share and lower profitability.

However, the discontinuity represented by an acquisition also can make employees more receptive to new ways of doing things if the manager takes advantage of the situation and does not become inert and passive.

Speed is of the essence. "Drift" can start within hours of the announcement, and the longer the organization drifts, the harder it is to change what are becoming new habits and accepted practices.

If you act within hours or days to focus your peoples' energies on work which needs to get done, you often can be effective in increasing productivity, output and cost effectiveness.

Please understand and believe that all of our experience and research points conclusively to the fact that in the absence of specific, timely corrective action by management, performance in the organization will decline after the acquisition.

Doing nothing actually means accepting deteriorating job performance. Accept your responsibility as a manager for the performance of the people who work for you, and focus their energies on even higher standards of performance.

For you to personally sustain your personal level of job performance from the days before the acquisition, you need to redouble your efforts to motivate your people, using whatever techniques have been successful for that group of people in the past.

9. PROCLAMATIONS It is recommended that you avoid making sweeping statements about the acquisition, even if they are positive. Unless you are fully confident that what you are proclaiming is factually correct, and unless you have been authorized to communicate in this way, it is always a serious risk that later events will turn out to challenge your credibility, or even completely destroy it.

It is always flattering to the ego to appear to be knowledgeable. But it can be very damaging to pretend to be knowledgeable in a changing situation when you are really not. The change process itself makes your pretense less likely to stand up in the bright light of day.

10. COMMITMENTS A major element of being a competent manager is the ability to make commitments, followed by an ability to live up to them, particularly in your relationship with your subordinates.

In the period following an acquisition, you may become much less clear about how far you can make commitments, and whether you will be able to deliver on commitments you have already made.

Rather than make commitments you may not be able to keep, you should avoid any commitments which are not of critical short-term significance, postpone others, and go back to your own manager for guidance on what you may or may not commit to.

Be particularly sensitive to the importance of the issue for the employee concerned. If it is important enough to be a major distraction from that person's ability to deliver the required level of job performance, you need to use your resources to try to get a resolution.

11. ORGANIZATIONAL CHANGE It is highly likely there will be organizational changes, and these are sometimes very extensive. Your ability to influence any changes will depend not only on how you are perceived in the parent company, but also on your understanding of the new parent, its goals, methods, business objectives and style of decision making. Also, the values and priorities the parent's managers have in their way of doing business needs to be understood.

It is important for you to get to know the new management personally and to give them the opportunity to get to know you. Develop an informed view of how they approach the decision-making process, how their values and attitude toward employees compares to your own, and what their management philosophies are.

Remember that they have grown up in their own corporate environment, and they are likely to feel comfortable with it. They also quite likely will believe it is either totally or largely appropriate for your company as well, even if this is a purely judgmental view based on no analysis or understanding of how they may differ.

If you are to be an effective manager of change, you have to understand their perspective, so that differences can be dealt with dispassionately. If your reaction to their approach to business is uninformed, defensive or reactive, you are unlikely to get much attention. If you have a genuine understanding of their perspective, and the underlying reasons for their approach, you have an opportunity to develop a balance, which can be a great benefit to all concerned.

12. LEAD BY EXAMPLE Your own personal behavior will be a role model for others in your organization. If you join in a general tendency towards apathy, playing "wait and see," start coming in late, or decide it's time to improve your golf game, those around you will tend to follow your example.

Professional managers, who deal with issues, confront problems and manage for results do best in post-acquisition situations, just as they do best under most other business conditions.

To continue to be professional and demonstrably effective is your best course of action, in both the interests of your new employer and your own career growth. In opting to do nothing in an effort to avoid doing wrong, critical mistakes can be made.

Walter Sonyi is executive vice president of OI Partners-Gateway International Group (New Jersey). He has more than 30 years experience, both domestic and international, in career management. He can be reached at 800-376-8176.

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