Change Management Scenarios In M&A Contexts

🚨 𝟲𝟬% 𝗼𝗳 𝗳𝗶𝗻𝗮𝗻𝗰𝗲 𝘁𝗿𝗮𝗻𝘀𝗳𝗼𝗿𝗺𝗮𝘁𝗶𝗼𝗻𝘀 𝗙𝗔𝗜𝗟 𝗮𝗳𝘁𝗲𝗿 𝗣𝗘 𝗮𝗰𝗾𝘂𝗶𝘀𝗶𝘁𝗶𝗼𝗻. 𝗡𝗼𝘁 𝗯𝗲𝗰𝗮𝘂𝘀𝗲 𝗼𝗳 𝘁𝗲𝗰𝗵𝗻𝗼𝗹𝗼𝗴𝘆. Because CFOs forget that spreadsheets don't resist change—people do. Your AP clerk isn't afraid of new software. She's afraid of becoming irrelevant. Your controller isn't resisting month-end acceleration. He's overwhelmed by expectations he doesn't understand. The 𝗔𝗗𝗞𝗔𝗥 framework is the tool that I recommend to use when integrating the finance/accounting for an acquisition. ✅ 𝗔𝗪𝗔𝗥𝗘𝗡𝗘𝗦𝗦: "Why must we change?" (Not just "the PE firm says so") ✅ 𝗗𝗘𝗦𝗜𝗥𝗘: "What's in it for me personally?" ✅ 𝗞𝗡𝗢𝗪𝗟𝗘𝗗𝗚𝗘: Role-specific skill building ✅ 𝗔𝗕𝗜𝗟𝗜𝗧𝗬: Tools and authority to actually perform ✅ 𝗥𝗘𝗜𝗡𝗙𝗢𝗥𝗖𝗘𝗠𝗘𝗡𝗧: Systems that sustain new behaviors One family manufacturer that I integrated into a PE portfolio: 15-day close to 5-day close in 6 months. Zero turnover. 𝗧𝗵𝗲 𝗱𝗶𝗳𝗳𝗲𝗿𝗲𝗻𝗰𝗲? 𝗧𝗿𝗲𝗮𝘁𝗶𝗻𝗴 𝗽𝗲𝗼𝗽𝗹𝗲 𝗹𝗶𝗸𝗲 𝗵𝘂𝗺𝗮𝗻𝘀, 𝗻𝗼𝘁 𝗼𝗯𝘀𝘁𝗮𝗰𝗹𝗲𝘀. 𝗖𝗙𝗢𝘀 𝗮𝗻𝗱 𝗣𝗘 𝗽𝗮𝗿𝘁𝗻𝗲𝗿𝘀: 𝗬𝗼𝘂𝗿 𝗻𝗲𝘅𝘁 𝗱𝗲𝗮𝗹'𝘀 𝘀𝘂𝗰𝗰𝗲𝘀𝘀 𝗱𝗲𝗽𝗲𝗻𝗱𝘀 𝗺𝗼𝗿𝗲 𝗼𝗻 𝗰𝗵𝗮𝗻𝗴𝗲 𝗺𝗮𝗻𝗮𝗴𝗲𝗺𝗲𝗻𝘁 𝘁𝗵𝗮𝗻 𝗱𝘂𝗲 𝗱𝗶𝗹𝗶𝗴𝗲𝗻𝗰𝗲. Full framework in article ⬇️ #PrivateEquity #CFO #FinanceTransformation #ChangeManagement

When doing any M&A - are you purchasing the intellectual property or the business? Because if you're buying ANYTHING more than the intellectual property, trust is at the core of the integration. You can (maybe) integrate systems in 90 days. Integrating trust takes a whole lot longer. One of the most overlooked risks in M&A? The human one. I’ve been through multiple integrations, due diligence cycles, and post-close transitions. And I can tell you: spreadsheets may win the deal, but it's trust, communication, and culture that determine whether the value actually materializes. Circling back to one of my previous posts - it is also making sure the "say" and the "do" match - ALL the way back to the initial due diligence. Here's what often gets missed: 🔹 People interpret silence as threat - and in the absence of information will create their own story - which is often significantly worse than the truth! Communication isn't just a courtesy—it's risk mitigation. 🔹 Culture is an operating system. Every team has embedded ways of working. If you force alignment without understanding those patterns, you may inadvertently shut down what made them successful in the first place. 🔹 Integration is emotional. Titles shift. Power moves. Identities blur. Benefits change. The process isn’t just technical—it’s deeply personal. And without a strategy for that, and a proactive change plan (that is HEAVY on the communication) you’re leaving value on the table. The most successful integrations I’ve supported had three things in common: 🧩 A shared leadership narrative grounded in purpose and clarity. 🧩 Early identification of cultural hotspots—not just red flags, but areas of pride and strength. Coupled with the understanding that the acquired organization may often have things to teach the buying organization! 🧩 A deliberate, empathetic, and transparent approach to change management—because speed without humanity breeds resistance. M&A is an incredible opportunity to reset, refocus, and rebuild stronger. But only if the people inside the business believe they have a future in the new version. The real synergy? It’s not just in the balance sheet. It’s in the belief system. I'd love to hear from others—what’s something you’ve seen work (or not) when two organizations become one?

𝗧𝗵𝗲 𝗮𝗹𝗹-𝘁𝗼𝗼-𝗳𝗮𝗺𝗶𝗹𝗶𝗮𝗿 𝗠&𝗔 𝘀𝘆𝗻𝗲𝗿𝗴𝘆 𝘄𝗮𝘁𝗲𝗿𝗳𝗮𝗹𝗹: 𝗪𝗵𝘆 𝗽𝗿𝗲𝘀𝗲𝗿𝘃𝗶𝗻𝗴 𝘃𝗮𝗹𝘂𝗲 𝗺𝗮𝘁𝘁𝗲𝗿𝘀! In M&A, synergies have become synonymous with deal success. The classic waterfall in the deal thesis lays out cost reductions, revenue enhancement and other value drivers in a sequence. But while all eyes are on delivering the promised synergies, the often overlooked element is "preserving value". Often times in post-merger integration scenarios, value destruction can happen just as easily as value creation. This is particularly true when: - Key employees are pulled away from their day-to-day roles to support integration activities - Customer service levels drop due to changes in systems or processes - Operational disruptions occur due to poorly executed technology migrations The focus on synergies without equal attention to preserving core business performance can result in a net loss of value, even if the synergy targets are technically met. This challenge becomes even more complicated in global matrixed organizations with dispersed stakeholder groups, where competing priorities, cultural differences, and misaligned objectives can severely impact the ability to preserve value while pursuing synergies. 𝗗𝗲𝘀𝗶𝗴𝗻𝗶𝗻𝗴 𝗮 𝗴𝗼𝘃𝗲𝗿𝗻𝗮𝗻𝗰𝗲 𝘀𝘁𝗿𝘂𝗰𝘁𝘂𝗿𝗲 𝘁𝗵𝗮𝘁 𝗽𝗿𝗲𝘀𝗲𝗿𝘃𝗲𝘀 𝘃𝗮𝗹𝘂𝗲 Here's how I helped a client with developing a governance structure that incorporates both BAU operations and integration efforts. - Ensure the organization distinguishes between those driving integration initiatives and those responsible for BAU operations. Create well-defined roles and ensure accountability is established at all levels. Develop a RACI matrix to avoid confusion and communicate expectations to each stakeholder group. - Establish dual reporting structures and allow functional leaders to have a voice in integration planning while maintaining focus on ongoing operations. - Integration SteerCos should include BAU leaders to maintain alignment and allow for input on integration decisions that may impact ongoing operations. - Implement guardrails for integration efforts by defining which areas are "off limits" to integration initiatives to preserve value (eg: critical customer facing processes). - Set up an escalation framework to ensure issues affecting BAU can be elevated quickly and resolved effectively before they cause disruption. Ultimately the synergy waterfall maybe a prized trophy, but preserving value is the foundation upon which that trophy must be built. Without it, M&A efforts risk crumbling under their own weight. What are your thoughts? Have you seen BAU operations neglected during integrations? #MandA #integration #governance #synergies #leadership Image credit: Midaxo

A few weeks ago, the “M&A Whisperer” Jennifer J. Fondrevay led a discussion with Extraordinary Women on Boards (EWOB) on the human dynamics that can make or break a deal.    What questions should the board be asking beyond the numbers? What should buyers and sellers be pursuing before and after the deal for successful M&A integration, particularly with respect to talent management? As described by Jennifer (and experienced by many in the Zoom room), M&A can foster an "us versus them" mentality, which can undermine the success of the deal. Boards should be asking questions: * to understand culture at each of the combined entities, * how cultural differences will be bridged, * how the vision for the combined companies will be communicated to employees and other stakeholders, * what actions are being taken before (if possible) and after announcement of the transaction to increase commitment to the transaction from the employees at both buyer and the target company. Tips for Sellers of a Target Company: 1. Plan for Cultural Integration: Ensure that there is a well-thought-out plan for integrating the cultures of the merging companies. 2. Focus on the Bigger Picture: Communicate the vision to the employees and how the M&A fits into the bigger picture, including what is anticipated for the target company and its workforce and providing a vision of how the target company, its relevant divisions and its employees can benefit.   3. Diligence: Is the buyer a serial acquirer (true in almost all cases for a PE buyer or an add-on to a PE portco; true in some cases for a strategic buyer)? How well have historic acquisitions integrated? Tips for a Buyer of a Business: 1. Learn from the Acquired Company: Take the time to learn from the target and integrate the best elements of both cultures and operating approaches. 2. Demonstrate Commitment: To gain and increase trust, show continued and consistent commitment to the vision in words and actions. 3. Define Organizational Structure: Focus on defining the organizational structure based on what is best for the customer. Consider the teams needed to achieve the vision and ensuring that the structure supports the combined company's goals. Challenges (and Tips) for both buyer and sellers: Often only a few employees at the buyer and target company know about any proposed deal. To minimize loss of trust, be as transparent as possible with employees at the combined companies following the deal announcement -- transparency around the business go forward, strategies, workforce, etc.. Be well. Winston & Strawn LLP https://lnkd.in/gNPfAt_J