One of the key responsibilities of any business executive is to lead their company or organization on a path that will deliver solid, sustainable, and dynamic growth. Steady growth can result from internal combustion—taking full advantage of an existing market, customer base, and an established line of products and services. A leader looking for more rapid growth, however, will often turn to an M&A strategy to jumpstart their expansion and create a competitive advantage.
While the promise of rapid growth and success that mergers and acquisitions offer is enticing, it is important to consider the challenges of implementing this kind of strategy.
One of the classic examples of the breakdown that can occur during an attempted business integration was the acquisition of Columbia Pictures by Japan's Sony Corporation in 1989. The transaction seemed to make sense because it would allow Sony to control the production of content that would then be distributed through their network and ultimately viewed on their equipment.
Yet, Sony quickly discovered that the dramatic cultural differences between a company making movies in Southern California and a more bureaucratic engineering, manufacturing, and distribution company based in Japan required the management team have a new and different set of skills to pull this merger off. Despite tremendous efforts and significant cash outlays, Sony struggled to make the acquisition successful and its earnings were negatively impacted for years.
This example demonstrates that leadership is about more than having financial acumen or knowing how to execute against a tactical plan. Leadership also requires an understanding and appreciation of the "softer" aspects of building an organization based on vision and values. That’s because vision and values are what encourage employees to become and remain passionate about what they do and to consistently work toward achieving the organization’s higher purpose.
Want to avoid the common pitfalls of mergers and acquisitions?
Here are Eight M&A Communication Strategies:
1. Communicate constantly.
Have a carefully prepared and readily executable communication strategy and do not deviate from the plan, regardless of how long successful business integration takes.
2. Develop a new language.
As the two entities come together, develop some new key phrases or terminology that describe the future state and the anticipated result, capturing the synergies possible within the new entity.
3. Take the pulse of your employees on a regular basis.
Get honest and candid feedback about how the integration is going, what the challenges and obstacles are, and how people are actually feeling about the process. Reach down into the organization to be sure that you are getting a clear picture from a broad spectrum of employees.
4. Tell stories that highlight success and encourage behavioral change.
Collect and develop stories that highlight the behavior and the type of collaboration and cooperation that you want to see permeating the new organization. Ensure that these stories are disseminated throughout the organization, encouraging people to add their own anecdotes and experiences to a growing “story anthology” that becomes a vital part of the new company’s new history.
5. Walk the talk.
As a leader, set the standard and model the behavior that you expect throughout the entire organization. Every communication event and interaction will reflect your leadership and your expectations.
6. Be patient.
Successful business integration often takes far longer than originally planned, so don't underestimate the amount of time and effort the consolidation project will demand. If you want real results, you and your leadership team must remain patient, optimistic, and positive to sustain morale and to encourage cooperation and collaboration.
7. Talk about the future state.
A leader needs to talk, repeatedly, about the overarching value proposition and the “Big Idea” that drove the decision to pursue a merger, acquisition, or business consolidation. Consistently and clearly articulate what the organization can achieve and what it can look like in the years ahead.
8. Keep the dream alive.
Consistently reinforce the idea that what you envision is a possible dream, an achievable endpoint, and keep this dream alive and well until that dream becomes a reality. With honesty, sincerity, and enthusiasm, you must energize your leadership team and all your colleagues by finding and capitalizing on your authentic voice of leadership.
Adapted from the Special Report: "Accelerating Corporate Growth: Eight Communication Strategies for Driving Successful Mergers and Acquisitions" by Craig Bentley. To download the report and read more articles on how to drive corporate growth, go to: http://www.bates-communications.com/business-challenges/delivering-the-growth-agenda/