There are several risks, but what stands out from our experiences has been underestimating the scale, scope and change implications of the integration and the level of assimilation required between the affected departments, divisions, subsidiaries and leadership teams when taking on a merger or an acquisition.  This is particularly important when the merger and acquisition (M&A) is between companies focused on different sectors and/or geographical regions, but these issues are important with all M&As. 

Clearly, acquiring or merging with another business involves risks, but these risks are exacerbated when those leading it and making decisions are not intentionally focused on the full internal and external environments and when they fail to have contingency plans to address unforeseen business liabilities and challenges.  Some primary challenge and risk areas that we have observed are the result of 

1.  Poor or inadequate communications

1. What is/was the catalyst for the merger/acquisition?  Now compare that answer to what those who will be most impacted believe the catalyst to be.  Any discrepancies or conflict?
2. What is your communication strategy, and who will lead it?
3. How do/will you know you are being heard, and who is listening?

2.  A lack of transparency and inadequately preparing for the inclusion and retention of core competencies and staffing

1. How transparent do you really want to be?  Differing stakeholder groups will need varying details and information.  What is your plan?
2. Are there any changes/modifications to the organizational mission?
3. What core competencies will you need on board to achieve strategic outcomes?
4. Do the people you are keeping/adding/removing possess the core competencies you will need?
5. What metrics do you have in place to assess/determine when core competencies are not covered?

3.   Not incorporating and building on the brand and marketing and sales efforts

1. What are the distinct aspects of each of the separate organizational brands that must be maintained or advanced?
2. Have you assessed the strengths and weaknesses of the marketing and sales strategies and determined which tactics you will apply in merging / separating these?
3. Who is better—can you be as objective as you need to when completing overlapping or eliminating one or the other marketing strategies?

4.   Having two distinct cultures and service standards and not taking time to balance and merge the two (keeping the best of both and losing the worst of both)

1. What is the culture (personality, attitude, character) of each of the affected companies/organizations and how do you know this to be the case?
2. What are the standards for service within each organization?  Do they matter, how were they established, and what is necessary to merge these? 

Leadership Is Responsible So Be Strategic About It.

When we neglect to properly consider and/or manage these issues appropriately, as well as others, inefficiencies, ineffectiveness and low productivity reign, and this threatens accomplishing the original intent and strategy that served as the catalyst for the merger and acquisition in the first place.

… – there are myriad research studies and articles out there citing this data, much of which I became aware of during my OD grad studies and during my earlier years of practice. This figure has remained unbelievably steady over the past 20 years according to the studies back then and the more recent ones of today. My clients also express this high failure rate during my initial OD diagnosis and assessments.

Here are just a few places where you find this statistic:

(1) Beyond the Wall of Resistance: Why 70% of All Changes Still Fail–and What You Can Do About It – authored by Rick Maurer, a renowned change management expert, speaker, and advisor to senior leaders in organizations

(2) John Kotter’s work – renowned change and leadership expert and Harvard University professor

(3) Harvard Business Review’s (HBR) 10 Must Reads on Change. It is one of my favorites and is 220 pages of the best research out there on change. The collective group of authors are:

John P. Kotter, David A. Garvin, Michael A. Roberto, Samuel J. Palmisano, Paul Hemp, Thomas A. Stewart, Debra Meyerson, W. Chan Kim, Renee A. Mauborgne, Dan S. Cohen, Ronald A. Heifetz, Marty Linsky, Robert Kegan, Lisa Laskow Lahey, Michael Beer, Nitin Nohria, Harold L. Sirkin, Perry Keenan, Alan Jackson, Russell A. Eisenstat, Bert Spector – Source: Harvard Business Press Books
1. pages. Publication date: Jun 07, 2010. Prod. #: 12599-PDF-ENG

(4) Ken Blanchard Leadership Report

(5) A research study by MC Associates

(6) The September 2008 Training & Development article titled “Controlling the Perils of Change” authored by Merry Lee Olson

These are just some on my list of “most informative.”  Do you have others?

Terina Allen
President & CEO, ARVis Institute, LLC
Chair, ARVoices Strategic Leadership Network

Forty years ago this month, Title IX of the Education Amendments of 1972 became law, requiring an end to gender discrimination in admissions at educational institutions that receive federal money. Since then, progress in attaining gender equity for women has been heartening, but there is still considerable work to be done, particularly in the areas of faculty and leadership.

In the 1980s—in little more than the blink of an eye—women surpassed men in admissions on most college campuses. And now, unlike their parents and grandparents, these women are increasingly likely to be taught by women. This is good news, and we have Title IX to thank.

Women—and their dollars—are the lifeblood of today’s colleges. But who decides how those dollars are spent? Men, largely—and that’s not all they determine. As far as students are concerned, men are the dominant minority, but male administrators hold a lopsided percentage of university power and the most senior leadership positions. What’s more, men make most of the decisions that control women’s educational lives and futures, without much input or oversight from women themselves. This includes decisions about curriculum, co-curricular programs, the nature and scope of health and benefit programs, and faculty hiring. Women have unprecedented access, yes, but they have little influence.

We should, of course, herald the increase in the number of female college presidents. But we won’t sound the trumpets yet. After all, women represent a disproportionate one-fifth of the presidencies, the American Council on Education has found, except at the community-college level, where they represent one-third of all presidents. While the number of nonwhite female presidents has increased over the past four decades, their ranks are in decline. Ironically, female presidents have more education than their male counterparts but are much less likely to have a spouse and children at home.

Read more – go to the full article at http://chronicle.com/article/40-Years-of-Title-IX-/132311/

What Have You Failed At Lately?

Successful companies are those who steer clear of leaders who constantly tout about how they have never failed at anything.  The question “What Have You Failed At Lately?” is powerful, and it gives us great insight into a leader’s ability and willingness to innovate and adapt accordingly.  We want leaders who are comfortable with ambiguity; those who are comfortable with change; and those who are able and willing to adapt.  In order to get a leader with these qualities, he/she must be willing to fail and comfortable with failure.

We say we want creative and innovative leaders and then we recruit with interview questions that focus on success.  We need to add several behavioral questions about failure and pay special attention to the responses we get.

I assert that “the moment one decides that failure is not an option, he inherently decides that success is not either.”  If we truly want bold, out-of-the-box thinking then we must agree that failure is an option.  As a result, I want to know what leaders have failed at lately.  Their answers provide insight into how bold and innovative they really might be.  The greatest leaders have demonstrated that they were more interested and driven by actually succeeding at great things rather than being afraid of failing.  Failure, in and of itself, may not always be a good thing, but the fear of failing to the point of not trying is indeed failure – and the unacceptable kind at that.

Are your actions stifling or advancing leadership creativity?  What are your thoughts?

Terina Allen

www.arvisinstitute.com