Chances are that if you work long enough for companies in the public domain you are going to get to participate in either the acquiring of another company, or the being acquired by another company. Acquisitions and divestitures are a fact of life in the business world today. Companies continue to grow and change and acquisition and divestiture are one of the fastest ways to rapidly remake an organization. Having already been through a few of these types of management and organizational changes in past lives, it is very clear that both the change itself, and the time anticipating and leading up to the change can be a challenge to your leadership capabilities, not to mention your sanity to try and get through.
There are all sorts of trite adages and sayings regarding change that can be inserted here. I’ll leave to everyone to insert the one that they are most comfortable with. The bottom line here is that when there is an acquisition, you truly have a change.
No matter how much due diligence the acquiring company has done, they cannot be aware of all the capabilities and the people that make up the organization that they are acquiring. And no matter how much communication the acquired organization provides its staff, and no matter how much research has been done on the acquiring organization, no one can be fully prepared for the new management philosophy and new management structure that will be imposed after the acquisition.
Divestitures and acquisitions are interesting phenomena in that there are a disproportionately large number of people being affected by the change, with only a disproportionately very few who actually have any sort of input to or affect on the change itself. So, everybody ends up worrying about the coming change, but there are very few, if any who actually can do anything about it. The fact that they can’t do anything about the change doesn’t stop people from focusing on it almost to the point of total distraction.
Reinhold Niebuhr seems to be the source of the quote that everyone uses in times like these. Oddly enough it is known as the “Serenity Prayer” and it goes:
God, grant me the serenity to accept the things I cannot change,
The courage to change the things I can,
And the wisdom to know the difference.
I actually like this starting point, so I’m going to look at it in application to a business acquisition or divestiture.
Unless your organizational title begins with the word “Chief” and ends with word “Officer” chances are that you are probably not going to be consulted about any corporate acquisition or divestiture. It may be hard to believe but it seems that there are any number of individuals within an organization that feel this is truly some sort of mistake or oversight.
Unless an individual has the wherewithal to rapidly assemble another, competing acquisition or divestiture bid from another corporate entity or capital fund, this is the way it is going to stay. They are not going to ask for everyone’s, or possibly anyone’s opinion. The acquisition or divestiture is not going to be changed. This is where that “Serenity” portion of the prayer comes into play.
As difficult as it sounds, leaders cannot afford to spend time (read: waste time) worrying about the outcome of the acquisition. They need to remain focused on the achievement of their and the teams goals. At this point the team’s responsibility isn’t changing. Further the leader needs to keep the team as a whole, as well as the specific individuals within the team focused on their objectives as well. It is not an entirely easy thing to do.
This is where the “Courage” portion of the prayer comes into play.
As part of any acquisition or divestiture, decisions regarding who will be a leader in the resulting new organization and who will not, are going to be made. It is somewhat frustrating to all involved in that again a relative very few will be making decisions for the relative very many on these topics. As uncomfortable as that may sound, that is the way it is going to be. However, all is not left entirely to chance.
One of the key aspects that will be weighed and taken into account with these leadership decisions is going to be performance. It probably won’t be the only aspect reviewed, but it will be a key one.
Individual and team performance are items that can be changed. Leaders must have the courage to change their own and their team’s performance. They can probably change it for the worse by worrying about the acquisition or divestiture, or they can change it for the better by maintaining the focus on the business goals at hand. While it may be impossible to ignore the pending business change, it is probably best to acknowledge as an event that cannot be changed and move on to the topics and goals that can be changed.
There is a great disclaimer in just about every financial investment prospectus document that I have ever read. It goes (and there are several variations of it available):
“Past performance does not necessarily predict future results”
We have probably all seen it. It is a US Government Securities and Exchange Commission (SEC) mandate that it be included in every investment prospectus.
So what do we do? We go and look at the investments that have done the best over some period of time, and select those to invest in anyway.
If they have done well in the past, we expect them to continue to do well in the future. What else do we have to go on? Are we really going to select those investments that have underperformed in the past in the expectation that they have obviously learned from those mistakes and they will henceforth only do better in the future?
I don’t think so.
My point here is that when the business organizational change is done and the decisions regarding positions and leaders are being made, one of the very few items that a leader can affect is their performance. And despite what the “disclaimer” may say, I think it is probably safe to position that past performance in business and leadership roles is a good predictor of future results.
It may not be the only input taken into account, but it is one of the very few that an individual can change.
That doesn’t seem to stop people from worrying about the outcomes of any acquisition or divestiture based changes though. I guess this is only natural. When there is uncertainty, people will have a tendency to focus on those uncertain aspects. This is also where that “wisdom” portion of the prayer comes into play for a leader.
A leader cannot deny or ignore the uncertainty that their team members or peers for that matter will feel with the pending organizational changes. To do so would only exacerbate the issue and create different forums for these concerns to be aired. That will not be a constructive situation for anyone involved.
As I noted above, team and individual concerns regarding the organizational and structural changes need to be acknowledged. They are real. There may not be much that anyone can do about them, but they do need to be acknowledged. Once the concerns are identified, the leader needs to walk the team through the known information and structure and restate what is currently unknown.
By identifying the unknown aspects of the pending changes, they are in essence then contained, and a brief discussion as to what the team and its individual members can do about them will be in order. The key here is the public acknowledgement of the concern and the discussion about what can be done to correct the situation.
This in turn will drive the team and individual acknowledgement that there probably isn’t much that they can do to address these topics. Neither the information nor the ability to modify these concerns resides in the organization. The team focus can then be shifted back to those topics and concerns that the team can affect and address which primarily are their objectives and performance against those objectives.
Acquisitions and divestitures of organizations are the business equivalent of tectonic shifts. They are truly events that are only dealt with and responded to as there are very few things that organizations can do to plan for and work on to address them. By their very nature, these sorts of changes and agreements are kept from the public eyes for all sorts of legal and competitive reasons. It is always this type of required secrecy that generates concern and disruption in all the organizations involved.
The fear of the unknown and the uncertainty that it generates regarding the future can be debilitating to an organization going through an acquisition or divestiture. In times when this has occurred it is the leader’s responsibility to have the wisdom to keep the team focused on the aspects of the business that the team can change, as well as the courage to acknowledge and address the concerns associated with items that cannot be changed.
I am not so sure that anyone gets to have any serenity in times of pending organizational change, but demonstrating wisdom and courage will probably get the team through.