If you ever had the opportunity to be at either end of an acquisition I suspect you know the various pain points as a result of a purchase. Of course it depends on which end of the acquisition you reside. If your firm is the “Shark” you are the buyer and have made an acquisition decision for strategic reasons. On the other hand if you are the “Minnow” you have been found to be an attractive purchase for a myriad of reasons which may include markets, products, channels of distribution, etc.
The first step of pursuing this union is to complete due diligence on the acquisition. This is usually completed behind the scenes to avoid raising pre-mature angst among the minnows. In most cases the due diligence sharks remain covert and work closely with key minnows to determine if the perception is really reality. Once completed the decision to move forward is made and the acquisition strategy converts from discovery to implementation. As many undergraduate and graduate students of business know the nuances of an acquisition strategy either makes it successful or results in dismal failure. The strategic plan at times yields far less than the white paper predicts. So how do you prepare for such a change? The human component of an acquisition is equally intrusive on the shark as well as the minnow. The status quo changes and the unknown component of the future state will take the center stage!
From a personal perspective I experienced both sides of the equation. Working for a conglomerate that was suffering my division was put up for sale. We in fact were the minnow! The smell of change was in air and uncertainty of the future was apparent in many conversations around the business. There were various suitors examining our firm’s current state and potential to fit into their organization. Eventually we were purchased and moved into a new division where we reside today. So how would an associate prepare for such an event? My opinion, study and become a shark expert. Learn the strategy the shark has used in the past and equally important the culture it supports. Complete a SWOT analysis on yourself and the firm’s future state to determine the synergies and more importantly the gaps. Determine if the future fit is there and/or what adjustments must be made. Look into your “tool box” to determine what you have to offer and if the new culture is a fit. This proactive approach will allow you some control over your new situation. If the gap is too large exiting the business may be a viable option. If the gaps are manageable being a part of the future state is a viable alternative.
Now, let me share the shark’s position. Being part of several acquisition teams in the past the merging of two companies has a dramatic impact on the shark as well. If the acquisition plan is deployed poorly the impact to the business is dramatic. So how would a shark prepare for the future state? If asked, key shark attributes should be patience, empathy and relationship building. The key piece of the acquisition puzzle still points to the human resource component. The loss of associates from the acquisition due to poor management of the integration will result in the loss of expert knowledge. Once removed from the business recovery will be difficult if not impossible. Most importantly the shark team must insure cultural gaps are defined and addressed. Ignoring this need will revert to a “bunker” mentality on both sides of the equation and the destruction of critical and sensitive relationship building.
As I share in my Benedictine Strategic Management discussions, there are many strategic advantages to pursuing an acquisition. We cannot underestimate the need to drive synergies within the new firm by managing cost improvements. But it should not be done at the expense of the human element. Preparing for change, shark or minnow is the responsibility of key business leaders. The reality of future “fit” is the responsibility of the employee. The best strategy to address this and any other situation is to continue to add to your personal “tool box” and build your portfolio of knowledge through education and experiences!
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About the Author
Pete Papantos is an operations director at a Fortune 500 company. He is responsible for the global execution of their strategic plan and driving operational excellence using lean methods. In addition, Pete is a graduate instructor with emphasis in operations and strategic management — both in traditional and online settings.