This has been one of the busiest business years in a long time for mergers, acquisitions, spin-offs, and other variations of the above such as the merger-inversion-for-tax reasons, and the merger-triple-spin-off move. At Advantexe, where we provide organizations with the power of practice through the use of business simulation, we have conducted many different transformational learning engagements over the years that have focused on building the skills of leaders and contributors during the transition and process of merging, spinning off, or both. Most of these learning engagements have included business and leadership simulation exercises to help develop and practice the skills needed to survive and then thrive after the process. This blog shares some of the observations, insights, and data that we have gathered from these engagements to provide quick tips and thoughts if you are leading or participating in a merger, spin-off, or some combination.
1) Embrace VUCA and Lead to the New Future
One of the most popular and current leadership topics is the concept of VUCA. Originally a military tool, it has made its way into the business world and is being used by leaders as a management tool to identify and navigate a path forward in times of change.
VUCA stands for:
- Volatility
- Uncertainty
- Complexity
- Ambiguity
The VUCA concept is popular in business because today’s business environment – especially with all of the mergers, spin-offs, and other moves - has created a global VUCA environment which leaders have to navigate through. Based on our observations and practical experiences, we have created the Leading to Success in a VUCA world process. This process keeps it simple and provides a point north for leaders struggling with where and how to start.
Executing this recipe for success is not easy and requires strong new skills:
- Moving from volatility to vision requires a unique skill set to see the system of business as it is evolving and creating a new vision to get there.
- Evolving from a world of uncertainty to a world of understanding requires a lot of hard work to match the needs of customers and the abilities of the new organization.
- Any major change like a merger or spin-off creates complexities in systems, structures, and how to run the business during the transition.
- Once the new structure is in place, then it is critical to move from the ambiguity of it all to a new organization that has alignment and clear paths of decision making to understand and execute a new strategy and deliver a value proposition to customers.
2) Invest More in Training and People During the Transition (Not Less)!
As the discussion of applying the VUCA process above suggests, new skills and tools are critical in order to be successful. A typical window for a merger, acquisition, or spin-off is about 12 to 18 months. There is not a lot of time to wait and hope and as you know, hope is not a very effective business strategy. Small and focused workshops that provide business acumen and business leadership skills for leaders, managers, and contributors are essential to be able to make it happen.
One of the extra benefits of investing in people during a transition is that it shows them you care and helps provide a catalyst for employee retention and engagement.
3) Focus on Revenue and Customer Retention
It is so easy to think that when a $20 billion Company A and a $30 billion Company B merge the new company automatically is a $50 billion company. That is never the case! Customers get worried, sales people lose their focus, and the supply chain is thrown into chaos. The business landscape is littered with deals-gone-bad because the leaders assumed all of the revenues automatically stay. New and refreshed strategic business selling skills with a focus on Key Account Management and Channel Management are critical. There needs to be a new message and process –one that shows a vision for customers and the sales team – and there has to be aggressive strategies to support the brand. We are living in a world of Social Selling and new Social Selling Skills can create a positive ground-up campaign to change the perception and retain customers.
