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M&A: Why Change Management Drives Cultural Alignment

By  Paragon Solutions Paragon Solutions  on 2016-02-03 15:08:43  |  Featured in  Communications
Paragon Solutions
Posted By Paragon Solutions
in Communications
on 2016-02-03 15:08:43

change.management.strategy.morale.jpgIntegrating merging companies requires a daunting degree of effort and coordination from across the newly combined organization. 

As the final step in an M&A process that has already been through months of strategic planning, analysis, screening, and negotiation, integration is affected both by errors made in earlier stages and by organizational, operational and cultural alignment.

What hurts most? Grounding an integration in the objectives of the deal, bringing together disparate cultures, setting the right performance goals, and attracting the best talent are frequently among the top challenges that bedevil even experienced active acquirers. They’re also the ones that, according to McKinsey & Company, differentiate strong performers from weaker ones. According to McKinsey's How The Best Acquirers Excel at Integration (January 2016), the integration of an acquired business should be explicitly tailored to support the objectives and sources of value that warranted the deal in the first place.

It sounds intuitive, but some companies, in their haste, turn to off-the-shelf plans and generic best practices that tend to overemphasize process and ignore the unique aspects of the deal. What's more, companies often struggle to assess and manage culture and organizational compatibility because managers focus on the wrong things. Managers often return from initial deal interactions convinced that the cultures of the companies involved are similar and will be easy to combine. As a result, they almost always apply too few resources to the cultural side of the integration, often leaving it to human resources to lead.

Change Management Strategy

A comprehensive and properly implemented change management strategy can make an organization more successful and profitable, but unfortunately, many businesses fail to implement changes and transitions this way. While it’s important to focus on building efficient and effective technology infrastructure, improving and optimizing business processes and developing and marketing the right products, the focus can’t end there.

A strategic change management approach takes the people within an organization into account when any significant changes are being made to the company’s structure.

As most businesspeople know, change is constant for a growing business. Individuals and teams must be considered during any significant organizational effort in order to ensure a highly effective workforce. The following information should help highlight the most effective approaches to developing a supportive and high-performance workforce through strategic change management.

What is Change Management?

change.management.strategy.2016.jpgChange management is all about maintaining more effective individuals and teams within a company, even as the organization goes through major structural changes.

Who is a highly skilled individual? These people are capable, well trained, motivated and supported by a productive and positive team of other individuals - and part of an environment that drives, incentivizes and rewards high performance. 

Change management requires a set of tools, techniques and processes that are focused on how a project affects the people within an organization, and how these people can best achieve business goals. Decision-makers must deploy communication systems and organizational tools that are designed to help these people adjust to changes in the organizational structure and feel positive about the transition as it comes to pass. This is the best way to ensure changes are adopted fully, permanently and without risk of destroying the company morale.

5 Common Mistakes When Managing Change Webcast
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