Sunday, June 14, 2015

The Hard Thing about Mergers and Acquisitions

Mergers can be fun.  I'm mostly kidding.  They're hard hard work and most of the time fail.  Companies are typically acquired for either customers or technology and little thought is given to the nurturing or even preservation of people.  Many times there exists a my way or the highway mentality, especially when it's a large company acquiring a smaller company.  

How do we play this game better?  How do you thrive in this new environment?  Having been through it a few times, I've boiled it down to 3 things as guide posts on the people road.

Take care of the people, the products, and the profits - in that order.

Know the goals and motivations -  The goal of merging may seem obvious but it is often poorly articulated.  Create a phased goal for the integration team.  If you can parse the integration into digestible and measurable chunks, just like on any other project, it will go better.  Understand people's motivations on both sides of the integration.  Are people incentivized to make this work?  What/When output is expected?  Get this info together and make a plan that truly incentivizes the people who will make it work.

Identify leaders who can be culture bearersFind the people in the acquired organization who have the ability to lead and are already somewhat aligned with the culture of the acquiring organization.  Give them some responsibility in the integration that they can be successful at.  People will start to follow and values will be reinforced. 

Look for ways to bond the teams and measure itCelebrate wins and ask for people to participate in the process to come up with solutions when you fail.  These are the things that bond new teams together.  The more wins you create, the more people will feel good about the situation.  The trials create lasting bonds if the leaders can bring the people together to create a jointly owned solution.  It's not hard to measure engagement.  If you baseline people's engagement level around the goals of integration and pulse survey it you can easily get a sense of where people's heads are at and whether you're making progress or momentum is slipping.  
M&A integrations are never easy and many of them fail to live up to the expectations of the acquirer.  If you get the people part right the other pieces will start to fall into place.  As Ben Horowitz says in his book, "The Hard Thing About Hard Things", "Take care of the people, the products, and the profits - in that order."

Saturday, June 06, 2015

Pennywise and Culture Foolish

As we grow our business we are always looking for ways to improve it, ways to measure and apply focus, more efficient ways to achieve our goals. Most of these optimizations have historically had little to do with the most expensive asset of our business: our people.

 We have purchased all manner of platforms, tools, mobile apps to enhance productivity. Tools such as, Hubspot, QuickBooks, Supply Chain Management tools like SAP to get better at getting the right materials to the right spot at the right time. And we have spent trillions of dollars doing so.

 All of this spending has occurred while spending on fostering and optimizing talent has languished. This negligent phenomenon can be most likely attributed to the view of HR as a cost center. HR is typically not viewed as strategic and the tools, platforms, and apps are part of that cost center.

 Even while so much attention has been placed on Culture in mainstream media illustrated here in this New York Times article from May 2015.
One recent survey found that more than 80 percent of employers worldwide named cultural fit as a top hiring priority.

Domino is your business.  Courtesy of The Oatmeal

We need to start viewing how we manage our people as strategic advantage and pull it out from under the yoke of HR.  Optimizing people requires understanding how people are wired, what drives and motivates them, the type of environment they thrive in, and who they are surrounded by.  Everyone has experienced this as Culture Flow (borrowing from author Mihaly Csikszentmihalyi book on The Psychology of Optimal Experience) and typically happens for a brief time when everything comes together for a company.  When it happens it's really cool and the organization covers ground in months that would typically take years.

You have to pay attention and invest in culture to achieve Culture Flow.  And to pay attention you must understand how people are wired in your organization.  The first step to optimizing your most expensive asset, like optimizing every other part of your business is getting at the data.  You wouldn't go on a road trip without a map, you wouldn't start a business without first understanding the market, and you can't grow a culture without first understanding the values of your people.  It's so much less expensive than the wrong turns you'll make without a map.

Don't run your business like Domino and don't be pennywise and culture foolish.  Go figure it out.  You'll  find Culture Flow and as a result everything in your business will start to get easier.

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