WHAT IS IT?
A successful merger and acquisition strategy can be an effective way of growing an organisation, either through acquisition of new customers, services or talent. However, between 70% and 90%* fail to meet the expected business case. Whilst there can be many reasons for this high-level of failure, one common thread is people.
Leading an acquired or merged organisation can test the skills of the most accomplished leaders and leadership teams. This solution helps those accountable for deals to understand the impact and contribution to organisational success the current leaders/leadership teams have, as well as determining where there might be key gaps.
*Harvard Business Review
An acquiring and/or acquired organisation may well have highly developed and technically skilled leaders, in fact, access to talent might be one of the reasons for a deal. Having appropriate technical or great leadership skills though may not be enough to ensure post acquisition success.
Ideally there should be a clear plan for the acquiring and acquired organisation post a deal which could include areas such as accelerated product development, enhanced customer propositions, restructuring to release cost synergies etc. However, unless there is a leader/leadership team with the right inclinations to deliver that plan then the deal may not drive the value expected.
Understanding the impact and contribution of existing, acquired and new leaders / leaderships teams is therefore key to delivering the expected deal value
Those accountable for acquiring are often keen to retain leaders in merged or acquired organisations, often with good reason i.e. they understand the organisation, market, customers, regulators etc. However, without fully understanding those leaders’ inclinations around making an impact or contribution at work then poor and expensive retention decisions can be made.
For example, a global bank acquired a small payments processor with the intention of merging it into their existing payments organisation. Against advice they decided to offer a retention payment to the acquired Chief Executive, without understanding that their inclination was to innovate and drive new ideas. Within weeks it was clear to the accountable leader in the bank that the newly acquired CE was never going to deliver the organisational plan which was focused on integration and rationalisation of their old company and therefore they were let go. This had an impact on the plan, staff moral and cost.
Using The GC Index®, an assessment of the potential or acquired leader/leadership team would be undertaken, alongside any leaders being brought in from the acquirer. This assessment would focus on both individual leader and leadership team inclinations to making an impact and contribution.
The assessment could be undertaken in advance of closing the deal, in order to better reflect the potential value of the acquired organisation or post deal once a clear organisational plan is agreed and used to assess whether there is the right mix of inclinations to drive that plan to a successful conclusion.
The solution includes:
- Access to the tool for the agreed leaders/leadership teams
- One to one and team feedback from a trained GCologist who’s also an experienced M&A HR practitioner
- One to one follow up sessions to support development planning