|
|
Revenue Improvement Actions
Assuring revenues are maintained or even improved in a merger or acquisition requires attention not on the financials but on the strategic. Revenue generation is an outcome measure of front-end business operations (sales, marketing, brand awareness, market lock-in, customer loyalty, etc.). Revenue improvement means understanding revenue as the effect not the cause. It means understanding an acquisition in the context of a bigger strategy. Sales is often an overlooked component of a merger and usually the first place to affect revenue improvements.
A transition represents a unique opportunity to seize on disruption and chaos and introduce new systems and procedures that capitalize on newly-acquired assets and capabilities. It is counterintuitive when the storm is lashing against the side of the boat to do anything but sit down and hold on for your life. Revenue improvement, however, means taking actions to harness the energy of the waves and wind that at first appear to be the danger.
Take strategic planning action in anticipation of your next merger or acquisition. Set a goal to improve revenues by more than just the sum of the two parties’ balance sheets. Then, back into an integration and communication plan that will ensure the desired synergies.
Reference:
Transition Management
|
|
Go to top | Home
|
|
|
Cost Savings Improvement Actions
The budget was prepared for a short-term cash drain but some acquisitions can become more of a long-term hemorrhage.
Controlling costs comes down to one thing—speed! Most cost overruns are the result of indecision and unclear planning which lead to a dragging out of the time involved for the transition. Redundant systems continue to operate separately, redundant positions continue to be filled, and on and on.
Reference:
Transition Management
|
|
Go to top | Home
|
Earnings Improvement Actions
Big organization changes (like mergers and acquisitions) attract attention from the stakeholder community and particularly investors. This community has given the trust and funding to go ahead with the deal but now expect to see something in return. Earnings are what everyone is waiting for. And of course, the due diligence analysis says it’s going to happen.
It will happen if the transition is managed well. It will happen if the leadership team has a keen sense of the risk factors that can affect bottom-line performance. It will happen if speed, discipline and process come together in the first 90 days after announcement.
Reference:
Transition Management
|
|
Go to top | Home
|
Operations Performance
What does one plus one equal? The mathematician answers “two.” The investment banker says “three.” But in the merger world, unfortunately, the answer is “2/3”.
Why? During a merger, lots of time and energy are spent on due diligence, or quantifying organizations’ hard assets. This process makes the accountants happy and looks neat on paper, but the real value—and the real risk—inherent in mergers lies in the “soft” side of the transaction. When the soft side is poorly managed, or neglected altogether, hard assets such as manufacturing capacity, inventory levels, and production capability plummet. Properly aligning the people who support these areas protects the hard assets. Alignment only occurs when a good, sound vision exists that can be easily communicated to those who make your company tick.
Reference:
Risk Assessments and Communication
|
|
Go to top | Home
|
Retention
People need to receive constant and consistent communications to keep them connected to the process of change. When people connect and commit, they produce value for the organization.
During change key producers feel energized if they are contributing and making a difference. They seek opportunities to understand what is needed, to be involved in decisions and actions. They are primed to produce information for task forces and project groups, to extend their enthusiasm to customers, and to examine innovative new ways to approach the opportunities change brings. They are ready and willing. The organization’s task is to recognize and leverage that willing ability.
Reference:
Coaching and Communication
|
|
Go to top | Home
|
Speed
The speed needed to push through a merger before people get bored, take sides, and leave, and before productivity suffers and sales fall off, is immense! Strong outcomes require capturing the energy created during a major change—to transform the transition period from a liability into an asset.
With speed comes the possibility of imperfection. But, imperfection is almost a requirement for a successful transition. If you can get it 60% right and move on you can modify and perfect the strategies, structures, and systems once they are in place. You can be functioning while you are perfecting. Cross the T's and dot the I's later if they end up needing it.
Reference:
Transition Management
|
|
Go to top | Home
|
Customer Relationships
During a transition the sales force and others who interact most with the outside world are often confused about what is expected, unclear about what to say or do, and uncertain about the future. As a result the customer is neglected, or worse: treated to tales of misgivings about what is happening. Customers begin to wonder if anyone knows what is going on. They begin to doubt that their own needs will be considered during this chaotic time, looking elsewhere for someone who can assure them they will get what they want, when they want it, at the price they want, with the service they deserve. Loyal customers begin to fall away. Revenues drop.
To keep customers committed and revenues strong make solid decisions and communicate them. Changing customer strategy or product mix takes time, and service levels are impacted. Keeping the customer connected and involved provides invaluable information and encourages them to stay committed to you. Though service levels will change, they don’t have to drop.
Reference:
Transition Management and Communication
|
|
Go to top | Home
|
Culture
How to blend the cultures of two or more unique organizations is often overlooked during the flurry of activity that takes place when a deal goes off. However, successfully creating, communicating and implementing a new corporate culture for the go-forward organization is essential to long-term success. Just as people aren’t productive when they’re unclear about their career future, productivity drops when they lack understanding of the cultural expectations in their new work world.
Reference:
Transition Management, Communication and Coaching
|
|
Go to top | Home
|
Communication
Communication within a merger environment is the integral component to success. It is also the most overlooked and least strategically approached area during change. To keep people connected to the vision, communicate the organization’s plan, provide ongoing dialogue between senior staff and the organization, and articulate what’s coming next. Proactive communication keeps your workforce productive. People stay connected to the vision when they understand what tomorrow holds and how that impacts today.
Reference:
Communication
|
|
Go to top | Home
|
Transition Planning
A merger or acquisition is not done to cause organizations to be smaller, make less money, and work employees’ fingers to the bone—and mergers are not done to reinvent existing wheels or to lose key talent. Deals are done to work - plain and simple.
None of this happens accidentally. To achieve extraordinary results, a strategically planned transition must be developed. But it’s not enough to merely plan a stellar strategy. A complete solution must also include a way to get the thing off of the planning pages and embedded in the go-forward organization. Especially during mergers, it’s crucial to stay the course; keep focused. Creating a solid transition plan—and sticking to it—will keep you on track, and keep you focused on the vision for the new organization.
Reference:
Transition Management
|
|
Go to top | Home
|
|