I have been on both sides of acquisitions – the acquiring and the acquired. When talking about navigating change, I immediately thought about the process of merging two companies. Everything is changing – culture changes, process changes, technology changes, org chart changes. It can be very overwhelming!
In fact, it can be so overwhelming that a lot of people leave. According to Daniel Kim’s paper, Predictable Exodus: Startup Acquisitions and Employee Departures, within the first year of a company’s acquisition, 33 percent of acquired workers left, compared to 12 percent of regular hires with similar skills and work experiences.
And that’s just in the first year. Overall, acquired workers are 15 percent more likely to leave than new hires throughout the entire time with the company. This loss may not be a big deal if you are purchasing a company for their IP, but if you are acquiring for people and assets, you need to keep those workers on board. That requires a clear process in navigating change.
Auster and Ruebottom outline their process in Navigating Change as the 5 steps below:
- Map the political landscape
- Identify the key influencers within each stakeholder group
- Assess the influencer’s receptiveness to change
- Mobilize influential sponsors and promoters
- Engage influential positive and negative skeptics
As I was reading their process, I thought there were at least 3 critical missing pieces to the process.
1. Culture is key
I was surprised that their process for navigating change didn’t mention culture. This is a very influential part of change. Some organizations are more agile and familiar with change, while others haven’t changed in 10 years. In my experience, culture change is one of the biggest reasons why people leave after an acquisition.
2. Re-evaluate, often
Auster and Ruebottom mentioned that you need to assess the influencers receptiveness to change; however, they don’t say that it needs to be re-evaluated. In the beginning, influencers may be excited and receptive to the changes, but a few months down the line that changes. All influencers should be evaluated and re-evaluated regularly. I
3. Gradual is better
Especially in an acquisition, the changes need to be rolled out gradually. Like I said earlier, all the changes are overwhelming! But prioritizing the changes and rolling them out gradually, people will be more receptive and not overwhelmed.
While I do agree with many of the points made by Auster and Ruebottom, I believe their process would be stronger by taking these fundamental principles into account. My proposed new process doesn’t remove any of their steps, however, it adds my recommendations to key areas of their process.
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