The Process of Change Management in M&A

If you're paying per page for a virtual Data room in 2022, you should be fired because that's just wasting money. And that's why there's firmroom.com a virtual data room that meets public company security standards for a fair price for only 500amonth with 10 gigs of data included, somebody had to build the best VDR out there. It's if you're getting duped into paying more than $10,000 for a virtual data room, save your money. Visit firmroom.com it's an M and A Science company. We don't build crappy products. I'm Kisam Patel and you're listening to M and A Science, where we talk with deal professionals and learn valuable lessons from their experience. This podcast focuses on stories, strategies and what actually happened during M and A deals. Welcome to M and A Science Live, where leading M and A practitioners share lessons learned from their experience. If you're interested in keeping up with the latest from M and a science, visit mascience.com and subscribe to our free newsletter mail. Every Monday we share highlights from our interviews and publications so you can continuously improve your M and A skills. Again, that's mascience.com I'm your host Kisan Patel, CEO and founder of M&A Science. Joining me today is Mike DeVita, previous director of M and A Integration at Walgreens M and a Transformation Executive at Salesforce and is currently Business Value Advisor at Salesforce to Today we're going to talk about Change management and M and A. How you doing Mike?

Fantastic, Kisan. Always wonderful to be here with you and with the M and A Sciences audience.

Appreciate having you. Can we kick things off with a little bit about your background?

I've got a couple of decades in M and A, including the roles you described working across the deal continuum from letters of intent all the way through full blown integration. I have a particular sweet spot in in the integration phase and have leveraged that background into broader transformation activities that even go beyond M and A and other valuation activities that go beyond M and A, which is part and parcel to bringing me to some of my current roles with the Salesforce.

So you do all the tough stuff in M and A. You don't take get the easy work.

I don't know that there is easy work, depending on who you ask, but I'll take whatever work I can get.

Let's talk about change management. What is change management? What's his role in M and A?

From a theoretical perspective, change management's the concept of influencing the type, the amount, the timing of change that occurs in a given scenario, like a deal, so that the desired outcomes are achieved. That's it in essence. And the part that's perhaps sometimes lost about that is it should be tied to what outcomes do we want to get here. It's not completely esoteric and so the more it's tied, the better. In terms of M and A. M and A is often the most consequential use case for change in the life cycle of an enterprise. When proper change management isn't recognized as an explicit component of the M and A activity, value creation is definitely in jeopardy. So we need to always be mindful of that because as most of your audience would know, and I'm sure you know, most deals fail. And they can fail for a number of reasons beyond change management. Change management is certainly one.

I refer to MA as the largest magnitude of change management an organization can go through. Is that true or false?

Absolutely true. It's not necessarily true for every single deal. The nature of the deal will determine, but certainly those. If we think about classic high profile ma. So where it's a large acquisition in relation to the existing enterprise, we're talking about a traditional acquisition. Those are transformational. There are deals an individual deal with that may be fairly small compared to the existing enterprise or the acquiring entity. And it may be one that's been done many times before. And so those individual transactions may not be. But as a category it's absolutely true.

I need that validation. I want to make sure I wasn't lying to people. Let's talk through the fundamental components of change management planning.

Yes, I will mention a couple really high level and then we can explore them further. To me, one of the most fundamental is a stakeholder analysis. It would include things like sponsorship, et cetera, et cetera, but we can get into details. And the other real fundamental component is a communications plan. So in addition to those two components, there are others that can be classified various ways. But they would include things like having a training plan, coaching plans, management resistance plans, other things like that that serve as part of the content or the theme for some of these other two. But those two are in my mind the cornerstone of having something that's both comprehensive and effective from a change management standpoint.

Okay, so several things, but the main two are sponsorship plan and communication plan.

My humble opinion.

Yeah, we talk through them.

So when we think of a stakeholder analysis, we're really talking about analyzing in as comprehensive way as possible all of the. Whether that be Individuals, entities that will either execute or be affected by directly or indirectly the change, and in this case the change is dictated by the nature of that deal. So some of the obvious components of that typically are if it's a buy sell transaction, the buyers, sellers, shareholders, debt holders, other related parties. So those who are directly affected by the deal in let's say financial terms, but beyond that, there's a whole slew of stakeholder community, whole slew of the stakeholder community that should at least be considered in terms of whether or not they're relevant and how much in a given deal. So that includes the employees. Keep in mind these are employees not simply of an acquired entity, but they're the employees of FRAMC acquirer. In many cases there's just as much change or more for those folks, depending on what the deal thesis looks like. Your customers obviously can be greatly affected. Service provider vendors, government entities, from federal to state to local and even broadly communities. I'd like to put it in like an other category that might be specific to a deal. So it runs the range of potential stakeholders. And what we're typically evaluating for as part of this analysis and or plan are who's who in the zoo. So who's relevant in terms of those categories? Some may be more relevant than others. For instance, with respect to government entities, I'll take the low hanging fruit for probably a lion's share. Your audience. If it's a deal that is very large, there's an acquisition by an acquirer of a target in a similar industry, they both have considerable market share, there could be potential antitrust concerns and therefore the ftc, the Justice Department could be interested in reviewing such a deal. If you're in an industry where you're extremely small player, it's a commodity business with throughout an economic term, perfectly competitive market, all those things, that government entity probably isn't going to be relevant. There's not going to be any attention, let alone opposition from let's say the Federal Trade Commission or other legal bodies from a competition standpoint. So it's those sorts of decisions that one needs to consider when evaluating across this broad swath of stakeholders who's relevant, who's not.

There's a lot in that covered a few different bodies there from the customers, employees on both sides, service providers, government entities, the communities, the communication plan, which obviously is pretty instrumental to making this happen. What are some of the key things when planning the comm strategy?

Yeah, so I'd like to think of these in fairly high level terms to begin with. So we Think about Communication plan Often folks gravitate towards what do we want to communicate, what do we want to say? And of course those are relevant. We also want to consider when things are said, we want to consider how we say that who's delivering a message, when they're delivering a message, what they're saying. So all those components, and again, the actual components, are dictated by the nature of the deal, meaning the players involved, the circumstances around it, but also the nature of what the plans are moving forward to realize the deal thesis low hanging fruit on the communication plan, obvious things are potential personnel changes, certainly as much of the integration plan as can be divulged in consumable bites. It's important, though, regardless of some of these components, to speak with one voice. That means with respect to a given topic, there aren't conflicting messages sent. And sometimes that happens innocently enough. But if a senior executive is saying something to a given stakeholder group and a different person, or even potentially that'd be a bit more shameful, that same person saying something different about the same circumstances to another stakeholder group, that's a real problem. More typically, it's an innocent matter of one individual communicating something, a different individual communicating something else about the same topic. But particularly the more folks that are involved, the larger the deal is, the greater the chance that can happen. If we're not really explicit about what the messaging is, who's saying it with respect to when. I just give the general tenet that for most messaging, the sooner things are delivered, the better. I always say that communication is going to occur whether or not you have a plan. That doesn't really matter. What matters is whether it's going to be the way those deal owners, those who are accountable for making the deal realize value, have approved that content, or whether it's the rumor mill or somewhere in between. Obviously, the more it's the former, the more chances you have for success, the more it's the latter. The more you have chance for complete misinformation to be communicated, for folks to become discouraged, for momentum about the deal to be lost or certainly deteriorated, et cetera. So the sooner you can communicate and get your collecting ducks in a row and messaging in a row, the better in terms of some of the how. As a general rule, when it comes to potentially career changing events like M and A that can change careers, these messages are best delivered in person or personally. In a Covid environment. It may not actually be directly in person, but certainly in a way that folks can see get a feel for the communicator so the more you're in the room with those folks, there's definitely a greater chance to connect. So I would say as a general rule, always better to be speaking to someone, being there as close as you can, in person or personally, rather than simply sending out a memo about what's happening or what's going to happen. Another thing I want to mention about the who, senior management has to be seen because most folks realize that unless the deal is tiny, those are the folks who are accountable for the results. So whether that's speaking to current employees, whether that's speaking to acquired entities, to the extent they're not, folks will again assume what they're thinking or what they might otherwise be saying behind closed doors. You don't want to run on assumptions. We all know the old adage that goes with that. But what I'll also say is people managers really need to be involved. There's a saying, and I think it's based upon statistically valid studies, that regardless of the type of message, it takes about five times for someone to hear something before they really understand it. There's also been studies that by and large rank and file employees have a greater level of trust with their people managers than they do with senior management. That second point is probably pretty obvious. You have a direct relationship. You may be communicating or seeing your individual managers every single day. Typically, if you have no trust for them, you probably won't be staying in that job long. So there's at least some level there. Whereas senior management, whether it's from an acquirer or your own employer, you may not see them much, you may not have any sort of relationship with them. And so therefore developing a high level of trust is very difficult to do. But if you have the correct messaging and again in a rigorous plan so that we're giving the same message, and those folks can give that message in the context of how it affects a given function. Because often talking about a deal thesis is it's difficult sometimes for folks, depending on where in the organization you sit, to realize what that really means. For me that in terms of the who on the communication, in many cases it should explicitly be different people in different roles with delivering the same message or maybe a play on the same message. So those are some of the high kind of high level principles that I think are crucial to that communication plan.

Speaking of the who, who should own all of this, who should be the key people involved in planning and executing the change management?

Yeah, it's a great question and that's a fundamental piece of that stakeholder analysis which really has to take place at the very beginning. As I mentioned, it's foundational and so you need to identify sponsors. Think about this as a raci diagram. So those sponsors are accountable. They may not be responsible for all the legwork, they may not be responsible creating all the content, and they may not be responsible for delivering all the content. Particularly if it's talking about M and A with large organizations simply probably don't have the bandwidth if you want to do it the right way that I alluded to. So depending on the deal, if this is a transformational deal, these folks should most likely have the word chief in their title and if not that, if you're talking a real large organization, maybe a rung or two below. But they need to have an appreciation for the wider enterprise and anywhere that deal might affect go forward enterprise. So in other words, if I am a COO and I've got my hands into a number of areas, operations, et cetera, or across the operation spectrum, I don't know if I'm a manufacturer of manufacturing to procurement, I may have some other areas in there. Whatever those areas are most impacted by the deal thesis, then that's an appropriate area for, for that type of sponsorship. It's gotta be at that level where you've really got skin in the game and it matters the success of the parts of the enterprise you own as a critical component of whether the deal itself succeeds. So it's gotta be at a fairly high level at that sponsorship level. Again, that's who are accountable. There are plenty of folks who will be responsible in carrying that out. But if you think about one of the fundamental pieces, that stakeholder analysis, it's.

Identifying the sponsors on the when component of it. It sounds like a key element was earlier the better. But what does that look like in terms of timelines? There's going to be some restrictions based on the nature of the deal. Obviously it varies between sign, announced, close. What does that look like? Like how do you see that timeline in terms of thinking through it to get that nice balance of being early in the communication so you don't let messaging get carried away without your control.

Yeah, I think you have to look at it in terms of priorities. So anything that has regulatory restrictions around it has got to be the very first criterion or criteria that you consider. If there are certain things that can't be said within a certain period of time, that has to be priority number one. The last thing you want to do is run a scans of any sort of Regulatory requirements. And then after you've satisfied regulatory requirements, then it's really about okay, what does the deal thesis call for in terms of realizing this plan? So some things happen sooner than others and some things in addition to when they happen, you consider what's the planning look like in order to be able to achieve them in line with the timing of that that do thesis. So that's the second priority is okay look, let's make sure we satisfy anything that's required, not only legally regulatory, but by let's say a purchase agreement. There could be certain conditions that have to be satisfied before certainly a deal is closed and before other things are going to be said and that has to be number one. And then so any kind of legal contractual requirements be the first criteria to dictate what that looks like. Then it's hey, what do I have to do when to make sure we're going to realize value here?

We talked through the sponsorship, we talked through the communication plan you mentioned a couple other ones they we didn't really get into but a training plan, coaching plan. Then I think one other one was resistance Management. Can we touch on those? What's the point of those? Where do they come in play?

These are fairly, hopefully fairly obvious to the audience. But when it comes to training, we really want to make sure that folks are prepared for what we again think this combined entity looks like. So are there new roles for certain people? Is the org chart changing? We've got to get make sure folks have a fundamental understanding of what their duties are. So that's a fundamental piece. On the training side, there are mundane things. Mundane, but can have a real impact on whether or not deals are successful because deals depend on engaged employees. So administrative things like what are my benefits look like now? All those things that all of your HRM and a experts know like the back of their hand that's got to be included there. So I know how as an employee to sign up for this. Or what if I'm, let's say a new employee? I'm going to acquire an employee and things are going to change. I really need to know how to execute on those sort of things so that I'm happy and can focus on my work. And then in terms of training, one of the things that you hear of course a bunch of cliches about but are very important are just getting oriented into the culture. Many deals don't have much of a cultural change. If you're acquiring an entity that's similar to the one you operate, but many others have A ton of just orienting the, let's say acquired employees, mostly in this case to, hey, this is what the acquirer Acme is all about. From the very mundane to how long we've been around, et cetera, et cetera, but to what our fundamental values are and how we live them. So those are some of the things, I'm not saying that's comprehensive, but some of the things on the training side, on the coaching side, you could argue whether, again, it's semantic. So you could argue whether you make these part of one plan or what have you. I'm more concerned with the substance rather than the form. But in terms of coaching, this goes to some of the communication points I made before about coaching folks on what the messaging looks like. Many folks who you're dealing with a larger organization who will be counted on to carry out things like the communications plan, they weren't involved in the deal making. They might not be intimately familiar with the deal thesis. So when you have a good plan that asks them to explain it to frontline employees that may be part of their team, they need to be equipped with what that looks like. And so you may need to coach them not just on what's said, you could do that through an email, but how it's said, as we, as the cliche goes, it's not what you say, but how you say it. And so that sort of coaching and just about all the other changes that someone might go through administratively that aren't directly related to thesis that will help make sure employees are onboarded the right way. That would be fundamental on the coaching side. The resistance is another area and we can get into that for sure. At the highest level, there's always going to be some resistance to change. So that plan's got to talk about how we're going to navigate that resistance, how hopefully we're going to try to mitigate resistance by doing some of the other things we mentioned, having those plans where we've analyzed our stakeholders, we communicate the way we want to, et cetera, et cetera. But standard stuff like having retention plans, retention agreements with employees, again, coming out of evaluating stakeholders, and then contingency plans, because as anyone who's been through any deal knows, the plans never work out perfectly. You could plan to the cows come home. There's always going to be something that falls through a key employee that leaves. Even though you had earmarked that individual and had given them a fair retention plan, et cetera, et cetera. That is another key component to successful change management.

Make all this sound so easy.

No, talking about it is easy. Executing it is another story altogether.

It sounds like these plans, the training plan, coaching plan, resistance management plan, they essentially nest underneath that comm plan.

To me, substance is what's important, not form. So at the end of the day, this should all be integrated. So we think about just, okay, where does change management fit in? We're talking now about the substance, but in terms of that form, it's gotta be part of the broader M and A project plan. It's not simply an integration. Yes, like a lot of the work takes place in the integration phase and a lot of the change management will take place then too. But this is across the deal continuum. You alluded to keys on things that do's and don'ts that you that are important before you even have a signing. Heck, before you even have a letter of intent in some cases. Whether you give them separate labels, the point is to make sure they're explicitly captured and well understood across the enterprise. That ends up being five or six different plans within change management. Or two, that's not the most important thing.

Is a change management work stream a thing? Or is that something that change management gurus made up?

Oh, it's definitely a thing.

So how do you differentiate that between you already have this integration schedule typically broken up by functional work streams?

I tend to think of many of those folks as shepherds. Think of it as somewhat of a PM role in many cases. Because much like a HR pro can tell you the reason an individual probably stays or leaves a company doesn't have much to do with hr. In most cases, it's the relationship with their manager. So that individual manager in the context of M and A may have various abilities from participating in diligence through a heavy dose of work related to integration. Those folks will be responsible for a lot of that execution. But the change management folks can herd the cats and make sure not only the plan is comprehensive, but that execution of the plan gets done. It gets done in the right way. So it's not as if there are separate folks who only do change management and only do or execute all the steps within change management. It's simply you need enough of a presence across the organization to make sure that everything is planned for well and that it actually gets done.

That makes a lot of sense. What about the things that go wrong? What are the challenges when it comes to executing change management?

There's always challenges because it never goes perfectly. But at the most fundamental level, having a plan, so having a documented, comprehensive change management plan Whether it's divided up the way we've talked or as I said, any way you'd like to, that's really the most important thing. Because too often there's a step here or step there and let's say an integration plan or some other aspect of MA activity. But if we don't recognize and acknowledge the need for something comprehensive, then we're at the mercy of circumstance. And so, yeah, we may have addressed a couple of change management related things, but we may have missed a whole group of stakeholders and we didn't realize that they're really going to upset the apple cart and could be as drastic as. We're not even going to get this deal closed, let alone we're going to be unsuccessful in integrating it in such a way that we realize the deal value from the deal model. Having that plan, as fundamental as it sounds, is the most important piece. And then to me, executing the communications plan is huge. You can spend a lot of time on content, but so much is who's delivering the messages, when they're delivered and how. And the larger the deal is, the more people you probably have as participants in that communication plan. And speaking with one voice and at the right time can be really difficult. Let's say a deal closes, you have implications or acquired employees in three or four time zones, maybe across the globe. Someone else jumps the gun and didn't realize the implications for another group of employees in a different area. And then information's leaked out before they get a chance to be told about what the implications are for a deal that was either just signed or just closed. Whatever it is the reputation of, let's say if it's an acquirer scenario, the reputation that acquirer could be severely damaged. You've gotten off on that wrong foot, you've made the first impression is a bad one. And as we all know, those are often difficult to overcome. So executing on that plan, even if it's a well laid out plan, and that communications plan, I personally feel from experience, is one of the highest level order of challenges in change management.

Yeah, this is definitely the hardest parts is having a comprehensive plan and then really being able to execute that all the way through. When you think about getting your stakeholders aligned around that deal thesis, are there any best practices around that? Because I feel that's a common feedback you hear as you get moving through your integration process and that alignment goes awry. How do you keep that from happening?

It's got to be a fundamental part of the communications plan. So clearly you communicate what you're going to do hopefully anyway. It's a fundamental component of communication and thereby change management. But you've got to make communication to that thesis, meaning the biggest part of that is the rationale for this deal. Why is it happening? That's one of the fundamental questions people, both acquirer and target will have. Why are we doing this deal? Invariably, in early stages of a deal, certainly before it's been signed, there is a smaller group that is aware of deal at large and certainly potentially a deal aware of the thesis, the rationale behind that deal, it really needs to be communicated. So in other words, most employees on either side will not know what that is. They could speculate and maybe if it's a really high profile potential deal, there's press leaks. But to really know what that is and particularly what the implications are for me as an employee. And so that's why it's really important that it's part of the content of that communications plan. And I think I mentioned this before, as part of that portion of the communications plan, they need to have an understanding. Okay, how does that deal thesis translate to integration? Because it won't be obvious. You just can't throw a discounted cash flow at someone, most people anyway, and expect them to really glean. Okay, yeah, get the impact from me. Part of that is saying, and it doesn't have to be a quantitative discussion, it can be kept high level. But part of that is saying, okay, look, here's why we bought Company X. Here are the steps we need to take to realize value. In many cases there's a large integration component to that and then need to be able to create a process to transfer knowledge to that lowest level. So going back to the communication plan of certain messages being communicated at a people leader, at the lowest people leader level, at least for those employees that are impacted, involved in the integration, et cetera, is to be able to make sure you communicate what that means to those individual roles. So you could say, hey, part of the rationale for this deal that the way we're going to realize value is we have some purchasing synergies. So then you talk to some of the folks who maybe are affected in procurement and you tell them at an individual manager level role what this potentially means. For me, it's not only including it at large, it's making sure it's linked to the future steps in terms of integration. Then it's making sure it can be described at the appropriate level to make its way to the rank and file. Now here's the reality. You can Execute this really well, and you should, but it doesn't mean people are going to be happy. We could have a great plan to disseminate the deal rationale for a deal that we just signed, but particularly if it involves a workforce rationalization, people aren't going to be happy with it. My point in mentioning that is success or failure isn't necessarily based on happiness, it's based on an understanding. So as long as I know that the employees involved have an understanding of what we're doing, they may not like it, they may not agree with it either. I wouldn't do this, I wouldn't do that. At least they know why. And so we shouldn't hold ourselves to an unrealistic standard that everyone's going to be popping champagne when a deal is announced, a deal closes and we get on to realizing value. But we do owe all those folks who are either called upon to make it happen, or maybe part of some of the more unpleasant side of many deals to at least understand.

That's a really good way of explaining how it starts, shapes and cascades to the various people impacted and involved. It seems like the industry's evolving around how they communicate the why on their deals, where even now in press releases you start seeing a better explanation, a little bit more transparency on that. I don't know if you've just generally seen that that's just a good practice to shape it, but keep it as transparent as possible.

Yeah. I mean, at a press release level, again, if it's a large deal, it's still difficult for rank and file employee to wrap their head around exactly what that means for me, yes, it's a great step and I'm not implying you thought otherwise, but I would emphasize that it is maybe at the very highest level because what you release to the press is maybe even a higher level because it's in a short sound bite or who knows, 280 characters, whatever the medium is that you're releasing public information, let's say a C suite executive talking at a high level to a large town hall is probably a cut below that. And then of course you need to go much deeper so folks have a fundamental understanding. We should realize that this isn't free. Right. It takes time. Time is money, takes resources to craft these things. But invariably it is worth the money in realizing deal value. To the extent you end up running with those folks who believe in what you're doing, who are at the very least amenable if not enthusiastic about the deal, because that's what it takes Depending upon the level of work that comes down the road in integration to make a deal successful. So it's worth every penny.

We got a pretty good overview at this point of what it takes to start thinking of change management. Think of the planning, evolve, the communication. I want to talk about what goes wrong. I want to get more of the what do you do when you got some retaliation, some employees refusing to accept change?

I've always thought that timing is important here. So you've gone through these conversations even down at an individual manager to employee level with the, the wifm, what's in it for them with respect to the deal itself and what's to come. And if they're not bought in, you really need to be able to move on. So firm, quick decisions that would include separating employees that are not only not aligned with the plan, but but maybe actively against it. Those can't happen quick enough. I've seen situations where folks who may not be on board are placated. They may have a particular bit of knowledge that is deemed to be important, so they may be on a retainer or otherwise. The thought is, hey, we need to tolerate this person because we don't have anyone else who can do that. The reality is that sort of resistance can spread like a disease. It can not only affect that individual because too often we're short sighted and think about the damage that a certain person's attitude does to their engagement, et cetera, et cetera. But that spreads to all sorts of other folks. It's like anything else. It's like disinformation spreading on the Internet. It can spread to a whole lot of other people. And I've always seen the most successful. Even if it's somewhat painful because you're losing a skill you'd like to have, et cetera. It's always the best move to make those decisions as soon as possible. Like I said before though, as part of that resistance management, it's a one on one conversation talking about what's in it for them. And what I found in conversations I've had in the past is that when you talk to an individual beyond the deal, so let's say they're in a role that's going away in a matter of time as part of the integration. I've always taken the approach to talk to them about what's important to them for their career. And in many cases where shortly after a deal closes, if in this scenario you're talking about an employee of an acquired company, the top folks for that company probably leave soon after A deal. There's often an opportunity for folks who may be in a more junior level to operate at a level and take responsibility and have a span of control beyond what they'd normally get to. And so I'll often make this point to folks that look, unless your career ends tomorrow, this could be a really great opportunity for you to put another feather in your cap, another line in your resume saying not only did you have this span of control for a period of time, but you did it in the context of a really high profile, high expectation environment, realizing deal value creation based upon an acquisition. Those sorts of things should always be done first. But at the end of the day, if that can't be won over, got to move on. And the quicker you do it, the better.

Let's make up an example. We acquire a company and we got Joey and IT director that we can tell isn't happy about this. And as an executive I'm concerned this person could start pulling wires and really wreak some havoc. How do you deal with that?

In most cases you'll probably have cultivated relationships if you're a large player and you're not a stranger with service providers. So it will cost you a lot more money in the short run perhaps. And there'll probably be some pain because there may be tribal knowledge that you just can't replace despite hiring higher powers gift to it through a service provider. But a situation like that is, hey, I've probably got to separate this resource and move on because the long term value creation is in jeopardy here. Not to mention the level of engagement by M and A almost always takes a higher engagement level, that integration phase, than what folks are used to having in their job. And so without an enthusiastic commitment, it's not just, hey, no, I'm not going to sabotage. You need people who are actually motivated and having those folks around could destroy it. So bringing in another resource, potentially, if you deem it appropriate, sending a lieutenant who's more than eager to take on the responsibility of someone who might need to be separated. And again, I'm not. You've got M and A experts around. M and A science this way better than I do. But that's really one of the ways in which you can combat an otherwise precarious situation like that.

I like how you look at it. You're assessing the severity of the risk and then acting accordingly.

Absolutely. Yeah, absolutely.

Let's say I'm a leader reporting my progress report up gets up to the board and they're like, what's going on? You're way behind schedule and hitting a metric. So now I'm on the hook for it. I'm getting reamed. What do I do? How do I sort of get things back on track so that we can make the progress that leadership wants to see?

My answers there aren't unique to change management, but it's essentially making sure that the individual who may be underperforming and I are completely aligned on what the expectations are, the steps we're going to try to take to get to where we need to be, how we're going to measure success. And in the context of M and A these things might already be captured in the form of a project plan anyway. And then the timing, which again is probably already part of any good plan. And then I'm taking the appropriate action and it may involve the person still enthusiastic about it. Maybe it's just the type of role. So maybe there's a reassignment of responsibility. I'm calling the bench to see what other resource I might have in order to make sure things get done. Maybe there's something revealing even though this person is accountable for it, maybe they haven't been armed with the authority to take the action or didn't think they were with the authority to take action to be able to meet those accountabilities. And so it's that alignment on the expectations, the way we're going to measure it, the timing in which we're going to measure, making sure you have a full understanding of the circumstances behind the current non performance because you may or may not, and then acting accordingly, including having other folks come in, whether that's from within the organization or outside.

How do you approach figuring that out? I'm starting to hit people up one on one to get that information or let's get the group together. What does that approach look like first and foremost?

Probably depends on a few things, but certainly on the org chart if this is a direct report of yours, hopefully you already have a decent feel. But in that case it's a one on one conversation and then it might expand to group conversation. But I think in order to keep the respect of those who are on your team, you shouldn't be going around them before you give them the opportunity to explain themselves. So it would certainly start with that conversation if they're direct. Now if it's a broader issue and spans a number of different accountable individuals, then maybe it's something done at more of a committee level from the get go. But like I said, when it comes to that stuff, you should already have all your milestones in your plan, your project plan, not even change management, and what needs to be accomplished when and who's accountable for it, to me it's just sticking to that plan.

Any other tips and tricks for folks that are going to take on this challenge?

We often talk about culture and there's always a question about what role does culture play in change. I just want to point out that it really depends on how divergent entities are. Let's say that it's a classic acquisition, so you've got two entities involved. They might not have that different a culture, in which case you should never overlook it. You should analyze what cultural impact there is, but you may determine that the risk to deal value realization is fairly low in the cultural realm. It's not always a super hot button issue. Now if you have a classic case of I can remember working with a retailer, fairly traditional cost conscious retailer, and then acquiring a technology company that had half barrels or kegs of beer in the office and had vastly more generous benefit plans, all these other things, okay, potentially how material that deal is, the combined entity, then okay, you've got some real potential issues there and think about the volume of it. With so many other considerations, it's important to have it as a consideration. But then let the deal circumstances determine how crucial or what the impact is. If you want to take it quantitatively. I think about a lot of things, maybe to my detriment, but what's the real quantitative risk to deal value realization? And then you can prioritize it accordingly.

That goes back to getting an assessment, understanding risk severity of it and acting accordingly. What's the craziest thing you've seen in M and A Mike?

When I think about some of the things I can't remember doing some diligence in a past life and of course it's on the qt. This happened to be on premises at the Target. The Diligence team had come up with a storyline behind who we were, et cetera, et cetera. And I can remember a few of my colleagues saying within earshot of or to the same employee in different sequences that they were from two different companies, even though we had said we were from the same. And I can remember this is in the early days, I'm dating myself a little bit, but the early days of LinkedIn and then someone from the target just going to LinkedIn, people had their photograph loaded and I can remember the one individual had a particularly unique name. So it wasn't like Joe Smith or anything like that. And basically the target completely busting him and what that looked like. Of course that's ubiquitous today, but back in the day it was it made for some really good comedy because he had a certain name tag that said one thing and then he had blurted out another, maybe mixing up his deals or whatever the heck it was. But so that made for obviously a memorable because this is a number of years ago memorable and comical experience. So I'm sure others cover got blown.

From his LinkedIn profile.

Totally blown. Well, and he helped it out by initially saying he was with a different company, which probably prompted the search more. It probably would have come out anyway, but I think we ended up doing that deal anyway. But a little bit of in retrospect, of course, comical or comedy and the due diligence phase there.

How to keep her story straight hey Mike, thanks so much for taking the time chat with me today. Enjoyed the conversation and learned a lot.

As always. Thoroughly enjoyed it. Qsan, thanks for having us.

Thanks. And here's to the deal. Thank you for taking the time to explore the world of M and A with our podcast. We love hearing feedback. Tag us on a LinkedIn post, add a review on Apple Podcasts. We'd love to hear from you. If you need help standing up an M and a function or optimizing one that you already have, we're here to help. And if we can't help you, we probably know someone that can. You can reach out to me by email Kisan K I S o n a science.com or you can text me directly at 312-857-3711. If you just want to keep learning at your own pace, visit mascience.com for a lot more content and resources. That's where you can also subscribe to our newsletter. Again, that's mascience.com here's to the deal. Views and opinions explain expressed on MNA Science reflect only those individuals and do not reflect the views of any company or entity mentioned or affiliated with any individual. This podcast is purely educational and is not intended to serve as a basis for any investment or financial decisions.