PODCAST: WHAT COVID-19’S UNCERTAINTY CAN TEACH US ABOUT M&A INTEGRATIONS WITH TRICIA FORBES

April 29, 2020

WHAT COVID-19’S UNCERTAINTY CAN TEACH US ABOUT M&A INTEGRATIONS
WITH TRICIA FORBES

A fair amount of attention has been devoted to what will happen with M&A deal-making once we are on the other side of this pandemic. Fairly consistently, the theories on what’s next end with something to the effect of, “This is unprecedented, and no one truly knows how it will all play out.” Despite the unknowns, there is a lot that we can learn from this crisis to better prepare us for M&A deals moving forward, as Jennifer discusses with Tricia Forbes.

COVID-19’s Uncertainty Has Things to Teach Us About M&A

Jennifer Fondrevay and Tricia Forbes

Watch the Video: Jennifer Fondrevay, Founder of Day1 Ready and author of “NOW WHAT? A Survivor’s Guide for Thriving through Mergers & Acquisitions” discusses what COVID-19’s uncertainty can teach us about M&A Integrations with MiddleM Creative Vice President Tricia Forbes.


Uncertainty’s Influence

A fair amount of attention has been devoted to what will happen with M&A deal-making once we are on the other side of this pandemic. Fairly consistently, the theories on what’s next end with something to the effect of, “This is unprecedented, and no one truly knows how it will all play out.” Despite the unknowns, there is a lot that we can learn from this crisis to better prepare us for M&A deals moving forward.

The common theme between COVID-19 and an M&A integration is the influence uncertainty has over people—and more importantly—how it affects their actions.

Even when an investment thesis is well supported, we only learn if things will actually work at the execution phase of a deal—when we uncover the challenges we hadn’t anticipated. In the current environment, we face a similar dilemma. We’re developing response strategies for the pandemic without a clear sense of what will be most effective. Similar to M&A integration, success is uncertain until we see what people do.

A successful outcome is contingent upon how quickly people will accept the reality of the situation, embrace the roadmap and implement it. This crisis can provide enormous insight into how we approach M&A deals and most valuably, how we execute them.


Traditional Leadership Methods Must Evolve When Navigating Uncertainty

Throughout the crisis, we have seen leaders stumble when they attempt to play by the more traditional rules of leadership—leading with vision, decisiveness and bold confidence. These leaders previously succeeded because they understood the metrics for success and excelled at them. They knew the rules of the game and repeatedly won.

This same type of leader can falter in a crisis because the metrics for success change rapidly, and the game’s rules are continuously being defined. They have a difficult time pivoting in reaction to new metrics and an equally difficult time accepting they might not know all of the answers. More traditional leaders often take longer to act and develop a response plan, which compounds a crisis and prolongs the pain.

When assessing the viability of leadership styles for post-deal integration, we often apply the traditional leadership criteria to evaluate the management team. This crisis is teaching us that those are not always the right metrics.

Over the course of this pandemic, people have been most motivated into action by leaders who demonstrate empathy and humility, are transparent with what they know and don’t know, actively tap others’ expertise to make decisions and role model the behavior they wish to see.  


Learn from the People Closest to the Work

Before COVID-19 was declared a pandemic, many political leaders were sharing incomplete or contradictory information because it was being gathered in real-time and was outside of their scope of expertise. This heightened fear and anxiety (resulting in the hoarding of toilet paper).

When those closest to the work began to share their expertise, we began to get a true sense of what was happening, what needed to be done and how we all needed to behave. When frontline experts shared their knowledge, people had greater confidence in the plan of action, which motivated businesses and community leaders, as well as individuals. We developed a more complete picture of what was required of us and snapped out of denial.

When I consult on the human capital challenges of M&A, I consistently advise my clients to talk with the people who do the work in order to truly understand what it takes to get the job done. Not theoretically—not what it takes based on a sample budget or planned resources. You need to appreciate what the people who actually complete the tasks are up against.

Only then can you get a sense of what the roadmap looks like and what the implications are if some elements of the product or process are missing (say, ventilators or testing). You won’t have a complete picture of a successful post-close integration in your due diligence discussions until you engage your frontline leaders. 


How, Not Just What, You Communicate is Vital to Comprehension and Buy-In

When your statements as a leader contradict what people are experiencing, you lose them. We saw this happen when leaders painted a picture of the virus’ spread and impact that didn’t match what people were seeing in their homes, communities and workplaces. People doubted their leadership, which heightened their stress.

For communications to be effective, your stakeholders need to feel that you know what they are going through and that you are being honest with them. You can’t claim that nothing has changed or that there will be little impact. When people are given incomplete or misleading information, they don’t feel invested in the outcome or comfortable about the decisions they must make—and they no longer trust your leadership. 

Beyond that, information needs to be brought down to an individual, granular level. “What does this all mean for me and what do I need to do?” is what people want to know.

The leaders commended throughout this crisis have explained the good and the bad of what we face in basic terms, and they boil the situation down to personal action. People are more willing to believe in the way forward and feel invested in it if you are upfront with the challenges faced. Give them as much information as possible to help them understand their role and the specific actions they need to take.

Finally, we are seeing on a global scale that the acceptance of change comes at different rates. I noted in an earlier Fast Company article, “There are people who have accepted the reality of the pandemic and have begun to take action, and there are those who have resisted and delayed their change in behavior. People react to change differently. You can’t predict it or control it.”

Interestingly, that is a lesson M&A has already taught us. When I interviewed executives for my M&A survivor’s handbook, “NOW WHAT?”, each of them shared one common realization they wished they’d appreciated going into the deal: reactions to change vary widely, and you need to be prepared for that. 


What Can the Worldwide Pandemic Teach Us About Managing the Uncertainty of M&A?

We have seen the type of leadership that people react to positively. We’ve also seen the leadership that falls flat when people are afraid. We have recognized that the ones closest to the work are those who need to be tapped at the beginning. We have also learned that not all communication is received equally. How it is presented is vitally important to people’s comprehension and what is shared is critical to their buy-in. Ultimately, we have seen that people get to acceptance at different rates. Sweeping change can only begin when a common level of acceptance is reached.


3 Lessons About Leading When People are Afraid

by Jennifer Fondrevay

The coronavirus crisis is a time for calm, confident leaders to really step up. Steady hands can build the confidence needed to ride out the storm.

Right now, there are more people who are afraid than not. It’s a fear driven by uncertainty magnified by the fact that our authority figures—the ones we look to in times like this—don’t seem to have all the answers and consistently contradict one another. That doesn’t lend itself to a calm. 

I’ve experienced numerous business situations where fear was the operative emotion. Mergers, acquisitions, and business transformations bring with them a lot of uncertainty. Even when the strategy or business case seems well supported at the outset, it’s hard to know if it’ll work until it actually happens. In the current environment, we are facing a similar dilemma: We have a response strategy for the pandemic but no clear sense of what the future holds.  

I would never equate the uncertainty that can ensue post-M&A deal to what we are facing now, yet there are lessons learned from those experiences that do apply. In researching my book, Now What? A Survivor’s Guide for Thriving Through Mergers & Acquisitions, I interviewed 60 executives who lead through M&A deal uncertainty. They shared one common realization: everyone reacts to change differently. You need to be prepared for that.

As a manager, maybe you have team members who are fraught with anxiety. Or maybe you’ve even witnessed other leaders melting down, which is having an impact on your team. Based on interviews with executives who’ve repeatedly dealt with uncertainty, here’s how to lead during uncertain times:

Acceptance comes at different rates 

Everyone reacts to change differently. How quickly people accept that change will vary. You can’t predict it or control it. The same can be said of what we are facing now. There were people who quickly accepted the pandemic news and took precautions. But we all saw some who at first said, “This is minor, go about your business.” It’s the equivalent of “nothing has changed.” And then there was a big percentage of people in the middle left wondering what to believe.

Now that we’re weeks into the coronavirus crisis, people, thankfully, have largely accepted that we need to change our behavior for this situation to play out positively.  As a leader, we need to emphasize the importance of taking the guidance seriously and helping our teams accept the new reality.

Fear elicits “survivor” mode

When things are going great, people get along. When things start to go south and people are afraid for their jobs, or in this case their lives, you will see a different version of them—and it’s rarely positive. People go into survival mode. Why do you think the TV show Survivor has endured and remains popular? People are fascinated to watch how someone goes from being a friend and ally to everyone for themselves.

Be prepared for this reality. People who you assumed would be your rock can completely lose it and abandon you. When someone you trusted adopts a self-preservation attitude, it can be hard not to judge that person harshly. Try not to. People’s reactions to fearful situations are informed by their past, and you may not completely appreciate their current family situation. Our present environment, where so much is uncertain, can trigger people’s innermost fears. Recognize this may be the case. That said, don’t dwell on it either. Move on quickly and discover the people who can lead through times of uncertainty.

Look for levelheaded leaders

Once you realize that some previous leaders may not be capable when they don’t have all the answers, be open to the possibility that others who you’d not previously considered as a leader can surprise you. Don’t waste time trying to bring along those you previously counted on if they are losing it—you don’t have time for that. Look to those people who are calm and levelheaded. They may not be the person you thought you’d turn to, but don’t discount the possibility that they may be who can lead now. In times of high uncertainty, people who are afraid are willing to follow those who appear grounded in the face of so many unknowns. 

To keep fear at bay for everyone, two final pieces of advice: make daily communication a priority, and focus on the things you can control, not the things you can’t.

People fill in a lack of information with worst-case scenarios, which ratchets up fear. We’re seeing the fallout of that since the initial COVID-19 communication was limited and contradictory. Be honest with what you know and transparent about what is still being figured out (emphasizing that it is being figured out). Pretending to know it all is not leadership, nor is waiting until you have all of the answers before you communicate. Use technology, frequently derided for isolating us, to connect and communicate. If you help to allay people’s fears, not with uninformed platitudes but with an educated view of what is known and what that could mean for the team, people who are afraid will have more confidence in you. 

The more a team feels in control of what it is doing, the better chance you have of minimizing fear. Don’t waste energy on things you can’t control. This doesn’t mean you don’t develop a plan B. Having those plans can calm fears, showing you’re prepared for potential challenges. But don’t drive yourself crazy with those. Focus on the work and short-term risks to feel prepared, especially since changes seem to come daily. 

Remember: In all of this uncertainty, there is an opportunity to be found. Everyone is figuring out what the new normal is. There’s nothing like a global crisis to level the playing field. While we don’t know today what the long-term effects of this crisis will be, we can rest assured some good things will come if we stay calm, keep our teams focused, and look for the opportunities.

PODCAST: THOUGHT LEADER LIFE WITH MITCHELL LEVY

Jennifer with Mitchell Levy

April 1, 2020

Jennifer connects with Expert Mitchell Levy, a TEDx speaker and international bestselling author of over 60 books.

Here are a few highlights from this episode:

  • Having been through three multi-billion dollar acquisition experiences, I saw how the integration of cultures affects the org on how they perceive their mission and vision.
  • Orgs and companies that are doing #MergersAndAcquisitions have to deal with people challenges and the integration of cultures. How do you overcome those challenges?
  • Mid-market or Fortune 500 companies should think smart when it comes to #MergersAndAcquisitions in order to survive or prevent possible problems.
  • The people aspect when doing #MergersAndAcquisitions must be considered, as well as how to communicate the vision, mission and values in a way that galvanizes your workforce to really get behind them. 

GUEST POST: Marketers: Watch for these common M&A culture pitfalls

As featured on Lisa Nirell’s blog – the original can be found here.

As a new year approaches, I frequently see a litany of growth projections for the coming year. I’m always amused when these forecasts and undermining practices contradict one another.

Take, for instance, the world of mergers and acquisitions (M&A), an area where I specialize. Even in the face of geopolitical and global recession fears, companies are expected to continue pursuing M&A as a growth strategy. Why? Because regardless of whether you are a global, Fortune 500 company or a small to medium size business, it is becoming increasingly difficult to go it alone and succeed in business.

I’m seeing a trend that M&A can undermine—and marketers often ignore at their peril. Glassdoor’s recent job and hiring trends for 2020 study predicts that 2020 will “usher in a culture-first decade for employers…. as growing numbers of companies come to rely on the individual knowledge and creativity of their people as their core business asset.”

During my research for my  M&A handbook, NOW WHAT? A Survivor’s Guide for Thriving through Mergers & Acquisitions, “poor cultural fit” was the most consistent challenge I heard from executives as the reason for M&A failure. In my experience, both sides usually believe their culture is best and stay stuck in their old way of doing things. And today’s ongoing frenzy of M&A deals only make this impasse worse!

As marketing leaders, you know that a strong company culture cultivates a workforce of powerful brand advocates who enhance marketing efforts. What can marketing do to navigate the culture war that ensues in the face of increased M&A activity?

Here are three rules of thumb to consider as you evaluate an M&A deal on the horizon, and when you are in the throes of a post-deal journey:

  1. Come to the union with respect for the other side.
    There is a reason an M&A deal happens – both companies need each other to survive. To find success post-deal, both sides need to come together looking for what the other side is good at– not fixated on what you are good at. You can’t create a stronger marketing plan if you are stuck in how you have always done things.
  2. To appreciate another culture, learn their language.
    In my first acquisition experience, my company, NAVTEQ, was a B2B player while Nokia, who acquired us, was B2C. We had different marketing approaches and consequently, a different culture and language. At the beginning, we spent too much time trying to convince each other our respective language was best. Had we each spent time learning each other’s language rather than trying to force people to “speak our language,” we might have achieved success sooner.
  3. Check your ego at the door and work back from what serves your customer best.
    Staying stuck in your old way of doing things blinds you to the opportunity to create something new and stronger together, something that best serves your customer. When we worked back from what best served our B2B customer, we recognized that it was a combination of Nokia’s consumer research coupled with our expertise on what delivered an exceptional B2B navigation experience.

Checking your ego will likely be the hardest for you to do. As marketers, we tend to be exceptionally proud of what we have achieved. And we should be. We’ve typically put our blood, sweat and tears into making our marketing efforts a success. But you need to always remember, your success in the marketplace post-M&A deal hinges on how well you can work together. Check your ego, bring the best of your strengths to the union, and find common ground.

About the Author:

Jennifer Fondrevay

Jennifer J. Fondrevay is the Founder of Day1 Ready, a consultancy that advises forward- thinking business leaders, owners and C-Suite executives on how to prepare for the human capital challenges of M&A and business transformation. She shares her expertise as a contributor to Forbes, Harvard Business Review, Thrive Global, American Marketing Association, and Middle Market Growth. She is also a frequent podcast guest and keynote speaker.

PODCAST: MANAGE YOUR MESSAGE WITH JIM KARRH SURVIVING & THRIVING THROUGH M&A

Manage Your Message Cover Art for Jennifer J Fondrevay

September 2019

Manage Your Message Cover Art for Jennifer J Fondrevay

MANAGE YOUR MESSAGE WITH JIM KARRH SURVIVING & THRIVING THROUGH M&A

The wrong internal message–especially “marketing jargon”–can derail the success of an acquisition. Messaging has a particularly important role in the effectiveness (or lack thereof) in a merger. Leaders need to know how to communicate the deal internally as well as externally, so that the integration is set up for success.

Jennifer speaks with Jim Karrh about the three forms of “us-versus-them” thinking:

  • Our company vs. their company
  • Senior leadership vs. front-line managers
  • Those who stay vs. those who go (“Everyone thinks the other side got the better deal”)

While the typical pattern is to focus on the financials of a deal and work on the people aspects later, Jennifer says it’s far more effective to consider the human capital involved from the very beginning. She says, “Day 1 of any deal is the moment you first start thinking about M&A as a growth strategy.” Business owners, from that point, approach their decisions differently.

Messaging has a particularly important role in the effectiveness (or lack thereof) in a merger. Leaders need to know how to communicate the deal internally as well as externally, so that the integration is set up for success.

Three of the most important pieces of advice are:

  • Recognize that your internal audiences will likely have a negative view from the outset
  • Avoid clichés (e.g. “nothing is changing,” “this is a merger of equals,” “we expect minimum reductions in staff”) which only serve to elevate skepticism even more
  • Be as transparent as possible

PODCAST: PARADIGM SHIFT WITH CHRISTINA MARTINI

Paradigm Shift Cover Art for Jennifer J Fondrevay

August 20, 2019

Paradigm Shift Cover Art for Jennifer J Fondrevay

PARADIGM SHIFT WITH CHRISTINA MARTINI

Christina Martini and Jennifer Fondrevay discuss how Jennifer transitioned from advertising to marketing and her experience with being part of leadership teams through a series of mergers and acquisitions and the human capital issues that arise during significant inflection points in an organization.

In this episode, Christina Martini and Jennifer Fondrevay discuss: 

  • The importance of human capital challenges and considerations in today’s business world. 
  • The characters you may see during a post-deal landscape. 
  • Talking about the people from the due diligence phase, not late in the deal. 
  • Seeing the opportunity in change. 

Key Takeaways: 

  • Be open minded, have contingency plans, and be nimble in your interactions during inflection points. 
  • M&A transactions are an emotional process for everyone. 
  • Bring on a human capital advisor – someone who can advise as to the people challenges you are going to face during an M&A transaction. 
  • Know what you’re good at, how it contributes to the new vision, and make sure people know that. 

“When you are operating from a position of fear, people act differently.” —  Jennifer Fondrevay