October 2018
PODCAST: CANVAS WITH JENNIFER FONDREVAY
PODCAST: HORSEMOUTH.COM WITH ELLEN ROGIN
October 2018
HORSEMOUTH.COM WITH ELLEN ROGIN
Selling your business or trying to acquire one yourself? Get insights on the costly mistakes all too common in the M&A process.
PODCAST: MANAGER MOJO WITH STEVE CALDWELL
September 11, 2018
MANAGER MOJO WITH STEVE CALDWELL
Understand The Human Side of Mergers & Acquisitions
Leaders throw the term around like we’re high financiers – “M&A.” The reality is that mergers and acquisitions aren’t only about the numbers. There is a human impact, and too often that isn’t taken into consideration or it is not given the consideration that is due. You think nothing is going to change? Think again. It already has the moment M&A is mentioned, and your people know it. More mergers fail than succeed, and the ill-considered impact on employees is a big reason. The only thing we have in business is trust and credibility. If you give those up during the current M&A project, you’ve given up everything. Don’t undermine the trust you’ve built in the team. Understand the human impact of mergers and acquisitions.
PODCAST: MIDDLE MARKET GROWTH CONVERSATION WITH ACG
September 2019
MIDDLE MARKET GROWTH CONVERSATION
WITH ACG
Jennifer Fondrevay spoke with MMG Editor Kathryn Mulligan about her research into why so many mergers and acquisitions fail, and how acquirers and investors can address workforce considerations earlier in the M&A process.
She discussed the “us v. them” dynamic that can emerge in the wake of a transaction, the common mistake of trying to hold on to key executives while neglecting other employees, and practical steps investors and acquirers can take to address common causes of M&A failure.
Playlist to Get You Through Your Merger & Acquisition Stages of Grief
By Jennifer J. Fondrevay, Founder, Chief Humanity Officer at Day1 Ready
After months and months of speculation, it would seem that thanks to Judge Leon’s decision last week, the AT&T-Time Warner merger/acquisition (a bit confused on terminology because I’ve seen both terms used, but by the way, it’s never a merger) is going through!
“Holy cow!” I bet you’re thinking, “Now what?”
Probably seems like forever that you’ve been in limbo, waiting to learn what’s going to happen next. Describing it [the deal decision] as limbo isn’t really accurate though, because that implies something passive. My experience through three separate multi-billion dollar M&A deals inclines me to think that your past months have been anything but passive. My guess is it’s been a flurry of activity as both sides have been gearing up for the deal to go through, with everybody wondering if it really would. Given all of the articles written about the deal, and whether it will go through, and what it would mean for the universe, and blah, blah, blah, you’re all probably in a state of shock. “It actually went through!?” is what you’re likely thinking, and that goes for both AT&T and Time Warner employees. Defining that “it” as in “what does it mean?” is the question you are going to be wrestling with for the next several months.
As an M&A survivor, I appreciate the emotional anxiety and fear that comes from the many unknowns you face. My goal is to provide rabid transparency on what you can expect since you may not feel like you are getting much of that these days. I offer some advice on how to get through it and most importantly, a playlist of songs to manage the post-deal stages of grief. Because there are stages of grief. Coined by Elisabeth Kubler-Ross, the stages defined the emotions people experience after losing a loved one. They have absolute applicability to how you feel post-deal. The entire M&A journey is an emotional experience. Just know you are not alone in how you feel. That pit-in-your-stomach, wondering “what’s going to happen next?” Millions of us have experienced the same. Over $4.5 trillion in deals have happened each year over the last 5 years. You are not alone. Let’s walk through what that grief journey looks like together.
You’ll spend your early stage in Denial but the ultimate goal is to get to Acceptance. It’s a circuitous path from Denial to Acceptance though because in between are a few more stages to get through. After Denial there is Anger. Getting past that means you’ve moved into the Bargaining stage. And the last stage you feel before embracing Acceptance? That would be Depression. People may use different terms for the stages in the middle, but most would agree — you start at Denial and you need to get to Acceptance. In my continued spirit of rabid transparency let me shed a little light on what each of those stages may feel like.
A friend of mine whose mom was a grief counselor (for people, not deals – though she should have been!) said his mom explained grief this way — “grief is the act of mourning the future that won’t be”. That’s exactly what Denial feels like in your post-deal haze. It’s hard accepting that the career future you’d envisioned isn’t going to play out the way you’d planned. This doesn’t mean to despair, because that future can turn out better than what you’d envisioned, but that better future won’t happen if you hang out in Denial too long. Trust me on that. I’ve been there. I’m not saying to rush through it. You likely had great dreams around your future career path. I am saying that hanging out in Denial only hurts you.
The tough part is, once you get past Denial you are at the Anger stage.
That stage is pretty much what you think it would be. You’re past Denial and have accepted that your company’s been acquired, and now you’re just plain mad. This deal changes everything, and I would surmise that in your view, it’s not for the better. Now there are more people and systems and processes to deal with just when you’d gotten to the point where you knew the drill, the shortcuts and workaround needed to get your sh*t done. “How does this deal make anything better?” you wonder. At this stage, you’re plain pissed. Your feelings are understandable but don’t stay in this stage too long. You’ve got work to do. Venting might feel good initially, but can be blinding to the opportunities in front of you.
Next is Bargaining, the stage where you negotiate with yourself and others to keep things the way they’ve been or go back to the way they were. You want to hold on to the old way of doing things because in your mind they worked well. It’s understandable. You’re thinking, “they acquired us because we’ve been successful at what we do, so why the need to change?” You may spend a good time in the Bargaining phase because you’re most comfortable with what you know. At this stage, survival means being open-minded and flexible. Consider the ideas you’ve had on how to make things better and seize the opportunity to put those ideas into action. Find ways to work with the other side. They are equally reeling. Remember, you’re building towards Acceptance.
The truth? Things are not going back to the way they were. There is a reason you’ve been acquired or merged with another company. Your company leadership determined that survival meant you needed a partner to stay alive. That is the reality of this deal news.
The second to last stage is Depression. You’re resigned to the fact that the deal has happened, and the future you’d envisioned will not be, yet it’s unclear what it actually will be. This period is often called the neutral zone, where you’ve reluctantly released the old way of doing things yet are not 100% behind the new way. At this stage, your thoughts are a bit blurry. You waver between accepting new ways of thinking while not wanting to lose the type of thinking that made you, you. Take it easy at this stage. Don’t make rash decisions. It’s not good to make potentially life-altering decisions when you’re depressed. Resist. Get to Acceptance first. Acceptance does not mean you have to agree with what’s happened, you simply have to accept that it has happened.
Once at Acceptance, ask yourself these questions: is there an opportunity to contribute to the new company vision? If you don’t see an opportunity immediately, is there a possibility to create one? Can you see a role for yourself down the road? Can you learn new skills that will help the company or you in the future? If “yes” is the answer to any of these, these weigh in the positive column. If “no”, meaning you don’t believe your expertise will be valued and the company direction is one to which you can’t contribute, then determine what you want in your future. Don’t be hasty in making any decisions, but be clear about your strengths. Know your value and consider all the ways your value can contribute to the new future. Remember — you have time invested with your company. Starting all over somewhere new will require a whole new level of investment. If you do determine that where your company is going no longer aligns with your values and interests, then begin deliberately crafting your future path.
To help you get through these stages, I offer you this 30-tune playlist. Yes, a playlist. Think about your worst break-up and the song or album you played on repeat (mine all revolved around Anita Baker). Listening to it seemed cathartic, right? Songs — especially ones that capture your mood and feeling exactly — can help you get through the stages. The Anger and Depression stages in particular. Because when you go through a merger or an acquisition, it can feel like you’ve been sucker punched. It is a roller coaster – no other way to describe it. While I’m pretty certain the songwriters did not write these songs with M&A deals in mind, the selected songs capture the sentiment of the stages you are experiencing…. And ideally can help you get through each stage.
My last observation and piece of advice? You won’t move through the stages of grief in a linear fashion. You may go from Denial to Bargaining back to Anger and then Depression. It gets messy. But life is messy and post-deal M&A integration? It’s the definition of messy. But stay positive, focused and have the right attitude and you will get through it. Remember, millions of us have been through what you are going through. Know your value and you’ll be okay. Promise.
p.s. feel free to add song ideas, advice and share away! We’re in this together.
Spotify name: From Denial to Acceptance
Songs include:
Denial
1. Changes – David Bowie
2. Who are You? – The Who
3. (Don’t Fear) the Reaper – Blue Oyster Cult
4. Send in the Clowns – Joan Collins
5. Would I Lie to You? – Annie Lennox/The Eurythmics
6. Manic Monday – The Bangles
Anger
1. Welcome to the Jungle – Guns-N-Roses
2. It’s the End of the World as We Know It – REM
3. Take this Job and Shove it! – Johnny Paycheck
4. Money, Money, Money – ABBA
5. Who’s Sorry Now? – Connie Francis
6. Set Fire to the Rain – Adele
Bargaining
1. Stuck in the Middle with You – Stealers Wheel
2. Give a Little Bit – Supertramp
3. Here We Go Again – Ray Charles & Nora Jones
4. Hard Days Night – The Beatles
5. The Gambler (“know when to hold ‘em, know when to fold ‘em, know when to walk away…) – Kenny Rogers
6. Should I Stay or Should I Go – The Clash
Depression
1. Who Am I? – Les Miserables (Hugh Jackman, Motion Picture version – cuz who doesn’t like Hugh?)
2. Over my Head – Fleetwood Mac (or Echosmith version)
3. Catch my Breath – Kelly Clarkson
4. These Days – Rudimental
5. Lonely Together – Avicii
6. All by Myself – Eric Carmen
Acceptance
1. Always Look on the Bright Side of Life – Monty Python’s “The Life of Brian”
2. When the Going Gets Tough, the Tough Get Going – Billy Ocean
3. You Can’t Always Get What you Want – The Rolling Stones
4. Ray of Light – Madonna
5. Let it Be – The Beatles
6. That’s Life! – Frank Sinatra — Published on June 28, 2018
Culturally Speaking
by Jamar Laster
[Excerpts below. Full article here. ]
The Merger Quandry
Jennifer J. Fondrevay, a chief humanity officer and internationally skilled C-suite executive who has survived three multibillion-dollar acquisitions, says blending cultures after a merger or acquisition can, at its lowest point, become a turf war.
Fondrevay says she frequently sees large companies acquiring small, entrepreneurial companies for their products, spirit and outside-the-box thinking, only to rip apart those aspects at the time of integration. “There are several challenges in blending cultures. Does one culture dominate another? Who decides? What parts of the culture are maintained?”
Fondrevay says that one side might feel that all elements of their culture must be maintained when another side does not value them so much. “And the acquiring company might not feel that they have to adopt any of the acquired company’s culture. They are the acquirers so they may think, ‘Why bother?’”
Surviving the push(back)
Fondrevay, who has founded a merger-and-acquisition consultancy called DAY ONE READY, advocates proper planning from the moment a merger or acquisition is considered, thus allowing time for determining the best parts of both cultures and how they can fit harmoniously. She likens the planning process to a couple getting married and moving into a new home.
“It’s always best for both [people] to move into a new place together, and agree on what furniture to bring to create a new home,” Fondrevay says. She points to Boeing’s acquisition of aerospace manufacturer McDonnell Douglass as examples of successful planning, noting that Boeing went to great lengths to make acquired employees feel valued – even incorporating the McDonnell Douglas logo into its own.
The Human Factor
Even a surging digital presence in business shouldn’t replace a company’s cultural foundation. Fondrevay says to remember your company’s original vision for the product, service or solution that was created to serve a particular audience because those things — and what they stand for — attract people to not only invest in them but also to work for your company.
“There is no different implication for the digital manifestation of your brand and company then there is the static logo and brochure that have always existed for your company,” Fondrevay says. “It is the meaning you bring to that logo and brand that inform your culture, and vice-versa.”
After a Merger, Don’t Let “Us vs. Them” Thinking Ruin the Company
by Jennifer Fondrevay
When a merger or acquisition is announced, people instinctively wonder who “they” are — “they” being the company on the other side. Whether the company is known or not, there’s an instinctive reaction to regard “them” with a wary eye. Cultural differences can…
More and more companies are relying on mergers & acquisitions (M&A) as a competitive growth strategy. Since 2012, M&A activity has increased dramatically in both number of deals and size of transaction, with the yearly value of global M&A deals tracking above $4.5 trillion for the past four years. These are heady numbers and 2018 is expected to continue apace. Yet when mergers are not done correctly, the end result can be at best uncomfortable, and at worst devastating to both companies.
As part of my consulting work on mergers and acquisitions, I created a playbook that defines the best practices for optimizing the human side of M&A. To uncover the human facets and the consistent challenges of M&A, I interviewed 55 executives from multinational to small- to medium-size companies all over the world. The interviewees, who were in the process of an M&A deal or who had recently been through one, included C-suite executives, private equity dealmakers, business owners, entrepreneurs, and middle managers. From these sessions, a consistent theme emerged: M&A often fosters us-versus-them thinking, which can undermine deal success from the get-go.
One of the great ironies of M&A activity is that trust, a key ingredient for business success, often quickly dissolves, as M&A activity is usually cloaked in secrecy. A workforce can feel blindsided when a deal is announced, eroding trust and transparency in three mutually reinforcing ways:
- “Our” company versus “their” company
- Executives versus frontline employees
- Who stays versus who goes
Let’s look at each of these:
Our Company Versus Their Company
When a merger or acquisition is announced, people instinctively wonder who “they” are — “they” being the company on the other side. Whether the company is known or not, there’s an instinctive reaction to regard “them” with a wary eye. Cultural differences can emerge, particularly if the companies have been at different ends of the spectrum in the marketplace. What makes sense on paper — i.e. a high-end product-line company merging with a low-end product-line company — can devolve into an us versus them dynamic as the companies’ different approaches and cultures inevitably conflict.
Consider this example: When The Interpublic Group (IPG) merged the direct-marketing company Draft with the ad-agency Foote Cone & Belding (FCB) to become one agency in 2006, “it was immediately apparent that the cultures of the two agencies were wildly different,” shared Marty Stock, then head of Coors advertising at FCB. “In bringing together a specialist direct-marketing agency with a generalist creative shop, cultural differences were bound to arise, given the contrast in customer approach and sensibilities. The differences drove an ‘us’ and ‘them’ mentality which was never really resolved, and which made integration unbelievably difficult.” Millions of lost dollars from client defections later, FCB split from Draft and reverted back to its origins in 2014.
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Examples of successful acquisitions do exist, however, where the “our” company versus “their” company dynamic is minimized, largely due to the approach of the acquiring company. When Enterprise Rent-A-Car acquired Vanguard’s Alamo Rent-A-Car and National Car Rental in 2007, rather than executing a takeover, it moved slowly and sought to learn from its new brands. “Once the deal closed,” shared Enterprise CEO Andrew Taylor, “Enterprise pursued a deliberate integration. It was far more important to do it right than to do it quickly. We acquired Vanguard at an affordable price, so we could afford a thoughtful approach. When a new direction was chosen, it would reflect the best elements of both cultures and operating approaches.”
Executives Versus Frontline Employees
As senior leaders drive the integration process, midlevel and lower-level employees can begin to perceive senior level executives as getting more than their “fair share.” A perception that senior management is making money off of midlevel employees’ hard work can emerge. Should job losses occur, tensions may intensify as the remaining workers feel burdened “doing the job of many” to implement a strategy that executives, not managers, defined.
Even when there’s been a strong camaraderie throughout the organization, people can feel betrayed when executives leave with robust pay packages. Employees are not ignorant to M&A precedents where even CEOs of failed acquisitions have left with substantial pay packages. In those moments, trust erodes.
Executives have a critical role in minimizing us versus them thinking. Demonstrating commitment to the vision in word and deed is critical, and the pursuit of every activity must tie back to how it fits (or doesn’t fit) with the bigger picture. Nothing undermines change and its adoption more than behaviors by key individuals that are inconsistent with their words. To gain the workforce’s trust you must “walk the talk.”
Who Stays versus Who Goes
Cost-cutting and job losses typically occur in M&A as companies aggressively pursue efficiencies and eliminate redundancies. Deciding who stays and who goes are hard-wrought decisions. Transparency is difficult as executives and managers are either legally prohibited from being more open or don’t know how things will play out. Trust is diluted further when, in an attempt to keep people motivated, early communications sometimes say that “nothing will change,” and yet employees see change happening as people are let go.
Kim Feil, Chief Marketing and Strategy Officer for Aspire Healthy Energy Drinks, who experienced five separate M&A deals as head of marketing for Cadbury, IRI, Kimberly-Clark, Walgreen’s, and OfficeMax, had this to share: “Leaders know that while M&A can make sense on paper, the ability to achieve the vision is only as good as the team you put together.” During her multiple M&A experiences, Feil encountered well-thought-out organizational planning as well as unexpected curve balls. “Who will still have a chair when the music stops becomes the daily question,” Feil added. “So much is dictated by timing and where you are when the music dies. That said, you can’t just hope that things will work out.”
Feil attributes her successful acquisition experiences to upfront planning with leaders from both companies. “The key was focusing on the requirements for success, defining the teams needed to achieve them, and how they would intersect. ‘Who’ did it was not part of the upfront discussion, just the organizational design and structure were considered. Once that was defined, then all potential candidate profiles were considered and names then populated the structure.” What about the names not immediately selected? A clear message arose, consistently shared by executives I interviewed: when experiencing a merger or acquisition, know your value; don’t wait for the company to tell you what it is. Determine how your skills and experience will contribute to the mission and demonstrate that expertise repeatedly. Equally critical? If you determine your skills are no longer valued, find the employer who values them.
While us versus them thinking can undermine deal success, it doesn’t have to. These examples emphasize actions to take which can minimize the downside potential: a well-planned integration with a cohesive culture as the focus; consistent communication and commitment to the transition in both words and actions; and an organizational structure defined by what is best for the customer will go a long way toward positioning the new organization for success.
PODCAST: HUMAN CURRENT WITH HALEY CAMPBELL-GROSS
May 3, 2018
HUMAN CURRENT
WITH HALEY CAMPBELL-GROSS
Haley Campbell-Gross Co-Host of Human Current speaks with Jennifer Fondrevay where they dig into mergers and acquisitions and how organizations can make a difference by rediscovering the humanity in business.
PODCAST: 30 SECONDS CHANGES EVERYTHING WITH KRISTIANE CATES
November 17, 2017
Jennifer talks with Kristiane about helping companies and their employees navigate our data driven, mergers and aquisition era, by helping them tap into the human side of business.
PODCAST: ON THE SHMOOZE WITH ROBBIE SAMUELS
September 19, 2017
ON THE SHMOOZE WITH ROBBIE SAMUELS
A discussion with Robbie Samuels on what defines leadership, the benefits of team trust building, how writing a book is only Step ONE for true impact and the benefits of a pay it forward philosophy (“Always look for how you can give to others.”)
In this episode we explore:
- How I define leadership “The most impressive leaders have a sense of humility.”
- Benefits of building trust in your team and getting positive peer feedback: “I really enjoy working with you, I do my best work when working with you.”
- My “philosophy of pay it forward and give. Always look for how you can give to others.”
- How writing a book is only the first step if you want to have a true impact on the world.
- The benefits of being inclusive when networking and strategies for connecting at events – “The onus is on you. You can always get something out of a conference. If you go at it with the right mindset.”