My last post discussed building capabilities and was based on the “4 Keys to Building a More Resilient Workforce” article co-authored with my Crowe colleague Lisa Roen. This post reviews the fourth key to building more resiliency – Effective Change Leadership.
Effective change leadership is the driver for executing the three other keys to building a more resilient workforce. For example, effective communications, shaping culture, and building change capabilities depend largely on change leadership up, down, and around the acquirer and target company organizations.
Becoming an effective change leader depends on personal engagement, skills, and commitment rather than job title; any employee can be a role model of authenticity, resiliency, personal leadership style, and emotional intelligence during organizational transitions and transformations.
As noted in my last blog post, building overall change capabilities at all organizational levels is important, and employees should be allowed time for ongoing training and learning – not only to bolster their technical skills or business acumen but to improve their well-being and ability to cope with volatility and stress. The learning and development steps from my last post also apply to change leaders.
The first step is identifying change impact; what is changing for whom, why, what, when, where, and how much? The acquirer should then apply their change impact insights to assess deal value and execution risks. For example, a target company branch office finance function may have less authority, staff, and accountability when an acquirer centralizes decision-making at the corporate level. The risk of losing talented branch finance staff may be low if the corporate staff can absorb their work and deal headcount synergies were expected. However, there may be customer retention risks without a local presence, timely decision-making, and strong relationships.
The second step is identifying change readiness. In the above example, there may be low change readiness if decentralization, customer relationships, and distributed decision-making were targeted company cultural values. If centralization will accelerate an existing target company’s financial initiative, there will likely be greater change readiness.
The third step is designing a change management plan to reduce risks and accelerate the achievement of the deal and integration goals, based on robust project management, and change management framework. There are multiple methodologies and frameworks possible and beyond the scope of this post.
Identifying change leaders based on change impact, change readiness, risks, and deal strategies is the fourth step, and acquirers can apply selection criteria including functional subject matter expertise (ex. financial workflows), prior experience leading change initiatives, stakeholder influence, talent management data, and deal team due diligence observations.
Like any organizational change initiative, creating change leader awareness, building understanding, and increasing buy-in builds change capabilities, integration momentum, the accomplishment of “small enough to win, big enough to matter” victories, and accelerates personal, professional, and organizational success.
Managing Director | National M&A Human Capital Leader | Due Diligence & Integration – Crowe