Change management is one of the most crucial parts of M&A. When you don't plan for it; value creation is in jeopardy. Helping us understand how to deliver effective change management in M&A is Michael DeVita, Business Value Advisor at Salesforce.
"There's always going to be some resistance to change. The goal is to plan how you're going to navigate that resistance" - Michael DeVita
According to Michael, there are two components of change management planning, the stakeholder analysis and the communication plan.
Stakeholder analysis is about identifying individuals or entities affected directly or indirectly by the transaction. These individuals can be anyone from the buyer, seller, debt holders, employees, customers, or even government entities in specific deals. The goal is to evaluate who is relevant, who is not, and who is greatly impacted by the change.
A good communication plan is also part of an effective change management plan. The communication plan should include communicating the deal rationale to the relevant stakeholders. It is crucial for the people impacted by the deal to understand the vision and the goal that you're trying to achieve. Communicating also builds trust with everyone involved, which will foster a good relationship moving forward.
"If we don't recognize and acknowledge the need for something comprehensive, then we're at the mercy of circumstance." - Michael DeVita
You need a comprehensive, well-documented change management plan because the process never runs perfectly. The more people that are participants in communication plan creation, the more difficult it is to speak with one voice at the right time.
And remember, executing the communication plan is vital to success because bad first impressions are difficult to overcome. Make sure that everyone understands the message, who is delivering it, when to convey it, and how to deliver it.
But no matter how much you communicate, you can't please everyone. There will always be people in the transaction that will resist change. Michael advises you to make quick decisions and separate with these employees fast, even if they are key people. Resistance spreads like a disease, eventually spreading to other employees in the organization. Removing or moving around some employees may be difficult to navigate in the short term, but it will be better in the long run.