Change management is the tilting point of every deal. Preserving the value that was just acquired is dependent on how key employees are retained. With all the fear and uncertainties in their head, employees need a strong leader. Harry Kraemer, Jr, Professor of Management and Strategy at Kellogg School of Management, believes that effective leadership can overcome change management challenges.
"I don't care what the numbers look like. If you can't deal with the people impacts and the change impacts, the deal is absolutely going nowhere." - Harry Kraemer
According to Harry, change compounded with uncertainty will result in chaos. And during an acquisition, change is inevitable. Therefore, the best thing that a leader can do is minimize tension as much as possible.
Communication is the most effective tool to handle uncertainty. Work with the acquired leadership and address each one of the employee's concerns. There are three steps on how to do this effectively:
Step 1: Tell people what you know. Be as clear and thorough as possible.
Step 2: Tell people what you don't know, why you don't know, and what you are going to do to resolve those uncertainties.
Step 3: Tell people how quickly you can get back to them with an answer.
Leadership is about relatability and influence. The more you can relate to people, the more influence you have, so it is in your best interest to genuinely connect to people in order to lead them better.
A critical role of leaders is to develop their team members and employees. Constantly evaluating your people is one of the best things you can do to set them up for success. Create an effective feedback loop by having constant, open, and continuous communication with employees.
Harry believes that as a leader, you have a moral responsibility to understand an individual's strengths and help them reach their full potential.
As you try to develop people, make sure that you create an environment to thrive. You cannot expect people to take risks if everyone who took risks in the past got fired. So Harry created a four-step model to foster an effective culture.
The first step is to set clear, achievable goals and expectations. One of the biggest mistakes that leaders commit is making assumptions that a team is working towards the goal without clear guidelines. That is where frustrations originate.
Communicate expectations multiple times. It is a known fact that people need to hear a piece of information multiple times before retaining that knowledge.
Each person needs to be accountable for something. You can't just assume they will take responsibility for the goals you have set out.
Whether it's a punishment or a reward, set clear consequences attached to each goal. Otherwise, there would be no real incentive to follow said goals.
Leadership never stops. Even after the deal is closed, you need to continuously be an excellent leader to your acquired employees to create an engaged workforce. Remember that an engaged workforce creates happier customers, which increases your company's profitability.