Change management is a natural process following mergers and acquisitions. From the Board to operations, people are required to realign themselves with the new founded entity. The process may involve reshaping, restructuring, new hires, as well as disengaging personnel, regardless of the length of their tenure or contract. These changes are not only smart but essential – as separate entities objective and goals would have been different but as one merged entity, business needs must be redefined across the board.

Most times change management is a challenge. People fear the unknown and act to preserve their interest and long-held authority within an enterprise by resisting change. The reality though is shareholders’ interest boil down to bottom-line: profitability. Rightfully so since it is their dollars on the line when businesses bear losses. Those losses, or gains, are directly attributed to how and who run the shows, from the Board of Directors to senior executives to rank and file. As owners, shareholders appoint the Board and entrust them with certain authority to execute in the best interest of the entity – ideally. Unfortunately, too often, that is not what transpires in reality, as we have seen with AIG, GM, Goldman Sachs and Morgan Stanley and Fannie Mae and Freddie Mac, to name a few.

The question then is what steps should shareholders take to protect their interest and essentially, the business? How are they assured that past mistakes will not be repeated by the Board and their executives? Owners are not involved enough to ensure success, regardless of the reason(s). On the other hand, executives who are hired and entrusted with the well-being of an enterprise must make executive decisions that exclusively benefit the business. If that process require re-aligning their own positions and/or compensations, engaging independent entities for objectivity and proficiency and/or new hires as well as disengaging people, so be it.

People mistakenly credit their positions more than what they really are. The longer a position is held, the more that misconception. Extremely few people are indispensable in the working world. The sooner people grasp this concept, the stronger and more efficient the work force will be. Carl Icahn said it best -

…….. managers have been awarded lavish retention bonuses. In my view, very few managers are irreplaceable, especially in this economy.

On the other hand, shareholders may boost their work force by assuring easy access to them by all on board, be it at AGM or direct discreet communication without the fear of retaliation and/or loosing their jobs. Not the complaint department, where it’s essentially handled by legal to avoid lawsuit, but direct access to share ideas and/or to present business proposition for profitability. Wouldn’t owners (shareholders) be open to ways their business may reach greater heights by accelerating performance, doing more with less (cutting cost), boosting efficiency? As a shareholder, I would.

Mergers and acquisitions bring forth complex problems because the competition within is doubled to protect own self interest – human nature. Shareholders must be more involved, demand more answers – at least during the months following the acquisition. One greatest tool to their advantage is technology – it should be used to strategize, partner and execute.

Tags: acquisition, AIG, Business, change management, enterprise, entity, Fannie Mae, Freddie Mac, GM, Goldman Sachs, mergers, Morgan Stanley, owners, shareholders, Technology
Posted in Best Practices, Business, Technology |