Integration is a process, not an event (Part 2)

'Change' is at the heart of our work: organizations need to constantly adapt and transform so they can improve, compete, grow and often also survive. One of the specifically challenging areas of transition is that of Merger & Acquisitions. In part 1, we shared some guidelines of our Post-Merger-Integration (PMI) approach as well as key principles of systems thinking. In this article we will show you how exactly we use systems thinking in the PMI process.

When we are involved in supporting two organizations in a merger transaction the principles of systems thinking lead our work. In a brief digression in part 1we focused on two key elements of the systems thinking approach: (1) Systems don´t like change, and (2) each system consists of interdependent parts and each part contributes to the whole.

Thus, the interventions we design are aimed at interactions of parts and not designed for individual members of the system. We are trained to find interaction dynamics and patterns within your organization and what the purpose is of patterns for the system as a whole. Only then are we able to intervene and help change the system.

In the Merger & Acquisitions (M&A) process we look at dynamics in both companies and map the various organizational patterns and their meaning. They help us understand where to put the focus of our efforts. Although each M&A process involves different organizations we have been able to design a standardize systemic approach to support the parts to shape a newly integrated and healthy organization.

Typically, a PMI process consists of a series of practical workshops, team support (optional) and leadership coaching. These activities are an effective way of managing below the surface forces that have a massive impact on the overall success of the merger. Simply put: on both sides change readiness needs to increase.

The workshops are designed for employees from both organizations who are expected to trust, collaborate, communicate, co-create and quickly contribute to new strategic objectives. In the workshops, they make the necessary transition from the old to the new as a collective and we guide them through the four inevitable phases of below the surface transition making it easier for them to change.

Four phases of transition

1.The first phase - 'The Why'
It’s about creating a mutual understanding of the 'why' of a merger: people don’t change without a sense of urgency. We all have examples of good intentions for quitting smoking or eating less that greatly fail because we lack a sense of urgency. The same goes for organizations: without a clear ‘what happens if we keep doing what we always have done’ – nothing will move forward.

2. The second phase - 'The Letting Go'
Each change comes at a price. What is it both sides will lose? What do they need to let go off? There is a natural tendency to emphasize the positive change that lies ahead as a direct result of the merger. A systemic principle is that what you exclude will find a way back in. The pain is also part of the whole and needs to be acknowledged.

With clarity on the why, acknowledgment of the old, an eye for the contributions and sacrifices people made, they become more inclined to make the next necessary steps forward towards something new.

When this part of transition has been felt a period of uncertainty arises. It is the space between what is no longer there and what is not there yet.

3. The third phase - 'The Unknown'
In this grey zone area people will try out innovative ways of working, new ways of organizing themselves and most likely fail many times. This is the phase for most of the organizations in which the struggle is the hardest and doubt sets in: change-decisions are reversed because employees are demotivated, customers complain, sickness rates go up and results go down. The system is working hard to return to its comfort zone.

It is important managers are prepared for the rising problems and they are enabled to help their people with uncertainty and disappointments. We provide the necessary support to managers and leaders to navigate their teams through this stage. Becoming comfortable with the unknown is the mind-set needed for a successful transition. Learning loops and feedback practices are tools that become an integral part of the manager’s toolkit.

By the end of this phase innovation is possible and often new ideas are born. The pain is left behind, and the new organization is ready for the last phase.

4. The fourth phase – 'The fresh start'
A phase in which we acknowledge how far we have come and what are the lessons learned. We celebrate and prepare, most likely, for the next change that is already showing its first signs. This is when we step out of the process and leave behind a strong, healthy new organization, department or team with competent leaders and managers that are capable of driving and monitoring upcoming changes.

If you would like to receive further information on our PMI approach, please consult our website or contact us to arrange a personal appointment with one of our consultants.

More details can be found on the following two pages:
INTEGRATION IS A PROCESS, NOT AN EVENT (PART 1)
POST-MERGER-INTEGRATION