Why pre-pandemic leadership styles are choking successful M&A integrations
The pandemic has also delivered many opportunities for growth, and we are in an increasing M&A landscape as companies take advantage of the favourable deal horizon, and are now starting to build out on their acquisition agendas.
So far so good. But why are integrations now even more complex than they were pre-pandemic?
Leadership Capability
It’s your leadership and change capabilities that are stalling accelerated change. If you are leading the whole or part of an integration the chances are your are in a senior role, and yet this demographic from our experience from the M&A front line, is the leadership group who are struggling the most with mindset requirements and the behavioural shifts needed to change, engage and inspire, and deliver new integrated visions and futures that have both meaning and impact for colleagues, consumers and communities alike.
People & Risk Leaders are at the sharp edge
As many of you who have been through integration will know, it takes many disciplines for effective integration, from change management, communications, the management of risks and dependencies, new organisation design, value creation and building an inclusive for culture of belonging for all. But pre-pandemic leadership integration and flow styles are still being applied to the new post-pandemic world, its causing delay, increased cost, slowing down scale and putting huge amounts of disproportion pressure on people and risk leaders with conflict and disputes. And, investors are wanting rapid returns alongside demonstrable returns in ESG too. So how do we shift and what needs to change?
Senior Leaders are often the blockers
When was the last time you assessed or developed your top team to deliver the contemporary capabilities to deliver accelerated integration in shifting and changing landscapes? Primarily, it’s the senior leadership team that lead integration projects but their capabilities need assessing and developing too and this often gets overlooked as its an assumed talent of a C- suite and functional Director titles doesn’t always equate to effective integration leaders.
Cultural Valuation
This should be a central pillar in the integration proposition that goes across every work stream and every touch point. For many investors, the ability to evaluate the cultural capability through integration can be the difference between an expected return and an exceptional return. Developing and delivering world class inclusive cultures that can measure impact, especially post-pandemic, is now vital along with a ESG integration that is at the heart of the business DNA, that galvanises your colleagues, engages your consumers and brings impact to your communities.
Value Creation Teams
There is often a fear, a sense of trepidation of working with external value creation teams, as only those with the lived experience and a deep understanding of the fabric of functions are internally deemed to be truly capable of successful integration. However, that in itself can decrease the timescales, momentum, effectiveness and efficiency to successfully and objectively integrate. During the last recession those who used external partner value creation teams, delivered higher exit returns and raised more future capital than internal only teams.
Working with Hyper-Growth Companies
We have our own Value Creation Team at Lightbulb and we help hyper-growth organisations integrate their acquisitions and increase the valuation of their companies.
Our unique Lightbulb Leadership Valuation Model ™ enables companies to quantify the value return potential in leadership & management teams, assess their ability to implement rapid scale and change and understand the culture of a potential asset.
Equally, we also use our Lightbulb Leadership Valuation Model ™ when working with ambitious hyper-growth companies looking to secure investment and achieve the highest valuations possible. By using our core findings, we have successfully enabled companies to raise the multiples in transactions, unleash leadership & management team potential and increase the value of the exit return.
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