Post Acquisition and Business Transformation

When taking over a business after acquisition the first 90 days are crucial for setting the foundation for long-term success.  The specific steps you need to take will depend on the nature of the business, its industry, and the terms of the acquisition.  You need a checklist of what you should concentrate on, in what timeframe, who are the target stakeholders, and what tools are available.

This forms your 90-day plan and heavily relies on both the new and previous owner and the new management team to actively work together, which also is an opportunity to build trust and good working relationships.

There are many aspects of owning a business that new owners need to be aware of when they take over the new business.  Following these guidelines will contribute to your acquisition being a profitable asset in the longer term, and not find you have bought yourself a job.  Whilst the timeframe here is 90 days, this can easily be expanded to 180 days if the transition and growth target needs to be expanded so as not to be too disruptive.

The Transition Period: This can be challenging and stressful but the opportunity to make your presence known and to start to build trust at all levels is paramount. Planning the transition before completion gives you time to think about why you are buying the business and how you want to see it managed.

Also, recognise that you only have a short ‘honeymoon’ period to gain the respect and backing of your team.  If you plan to spend significant time with the business for the first 90 days, you will find it much easier to scale back with the confidence the business will be run effectively and efficiently.

The Seismic Shifts: According to Michael D. Watkins in his book “The First 90 Days” there are seven major shifts that owners need to be aware of and adapt to these shifts to succeed in bringing their new team along with them.

        • From Specialist to Generalist: Instead of focusing on a specific domain or function, owners must gain a broader understanding of the entire business.
        • From Tactician to Strategist: Transitioning from handling specific tasks to formulating longer-term strategies and aligning resources to execute them.
        • From Bricklayer to Architect: Thinking about how individual pieces fit together in the larger system of the company or even a group.
        • From Problem Solver to Agenda Setter: Rather than just addressing existing issues, set the direction, and establish priorities for others to solve the specific problems as they arise.
        • From Warrior to Diplomat: Shifting from leading through authority to influencing a broader array of stakeholders both inside and outside the business.
        • From Supporting Cast Member to Lead Role: Stepping into the spotlight and being the representative of the organisation, both internally and externally, when needed. However, this can be limited based on the management team/person appointed to run the day-to-day operations
        • From Analyst to Integrator: Moving from digging deep into details to integrating information from various sources to understand complex issues and make decisions.

       

      Supporting these seismic shifts: involves practical steps you can take to help with the shift in mindset and quickly establish yourself as the owner, gaining the confidence of your internal and external stakeholders.

          • Change the perception of your Identity from that of the previous owner.
          • Manage your time so you have enough to keep your ‘finger on the pulse’ without being absorbed into the day-to-day running and decision-making.
          • Upgrade your skill set to be an informed owner with ultimate authority rather than feel the urge to micromanage, or take control of the operations.
          • Know how to build effective relationships with your management team, key customers and suppliers in a sector you may not be familiar with. Your closest contacts may have been in the industry for many years so earning their respect (and keeping it) will be hard.  The key here is never to pretend you know more than you do.
          • Adjust to the culture of your new business but have a structured plan to gradually change it to the culture you want based on your values. Put in place building blocks to raise the culture through acts of showing you care about what happens in the business and especially to the people who work there.
          • Have a clearly defined growth strategy that you can easily articulate. Clarity is everything.
          • Be confident but leave your ego at the door. Systems run businesses, but people run systems.  Your ‘people’ need to want the business to flourish for you, they need to be committed to the vision and strategy to get there.

          Accelerated Learning: Rapid learning during the transition period is important. There are strategies for collecting information, getting feedback, and building a strong support network. Learning quickly about the company’s culture, politics, and key stakeholders is essential.

           

          Match Strategy to Situation: As the owner, you must assess the specific challenges and opportunities and develop strategies that align with the business’s capabilities. Depending on the situation, you may need to adopt different approaches, such as turnaround, realignment, sustaining success, or reengineering strategies.

           

          Secure Early Wins: Building credibility and confidence among your team and stakeholders is crucial. Try to identify quick wins that are meaningful to the team (small, achievable goals that can be accomplished within the first 90 days).

           

          Negotiate Success: Successful owners actively manage relationships and negotiate with key stakeholders to gain support for any changes required. Building alliances, understanding power dynamics, and effectively communicating the vision are essential components of this process. Having a defined change management and communications process to manage the human behaviour aspects will save you time, misalignment and potentially loss of confidence, leading to loss of business.

           

          Achieve Alignment: As you progress through the first 90 days, you must work to align the business and its resources with your strategic direction. This involves making necessary changes, building and developing the team, and ensuring that everyone is working toward common goals.

           

          Sustain Momentum: Once the initial transition is complete, you must focus on sustaining the momentum. This involves your management team implementing continuous improvement, ongoing learning, and being able to adapt to changing circumstances.