It’s no wonder that 70-90% of mergers and acquisitions fail when you consider the complexities of the deal coupled with the sheer change management needed to quell the human factor. In a recent HBR article, How to Keep Your Team Focused and Productive During Uncertain Times, Amy Gallo shares “...employees who are concerned about their future are likely to be distracted and unproductive.”
There’s no room for distracted and unproductive employees if you’re trying to come out of the other end of an acquisition and hit a 30% growth goal. As you may have been able to gather from my previous blogs on Cannon Safe, I’ve never known them to back down from any challenge.
Last year, Cannon Safe partnered with MidOcean Partners to acquire Stack-On in order to “expand our presence in the residential safe and secure storage markets under these iconic brands and best-in-class products, positioning us to truly meet our stated goal [BHAG] of ‘A Safe in Every Home’.” - Aaron Baker, CEO of Cannon Safe, now Alpha Guardian.
Now that the dust has settled from the acquisition, I asked Steve Hoffa, COO of Alpha Guardian, to walk me through what went well and lessons they learned along the way.
1. Be a Reservoir Dog
A what? You know that movie from 1992? You see, I’m not cool like Steve and had no idea what he was referring to. In that ‘you lost cool points’ tone, Hoffa explained:
“We were like the movie, Reservoir Dogs, we strutted down the street. We had a solid plan. We were going to divide up the plan and conquer!”
Steve attributes the research they did through attending conferences and creating a solid PMO to a critical first step and catalyst to their success in their M&A. His advice here is to do your homework and do not rush over or ignore the critical buy-in step to ensure everyone is clear and on board.
2. Start with “Why”
Why are are we acquiring? How does it align with our Core Purpose? How will it attract more Core Customers? How will it accelerate our Winning Moves? Help the core team see how the strategy connects to the acquisition.
A powerful way to share this is through storytelling. Take the team on a journey through the history of the company, the envisioned future, in a real and transparent way. One must never assume the path is clear. Perhaps it is to the executive team who’s obsessively talking about strategy, but, one can’t assume that the message has fully and clearly been cascaded down.
It’s like when you tell the same thing over and over again to several people and you forget who it was you told in the first place; so, you assume all of the key people are made aware. Then you’re all dressed up with nowhere to go because you failed to inform your spouse. Right, Steve? OK, moving on...
Tell the ‘why,’ share the story, be consistent, and, it’s better to retell the story than to risk misalignment. Steve’s tip here is to control the message of the 'why' by getting aligned first while factoring in both the acquiring company and the one being acquired.
3. Keep Your Core Team Focused
The HBR article referenced above emphasizes this as well with, “Research has shown that even small rituals can reduce stress and improve performance, as can incremental progress toward clearly defined goals.”
Cannon Safe continued their discipline of Daily Huddles and Weekly Adjustment Meetings to keep the core business running. Steve said that “Rhythm kept our core team focused on the right things (KPIs and Priorities).” They kept their shared and strong culture top of mind with the ritual of raising the Core Value coin from their pockets.
During times of change, the gift of focus can keep the ores rowing in the same direction. Post-acquisition, Alpha Guardian trained Stack-On employees on Rhythm software and methodology. “It’s part of our culture,” Steve explains.
4. Lower the Water Level to Expose the Rocks
In Alpha Guardian’s detailed plan was a travel schedule to put boots on the ground and “Go to Gemba” or step out of the cubicle and go where the work is done at the company being acquired. They built value streams in every department on how things will get done across the companies. Through this process, they uncovered some of the rocks and discovered some adjustments needed to their plan.
5. Create an Adjust Mindset
The rocks exposed when the water lowered translated into additional operational efficiencies needed in order to hit their profit margins. Steve and team used Plan, Do, Check, Act (PDCA) to set the plan, execute the plan, and, methodically, adjust the plan.
Post-acquisition, adjustments to the 2018 plan were needed, including minor wordsmithing to provide greater clarity for both companies. There was a new mindset shift on how numbers needed to be reported and how they focused on their business. “Rather than looking forward knowing where we could make up ground on our numbers, we had to adjust our KPIs in Rhythm to reflect year over year growth,” Steve explained.
Steve’s tip is to create PDCA-type milestones in your plan to create a clear Check (adjust) mindset.
That’s OK, Steve. Even Reservoir Dogs have to change their badass plans sometimes. Did I win back some cool points?
Photo Credit: iStock by Getty Images