Personal transitions in acquisitions

When confronted with the imminent sale of their business, employees will focus on their personal issues and this process will continue until long after the acquisition has settled into new ownership.

It is the expectation of change in their situation that first unsettles them, but soon their fears become real as things are changing around them as the deal is finalised and the new owner starts to create a new future for the business. Some won’t stay the distance and will leave, others will resent the changes and be disruptive, while some will embrace the changes and look forward to new opportunities. What is very clear is that this is a personal journey for each employee and simply can’t be tackled with a herd approach.

When employees are confronted with possible changes, anxiety kicks in and they start to imagine the worst. Will I still have a job? What about my planned vacation? Will I be able to take time off for my studies? What if I don’t like my new supervisor or my job changes and I can’t cope with the new responsibilities?

Uncertainties fuel rumors and, of course, rumors support the worst possible outcomes. As an acquirer you need to quell these uncertainties as quickly as possible with both personal interviews to answer questions and group information to show what is happening and to set expectations.

Once the personal situations have been resolved, individuals will then grapple with the changes. Even at this point there are unsettling situations. Some people are likely to be made redundant and so there is a loss of friends and work colleagues. Workloads are likely to increase through the change process as some people leave and systems and processes are changed. Not only does the current work need to be undertaken, sometimes with fewer people, but change brings with it additional work. During this period, organisational changes are occurring, new management and ownership are getting to know employees and, often, new directions are being set.

As the dust settles on the changes, those that have been retained begin to become used to the new environment. Things aren’t quite as bad as they thought. New relationships develop and new friends are made. Life goes on and people start to gain personal security under the new owner. They start to look forward and plan for a future in the newly acquired business.

What is very obvious throughout this period is that each individual must go through a personal transition to let go of the old and embrace the new. Each person will undertake this journey in their own time as they face their own anxieties and fears. Some will quickly move forward, some will resist and proceed slowly while others wont complete the journey and leave or be terminated.

Understanding this process is critical for an acquisitions strategy. Communication of changes, quick resolution of issues and a well thought out process for identifying and resolving personal concerns has to be at the heart of any pre- and post-acquisitions project plan. Failure to recognise the importance of individual transitions will seriously undermine the achievement of acquisition objectives.

Tom McKaskill is a successful global serial entrepreneur, educator and author who is a world acknowledged authority on exit strategies and the former Richard Pratt Professor of Entrepreneurship, Australian Graduate School of Entrepreneurship, Swinburne University of Technology, Melbourne, Australia.