Learning More Than How to Keep Your Job

Making a successful transition from pre- to post-acquisition is an experience rich with learning, though on the surface it may seem like a survival exercise. You won’t learn much, however, if you invest all your energy in just surviving. Although you certainly need to make the right connections with people in the new organization, this isn’t your only responsibility. Some individuals are brilliant at surviving mergers and acquisitions, but this skill doesn’t make them leaders; they’re just good at keeping their heads down and looking like they’re on board.

I think leaders who do not expose themselves to their people, who don’t make themselves vulnerable to their people, can’t effectively lead because people aren’t going to think you are real. If you shoot the messenger, that’s going to elicit a certain kind of response. If you are going to respond to disappointment instructively, I think that’s when people are with you forever. I think those are great leadership moments.

Joseph Berardino, former CEO, Andersen Worldwide

In previous chapters, we’ve saved the learnings for last. Here, we want to introduce you to them first because what you learn during this passage is more subtle than in some of the others. You’ll be more motivated to take the actions we recommend later if you understand the five ways you can grow as a leader after an acquisition or merger:

1. Figure out new rules quickly and start playing by them. More than ever before, leaders need to transition from one set of rules to another. This is true, not only after mergers and acquisitions but in all sorts of other leadership situations—changing companies, working in another country, adjusting to a new CEO, and so on. After a merger or acquisition, your effectiveness is predicated on your ability to perceive what the new rules are about, how resources are acquired, how short cuts are taken, and how coalitions are formed. These rules may be quite different from what you’re used to, and you need to be observant and ask questions in order to figure out the new system. The faster you’re able to do this and incorporate what you learn into your standard operating procedures, the more successful you’ll be as a leader.

2. Remain a strong leader despite your sense of vulnerability. This is a tough lesson for many leaders to learn, but an acquisition or merger is a powerful teacher. Many top executives we’ve worked with have told us that in the wake of these events, they feel like someone has taken away their company, that they’ve lost their identity. In the past, their identity, sense of competence, even their leadership values were directly derived from their company role. They took great pride in their company’s reputation, market position, and culture, and their leadership style reflected the company’s style. When the company changed virtually overnight, both this identification and their self-confidence were immediately eroded. Without their established identity, many executives feel vulnerable and weak, even wounded.

   Learning to lead effectively with a wounded ego is a skill leaders need. An important part of leadership development that is rarely taught in the classroom is the ability to manage one’s ego in key situations. There are times when good leaders must recognize that a direct report’s idea is better than their own, that a customer’s requirements supercede their own plans, or when negative feedback from a peer is accurate. In other words, they must demonstrate strength of character, even when they feel weak inside, and this passage facilitates the acquisition of this strength.

3. Transcend the politics while focusing on the mission. Politics can be tremendously distracting. Although good leaders are aware of political situations and know how to work effectively within them, they don’t become so enmeshed in jockeying for position that they lose sight of their group or company objectives. Politics always accelerates after a merger or acquisition. Great leaders maintain their focus despite the political maneuvering. This is a good skill to have, in that it’s easy to become distracted from your mission by politics, even when no merger or acquisition has taken place. In all companies, politics—the informal negotiation and exchange of power and influence to achieve outcomes—is a way of life, and the high-performing leaders don’t eschew politics; they handle it with both integrity and flexibility. No matter what’s happening around a good leader—loss of resources, removal of a key supporter, setback from a client or customer—she continues to drive toward key goals.

4. Maintain an open mind. People are tempted to become defensive after their company is acquired. We see this often in coaching leaders through the acquisition process. An us-versus-them mentality develops, and more than one leader thinks to himself or says to others, “This is not as effective as the way we used to do things around here.” It’s natural to be close-minded initially; your feelings of betrayal have an impact on your perceptions. Gradually, however, the post-merger environment provides you with opportunities to grasp that “the new guys” aren’t so bad. Many executives we’ve interviewed who have gone through this passage talk about an “Aha!” moment that occurs when they realize they have more in common with the new senior management and their culture than they realized. This can be a gradual realization or a sudden, shocking one, and it helps them understand that they should not hold tight to assumptions that may prove to be invalid. Open-mindedness is a quality that leaders can develop in other passages, but living through an acquisition or merger accelerates this ability, opening people up to other ways of running a business.

5. Create a new network. Again, this is a skill that leaders can acquire in other passages, but after a company changes hands, the need for building a new network is critical. It’s a different relationship-building challenge from those in other contexts, especially for leaders who have been at one company for years and have never experienced a merger or acquisition. Becoming adept at internal networking is an increasingly important skill for leaders in virtual or matrixed organizations.

Rebuilding a network is also necessary within a volatile business climate in which downsizings, re-sizings, and acquisitions are typical. We have worked with companies in which associates have lost their mentors and allies in a matter of months through downsizing or transfers, or when people resign to take other jobs. In these instances, it’s incumbent on leaders to find other sources of support and sponsorship.

One of the things a leader learns in a crisis is to think more about whether people are really with you emotionally as well as intellectually. Intellectually, most people are smart, and they are part of the game and they know what you are going to report. But that’s not enough. I think you need people with you emotionally. That takes time. You don’t do that in memos, and you don’t do that in meetings. You do that spending time one-on-one with people, getting to know them. In terms of bringing people along, you need to spend time with them on a human level.

Joseph Berardino, former CEO, Andersen Worldwide