Communication (days 1 through 15)
At the point of closing, communication to employees, customers and vendors is essential to minimize anxiety and potential disruptions to the business. The content of the communication should be tailored for each stakeholder, and include topics such as ownership transition, customer focus, growth and a team-based management style. Shortly after closing, establish long-term communication programs for shareholders, employees, customers and vendors, using input from managers and the employees themselves.
Planning (days 60 through 90)
Clear strategic and tactical plans are essential for building a better business. One way to set the strategy is to hold a two-day, offsite meeting with senior management and middle managers. Share due diligence findings, historical financial data, operational performance data and industry benchmarks with the managers. Armed with this data, new ownership and managers can work together to identify strategic goals and a tactical plan to address growth opportunities, customer satisfaction, human resources, infrastructure, operational improvements and financial management. After this initial planning meeting, the team can produce a financial plan that supports the strategic goals and tactical plan. Then execution begins.
Organizational alignment (days 90 through 120)
Cultural and economic alignment between ownership and management is essential for building a better business. Open communication (e.g. employee surveys, newsletters, employee meetings, events, planning sessions and management meetings) and a team-based management style (which empowers employees and promotes cross-functional cooperation) accelerate the cultural alignment, particularly at companies that previously had centralized decision making and an autocratic management style. Economic alignment is achieved during this period through the creation of incentive-based compensation programs and offerings to purchase or earn equity in the new company.
Tools for execution (days 120 through 180)
After plans are completed and execution begins, establish visual metrics to measure progress versus goals or other benchmarks. Display these performance metrics in common areas of each facility to serve as both a measurement and a communication tool for employees, customers and vendors.
The first six months following an acquisition is a critical period. A properly executed transition plan that provides open communication, strategic and tactical planning, organizational alignment and tools to enhance execution will accelerate the process of building a better business and shareholder value.
Denny R. Bolzan is a principal at Pfingsten Partners LLC. Reach Pfingsten Partners at (847) 374-9140 or www.pfingstenpartners.com.