Avoiding The Prolonged Productivity Slump

By Robin Johnson, Senior Executive Advisor, Global PMI Partners

A business going through a merger or acquisition is a business in transition. And a business in transition needs to understand where their people are emotionally in order to progress forward. Because it’s not the change itself that will do you in. Instead, it’s how, and how quickly, your newly acquired employees transition psychologically and emotionally through the change that will determine the success of your NewCo.

If you’ve gone through an integration before, then you’ve likely experienced the productivity dip that comes with it. If you have not, then surprise! You should expect to experience a productivity slump while you’re adjusting to a new life as NewCo. If you’re not aware, it’s the dip in performance that can lead up to a 50% profit loss. A fairly significant disappointment if your motive for the acquisition was financial.

While the dip may not be unexpected, a dip extending beyond eighteen months might be. And going beyond eighteen months means something isn’t quite right, and it’s time you take a deeper look at what might be causing this prolonged problem. While it might be any number of reasons, my suggestion is to start with your leaders, at all levels.

Why your leaders? Because as your leaders go, so goes their teams. And if your leaders are not interested in moving the transition forward, neither will their employees be. Pay attention to things like, leaders promising to provide information, but don’t, or leaders not showing up to meetings, maybe sending an employee with no decision-making power instead. You might see people just simply not engaged with the transition process. They don’t ask questions and simply do not care about what’s going on. If you’ve noticed these things and you’re wondering what’s driving this behavior, the answer is typically, a lack of trust. And when employees distrust new management, they feel less invested in the outcome of the NewCo.

If you’re new to making acquisitions, then you may not be aware that acquisitions often fall apart during the integration phase, and often because of people and culture issues. And some of those problems start with how of little value those people are made to feel as members of the new organization. If you acquire a company expecting its employees to keep producing the way they were prior to the acquisition, without making them feel welcome, then extended productivity dips might be your experience, which may lead to your questioning your decision about acquiring the company. But this doesn’t have to be your story. You can reduce your people problems by leading in a thoughtful way, starting with how you onboard your newly acquired employees.

Onboarding newly acquired employees

You’re probably used to onboarding new hires. New employees who did their research on your company, spent time learning more about you and the company through the interviewing process, and who are excited to join the organization and help carry out your mission. But what about the newly acquired employees? Those employees who did not excitedly come to your organization of their own volition. As a matter of fact, they may not have even known you and your company existed until the day you showed up and announced yourself as the new leader.

With this in mind, you don’t want to onboard your newly acquired employees in the same manner as you would new hires, so what can you do to help build trust between the two of you? I would recommend you try the New Leader Assimilation. It’s a great facilitated activity that will help jump start mutual trust building. Now, depending on the size of the target company, you may not be able to do this with all of the employees, in which case, you’d do this with your core management team. If you are bringing your own management team, they will do this with the departments they will be leading.

How it Works

Using an external facilitator, the team anonymously submits questions they would like to ask or want to know about you. You might receive questions such as:

How decisions are communicated
How they prefer to receive information
What makes a high performing team player
When and how they can expect performance feedback

Once you’ve thoughtfully considered the questions and how you will respond, you and your new team will come together to discuss the questions. You should do your best to answer all of the questions. Note: more questions may come from the discussions. Also, where a question is unclear, the facilitator should clarify, keeping the originator of the question’s identity hidden. Depending on the number of questions, and the ensuing discussion, a second meeting may be needed.

Depending on the size of the employee group, one-on-one meetings should be held between you and the employees. This, in turn, will allow you to get to know more about each employee. Discussion points might include:

What I’d like you to know about me is…
My single greatest concern is…
An obstacle I face that makes doing my job challenging is…
The changes that need to be made to help me succeed are…
I prefer to receive feedback about my performance…

Questions the leader may ask the team:

What are the team’s preferences for…?
How do team members interact?
What does collaboration look like for this team?
What does the team value?

Try this exercise out. It’s a pretty powerful tool that I’ve used to help teams form and get to know one another better. It will set the tone for trust building and collaboration. And trust is what you’ll need if you expect good performance. Just keep in mind, the more they trust you, the better the performance, which means the sooner they’ll come out of the productivity dip, providing they have all the others tools they need to get the job done. A topic we’ll save for another time.

About Global PMI Partners

When Global PMI Partners started in 2009, our mission was to help our clients simplify the complex task of M&A, specifically by improving their integration planning and execution.
Since then, we have helped hundreds of clients from nearly every sector plan and execute integrations, carve-outs, business transformations and create playbooks to support ongoing acquisition activity.