The global economic meltdown has radically changed the deal landscape. Research findings from Hay Group reveal that there are several critical success factors for all executives to keep in mind which make the difference between winning and losing in the M&A game.
Whilst the collapse of debt-fuelled financing put the brakes on M&A activity,
the virtual disappearance of private equity investors, reduction of sovereign fund investment and a rush to divest non-core assets to shore up balance sheets, has increased opportunities for strategic M&A investments. And, as always with M&A, the stakes
are high. Has deal-making become a game of Russian roulette for those who pulled
the trigger and chased cheap deals?
This is what led Hay Group to look again at how executives are maximising value from their M&A activities. Are businesses now paying a higher price than they expected? Partnering with merger market, part of the FT Group, we asked global business leaders about their experiences of integrating newly acquired businesses.
Our research revealed that those actually running businesses were not necessarily aligned with shareholders on the rationale of mergers or acquisitions. Whilst half
of respondents said growth was a driver for M&A activity, only four per cent aimed to increase shareholder value through deal-making.
To try and motivate someone by saying, ‘go and read this book’, when they don’t learn that way, is going to be as frustrating for them as it is for you. Especially when you find out later that they can’t do what you expected the book to teach them. However, if you recognize that they need to watch you do something to learn how to do it, then you will organize your time differently to achieve your objectives.
As a leader in a group you need to be aware of your own style too, because it has implications for the impact you make on the team. Without acknowledging your own style you may encourage your team to focus on issues from a certain perspective and miss the opportunities that result from different approaches. A team has a collective learning style all of its own. For example, if you have a group of sales managers who all share a preference for action, they are less likely to stop and think about the underlying framework
and rationale for their actions (with a tendency for headless chicken syndrome!). As their leader, your job is to guide this group and help them to understand the strengths and potential weaknesses or blind spots associated with their learning styles.
Hay Group can help you look at your own learning style and those of your team so you’re better able to tune into the needs of others, to the aims of the group and to the optimal way of using your collective time, resources and capabilities.
Talent Q Dimensions and Elements are unique, online, work-focused psychometric assessments for assessing large talent pools.
Developed by Roger Holdsworth, a pioneer in the field, they measure personality and ability using the latest adaptive testing technology. Talent Q assessments gather data quickly, efficiently and with minimum investment. And they report in ways which can inform a range of talent decisions: screening and selection, matching people to jobs, coaching and development, identifying high potentials, leadership development and team building.
The post-downturn landscape is tough. Recession-battered firms must fight off fast-growing global competitors while heeding customer demands for better service - and employees’ cries for more fulfilling jobs.
Lacking the resources and funding that were available in the boom times, organizations are now compelled to focus on performance: getting more out of what they’ve got.
This means they need to be agile and flexible, especially to cope with the rapid changes that characterize the new business environment. As well as focusing on the hunt for new business, they need to ‘take care of business’, nurturing the customer relationships that sustain them.
Our recent studies show that the firms achieving all this share one thing in common: motivated, empowered employees.The link between employee engagement and performance is well proven. With people prepared to ‘go the extra mile’, our studies show firms can achieve revenue growth 2.5 times that of peers and cut staff turnover by up to 40 per cent. However engagement alone is not enough. Hay Group’s research shows that while nine out of ten employees say they are committed to success, less than two thirds believe they are as productive as they could be. That’s a lot of wasted eager- ness. The missing piece is ‘enablement’ – summed up with the cry “help me help you.”
Hay Group’s research shows that when people are both engaged and enabled, the performance dividend increases dramatically.