Look inside many business magazines or the business pages of the national newspapers and there will be lots of discussion about mergers and acquisitions. For many commentators, it’s seen as a reflection of the health of the economy.
But a new book suggests that just over 32 per cent of mergers and acquisitions activity is a success. In around 60 per cent of cases, the acquiring company fails to cover the cost of capital.
The Engagement Manifesto: A Systemic Approach To Organisational Success, by Alan Crozier, looks at how companies fail to exploit what most of them claim to be their greatest asset – their people. One of the key problems with mergers and acquisitions is that, all too often, that “greatest asset” simply gets up and walks out of the door. The new owners fail to make any effort to engage with them.
In fact, The Engagement Manifesto asserts that many employee engagement initiatives are fundamentally flawed: a claim based on Crozier’s 20+ years of consulting and research in this area. A founding director of The Ghost Partnership, he has brought together the experience, expertise and skills of expert consultants who have complementary disciplines in getting better performance from people.
Crozier has also recently been appointed to the government’s task force for employee engagement set up by the Department for Business, Innovation and Skills, following publication of the report by David MacLeod and Nita Clarke on employee engagement and its benefits for organisations and employees.
“Employee engagement became a business buzz-word,” Crozier explains, “but in the rush to reap the benefits, engagement is often misinterpreted. This leads to disappointing results and there is a real danger that companies will give up and miss out on major performance benefits. For example, I have seen companies measuring employee satisfaction and calling that engagement.
“I have seen three published ‘engagement’ surveys in the past 18 months that only measured communication effectiveness. In this book, I show how satisfaction and engagement are different in their antecedents and outcomes, and that communication, while vital and omnipresent, is not the prime driver in this process.”
This failure to understand even what "engagement" means is one of the reasons behind the failure of most corporate mergers. The obvious focus is on getting the deal done, identifying efficiencies, and of course capturing the revenue stream. But companies don’t change – people change them. And the human side of the change agenda is often the Cinderella at the party.
“The CEO [chief executive officer] needs to start the communication and involvement process before the ink is dry,” says Crozier, “and have at least a 100-day plan for getting everyone in the business on the same page as far as the business direction is concerned.
“The key question employees have is of course, ‘what does this mean for me?’ Here honesty and timeliness are crucial. When people don’t know what is happening, they will on average spend two hours a day in fruitless and typically negative discussion with colleagues. This is where value-destruction starts.”
Being aware of those pitfalls, taking the right advice, even simply reading the book and following the strategies it contains would reap considerable financial rewards for businesses wanting to grow effectively in the future.
– The Engagement Manifesto: A Systemic Approach To Organisational Success, by R Alan Crozier, is published by AuthorHouse, 128pp, ISBN: 978 1 456 78574 1.
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