Merger: One Response to COVID 19

Let's face it, you have to have your head in the sand to miss the small business problems related to the Corona Pandemic. Who will survive? Who will thrive? I just closed an Office Coffee Services business because the American workforce has learned to work from home. My favorite client in our coffee business still hasn't brought their workforce back. On a related note, Pinterest bought out their 490,000 square feet office space for $89.5 million:

"As we analyze how our workplace will change in a post-COVID world, we are specifically rethinking where future employees could be based," said Todd Morgenfeld, CFO and Head of Business Operations of Pinterest. "A more distributed workforce will give us the opportunity to hire people from a wider range of backgrounds and experiences."

Every business problem can be viewed as an opportunity or a problem. Pinterest decided to bite the bullet on millions so they could take advantage of the COVID crisis. We decided to close our coffee business and focus on my consulting/coaching business. If you are a business owner you too have options:

• Continue as you are and hope for the best
• Restructure or morph your business in response to what the future brings
• Close your business and take advantage of the tax benefits
• Hope for more Paycheck Protection from the government
• Open a new business
• Collaborate with other businesses and use buildings as a dual concept
• Merge with another similar company either vertically or horizontally
• For more on your options, check this out. But the overriding point to make is to be intentional with your future!

This article will focus on mergers and acquisitions. But, not from a financial perspective but from a people perspective. I just submitted a coaching proposal to an organization that was acquired in what I would define as a horizontal merger. They offer similar products but one has a niche the other needs for long term growth. Vertical integration is different in that a company acquires another that supports the supply chain in a different way. For example, a pizza company might purchase a tomato sauce company. All pizza companies need tomatoes. This could lead to a competitive advantage if the tomato company is best in class.

But back to my proposal. How does a company being acquired in this crisis help the senior executive team process this change? Answer: Help these exec's see the change as an opportunity for growth. This is a turning point for the senior team. During times of transition, opportunities exist to focus on the past or apply team energy to the transition. A default future is rushing at the acquired company and this future has unknown implications but implications nonetheless. An outside non biased voice will have an advantage over insiders of the acquired company and perceived outsiders of the purchasing company. This is where I can help.

It is perfectly normal for team members feel insecure during an acquisition or merger.

Most people don’t mind transitions if they feel they are in charge of their future. Insecurity grows in the absence of control or when the future is unclear. This presents opportunities to speculate about what is to come. This transition space between a state of order and disorder causes insecurity for the executives of any organization being acquired. The future is not clear and executives have a choice; to recognize the experience as an opportunity for growth or fight the change even to the point of resistance. This resistance comes comes in two forms:

1. Active or overt resistance, and
2. Passive or covert resistance

Not surprisingly, some senior executives cannot see their own behavior because of low self awareness; particularly during a disruption from standard operating procedure. Recognizing and applying emotional intelligence skills and coaching enhances each team member’s ability to manage their emotions, enhance social relationships and think more clearly under pressure. Senior leadership would be wise in exploring coaching opportunities for their executive team. This demonstrates care for your team.

Empathy is one of the defining measures of emotional intelligence

Company mergers are difficult because the culture of each has evolved over time. The culture of each organization is understandable to insiders but not understandable to outsiders. Two companies with two cultures with different languages. Is it any wonder leaders have a difficult time during a merger? This is one of the first places I would start. The understanding and use of language is foundational in my practice. There are actually three principles I apply to all coaching as outlined below:

1. We don’t see the world the way it is, but rather the way we are (Covey). Implied in this principle are differences. If we see the world the way we are then we all see the world differently complete with limiting beliefs, interpretations, biases etc.
2. The way we see the world and the results we are achieving are directly related to the language we use and the voice we give our attention. Two companies using two languages will lead to misunderstanding
3. We change our behavior and our associated results by using transformative language and listening to a different voice. Recognizing the language barrier and the cultural differences will expedite executive understanding and will lead to a successful merger

Self discovery is arguably the most effective form of learning.

I would begin by facilitating a process of self-discovery. This is what every good coach does with all their clients anyway. This discovery process allows the team to not only understand but define action steps. The executive team will be the drivers in the discovery phase of my engagement. That said, I would also introduce a proprietary life coaching process and emotional intelligence training and assessment.

Emotional Intelligence is the key that drives leadership performance farther and faster than anything else you can do: faster than IQ, functional expertise or experience. 

The benefits of Multi-Health’s EQi-2.0, which I am certified to administer come in a variety of assessments; two assessments apply in this circumstance:

1. Leadership Assessment provides a baseline understanding of the health of those assessed with a comparison to all team members assessed. Further, the report provides:

• A Leadership Framework: allows the report to be used with almost any leadership or competency mode
• Leadership Comparison Group: Compare results to hundreds high-performing leader
• Leadership Development: Explores Emotional Intelligence development strategies and best practices that address the challenges leaders face today
• Leadership Potential: examines four key leadership dimensions (Authenticity, Coaching, Insight, and Innovation) and highlights associated and relevant EI skills that help promote success in your leadership role
• Derailers: Identify the areas that may hinder leadership success

2.        360 Leadership Report. As well as the benefits in the Leadership Assessment, the 360 Report provides the following:

• Executive Summary: Showcases your three highest and three lowest scoring sub-scales by quickly pinpointing areas where you excel and areas in need of development
• Leadership Potential: Examines scores based on ratings in the context of four key leadership dimensions (Authenticity, Coaching, Insight, and Innovation)
• Leadership Comparison: Highlights how your scores compare to top leaders. You can focus on development efforts in areas in which you scored lower than other successful leaders to maximize leadership capability

Life Coaching

Emotional Intelligence that addresses 15 core elements and how to manage these emotions with high levels of self-awareness is critical. Life coaching or developing a plan for the future is also important. Some executives will decide to work through the merger. Others will not be able to deal with all of the uncertainty and take action to leave the company. In my practice I have a process that:

1. Looks at one’s past to understand turning points and how each client has previously processed significant change
2. Identifies core values, passions, strengths, weaknesses, preferences and weaknesses
3. Applies the knowledge gained thus far in the process, each executive will develop their unique differentiator
4. Uses a 90-day planning tool, which establishes a set of rhythms and routines that inform behavior and achievements
5. Metrics are identified that determine when each executive feels they have been successful in their initial vision

After decades of leadership experience and several years as a Professional Coach, Creed Branson is launching a new company: Total Quality Leadership Alliance. This organization taps into the strengths of a half dozen leaders who apply their skills to help individuals and business leaders through tough transitions and business growth. We hope to see you healthier on the other side of this Covid crisis.