Hartford Business Journal

October 3, 2016

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www.HartfordBusiness.com October 3, 2016 • Hartford Business Journal 21 BIZ BOOKS Ways to stay relevant in a business world of constant change M ake Change Work: Staying Nim- ble, Relevant, and Engaged in a World of Constant Change" by Randy Pennington (John Wiley & Sons, $22.95). "When will things return to normal?" Never. The Greek philosopher Heraclitus knew that answer over 2,600 years ago when he said: "You could not step twice into the same river; for other waters are ever flowing on to you." Yet, in the face of disrup- tion, uncertainty and things beyond their control, people still cling to the myth of stabil- ity and business as usual. While much of change is beyond the control of any busi- ness, entrepreneurs and man- agers can have a great degree of control when it comes to cus- tomer-driven change. Technol- ogy and innovation have given customers more choices. They measure value in faster, better, cheaper and customizable. To deliver what the customer wants, you must change the organizational mindset. Instead of defining your business in terms of what you produce/provide, think of it in terms of an "opportunistic problem solver with the willingness to adapt." That shift in mindset replaces comfort- zone complacency with a sense of urgency. Inquisitiveness rules. Urgency requires questioning everything to foster continuous improvement through learning, doing — and making some leaps of faith. Employees must become web scourers to find relevant infor- mation. They also need to share knowledge and its sources. When leading change, it's important to realize that its implementation doesn't fit a lock-step project plan. Why not? People aren't accus- tomed to doing things dif- ferently and doing different things. Change doesn't hap- pen because management mandated it. It happens because change-leaders work on connecting the dots of teams and individuals to bring about goal achievement. Pennington's message: Those who read and act on the signs of change thrive; those who ignore them always struggle to survive. • • • Hacking Leadership: The 11 Gaps Every Business Needs to Close and the Secrets to Closing Them Quickly" by Mike Myatt (John Wiley & Sons, $29.95). The essence of Myatt's definition of hacking: To discover alternative paths to "deciphering complexity, influencing out- comes, acquiring access, creating innova- tive customizations to existing/outdated methodologies." Hmm — sounds like it defines key components of leadership. Of the 11 gaps Myatt addresses, hacking the "Leadership Gap" stands as the most important because leadership helps close the gaps of the other 10. Hacking that gap starts with self- assessment. "It is impossible for a leader who is not growing and developing to lead a grow- ing and developing enterprise." Resting on I-made-it laurels shows you define success by where you are rather than how you could grow. You can't play your "A" game unless you continue self-development. You also can't play your "A" game (or expect others to play theirs) when you're satis- fied with the status quo. As a leader, you are a game-chang- er. You need to believe that change propels organiza- tional and individual growth. To hack the gap, a leader also needs a reality check (i.e. what do others think of you and your style and methods). Myatt cites the control as a key indicator of the real- ity check. You expect staff to trust and respect you. Do you trust and respect them? In order to develop mutual trust and respect, you have to let them do the jobs for which you hired them. By ceding control (and with it responsibility and accountability), you actually increase the influence you have. By letting them use their skills, you develop talent and plan succession. The reality check also involves feedback through vigorous debate. "Smart leaders take their business logic and willingly subject it to brutal assault. Don't be afraid of being proven wrong — be afraid of thinking you're right when you're not." The bottom line: "Leadership isn't about checking boxes. Real leaders reshape, reinvent or remove boxes." Doing so turns "what if" into reality. n Jim Pawlak is a nationally syndicated book reviewer. Jim Pawlak EXECUTIVE MANAGEMENT Seven ways to fail at M&A By Andy Singer M ergers and acquisitions (M&A) can be challenging. A Harvard Business Review report noted that the fail- ure rate for mergers and acquisitions runs between 70 and 90 percent. I've been an exec- utive at multiple international conglomerates and can tell you from experience that targeted gains in sales and profits are often not real- ized. Like many other aspects of business, it pays to learn from past experience and learning from fail- ure is particularly valuable. Here are seven ways to fail at M&A: 1. Poor strat- egy: A poor strat- egy and an inability to execute is one of the more common reasons acquisitions fail to meet their targets. I can recall a time a distributor acquired another distributor in their industry. Once the deal closed, the acquirer basically didn't do anything. Both businesses continued to operate separately and compete with each other. The acquisition made little sense from the beginning, as there was no synergy, and the lack of a solid strat- egy only compounded the poor performance. The financial cost for making these strategic mistakes is significant. 2. Inadequate due diligence: Once an acquisition is closed, the skeletons come out of the closet. These surprises are usually the result of poor due diligence. This sounds pret- ty basic, but it happens with great frequency. 3. Lack of leadership: A merger requires a strong and engaging leader. Senior managers must show leadership to employees and walk the talk, or the result will be a de-motivated workforce and poor results. Senior executives must also communicate a common vision of what the new organization is and what it stands for. Without this shared vision the organization will flounder due to lack of leadership. 4. Poor communications: A lack of com- munications, or leaders communicating the wrong message, often leaves employees con- cerned and seeking information from unreli- able sources. Leaders need to let the employ- ees know why the merger is occurring, why the organization is better off and how the merger will affect their work and job secu- rity. There is a much higher chance of failure when leadership allows the "rumor mill" to answer these questions for employees. 5. Overestimation of synergy: Synergy can be over-estimated in many ways — and often is. CEOs would be wise to keep this point in mind. With great frequency, strategy execu- tives look for anything that may help "the math" justify the acquisition, when they feel pressure to make one happen. You might be amazed at how often this happens, but just remember how often mergers fail to meet their targets. 6. Market misjudgment: The acquirer needs to be certain they have an understand- ing of the market. Reading an analysts report, or two, does not make one an expert on a market. I can think of no better example than the telecommunications market of 1999. It is essential that your marketing, product man- agement and strategy teams learn the benefit of understanding "the customer's customer," as they often do not. The impact of new tech- nologies is often overestimated in the short term, but underestimated in the long term. 7. Lack of engagement: There is often a lack of engagement that stalls the progress of merg- ers. Senior executives need to be certain that they work hard to keep all stakeholders engaged. This includes not only employees, but customers, suppliers and owners. Many a merger has failed when the voice of the customer was ignored. Mergers and acquisitions should never be taken lightly. You are bringing together two dif- ferent teams and cultures. In this age of global business models, the complexity is even greater. Before diving in, it is important to remem- ber that acquisitions are risky and failure to meet expected results is common. Be sure your senior executives have a solid, thought- out strategy and consider the issues above, prior to proceeding. By learning from other's mistakes, you can greatly improve your chance of a successful merger for all stakeholders. The upside of a successful acquisition can be substantial. n Andy Singer is the president of Singer Exec- utive Development, a professional training and development company. Andy Singer ▶ ▶ In the face of disruption, uncertainty and things beyond their control, people still cling to the myth of stability and business as usual. ▶ ▶ Like many other aspects of business, it pays to learn from past experience and learning from failure is particularly valuable.

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