The Australian advice landscape has undergone significant consolidation in recent years – and given the rising cost of providing financial advice, we can expect even more opportunities for merger and acquisition (M&A) activity.
This M&A activity sometimes occurs among licensees or advice practices; in other cases, private equity firms get involved when they can see value. Whoever’s conducting the M&A activity, though, generally wants the process to go as quickly as possible.
However, there’s a small snafu: when you’re dealing with other humans in the business who are implementing said changes, you can generally only go so fast.
The good news is that with some neuroscience we can actually speed up the transformation process and while keeping those humans productive and happy. So why do humans generally slow down the change management process?
Well, there are some obvious reasons. For one, the brain has a natural resistance to change. And a lack of appropriate leadership skills (especially at the emerging leader level) can hinder the process of guiding people through the necessary changes.
Then there’s the less obvious reason: people have different belief systems, and this can lead to polarisation when you’re trying to get everyone “on the bus”.
The most overlooked M&A hurdle
One of the most overlooked issues that halts transformation is a lack of cultural alignment.
Every business has a culture, and when you’re merging a business of any size, it’s highly unlikely that the cultures you’re merging are exactly the same. In fact, they are far more likely to be quite different – even if they look similar at the surface level.
This often results in an “us and them” situation. Left unchecked, this divide will generally only get wider and even more toxic. So what’s the root cause of this cultural misalignment?
In many cases, businesses haven’t actively invested in creating a clearly articulated culture. When I ask the leaders to articulate the cultures they’re trying to merge (and what they would like that merged culture to be), the responses are generally far from articulate. And if the leaders can’t clearly articulate it, it’s unlikely to roll off the tongue of any other team member.
When you add a lack of leadership skills to a culture that hasn’t been clearly articulated – well, what could possibly go wrong? A lot, as it happens, and it will impact your whole change management process.
Never fear, though, because there’s a simple solution. And it starts with recognising that you can’t just expect people to get culturally aligned by osmosis.
Your “culture on a page”
If you want your culture to be aligned and productive – and there are plenty of cultures which are aligned but unproductive – you need to have it clearly articulated. At Next Evolution Performance, we call it getting your “culture on a page”.
From a neuroscience perspective, the brain hates ambiguity. It goes into overdrive, spending valuable cognitive energy trying to make sense of ambiguity instead of just doing the work. So removing ambiguity, especially around culture, is always a good idea.
Investing in leadership skills for today’s workplace is also essential – it’s not 2010 anymore, after all, and the workplace landscape has changed significantly. You can’t lead in the same way as you did 10 years ago and expect great results.
So what should be included in your “culture on a page”?
To get this really right for maximum change management efficiency, there is a lot that goes in. We have eight half-day workshops’ worth of ideas on this topic. In a nutshell, though, it’s important to set the guidelines for the behaviours, activities and mindset you want people to exhibit every day as they go about their work.
At a minimum, it’s important to include key aspects of psychological safety and accountability. However, including these words alone isn’t enough; you need to unpack exactly what these mean each day. For example:
- What’s your process for disagreeing?
- How do you disagree respectfully?
- What’s your process for running with decisions you don’t agree with?
- What is your process for gaining clarity about getting things done, establishing accountability and holding people accountable if timely delivery doesn’t happen?
- What is acceptable behavior on virtual meetings?
- What’s acceptable when working from home? Can you work while you are looking after kiddos, or not?
- What is your meeting culture and protocols for avoiding unnecessary internal meetings?
- How should people be managing their cognitive energy through the days, weeks, months and years?
There are many more things we could include here, but that should be enough to get you started. This “culture on a page” should become your key culture indicators and people should be held accountable to these – just like they’re accountable for getting the job done.
When is the best time to get your culture on a page?
The best time to do this is when you have more than one person in your business. Obviously, many people miss that boat, so the next best time is now.
Perhaps it goes without saying, but it’s better to have a working culture on a page well before any M&A activity takes place in order to speed up the integration process. If that hasn’t been done already, though, investing in getting this right as soon as possible will significantly increase the speed of the change management process.
Your culture is never “done”
Develop a cadence for how often you review your “culture page” to make sure the language is still serving your goals, and that people are implementing it every day. Once people are living and breathing the desired culture, and leaders are actively coaching it every day, we recommend that a review is initially done every quarter, then every 6 months.
Depending on how much M&A activity is planned, you might keep it at this cadence or settle into an annual review process (as an absolute minimum) when implementation is solid.
Without a clearly articulated culture and up-to-date leadership skills, your growth strategy is a waste of resources. Providing clarity on culture will:
- increase workflow speed for better client outcomes;
- help leaders have the conversations they need to (and quickly) to reduce leadership time;
- optimize the collective cognitive energy of your team – people are doing the work instead of being frustrated with each other;
- people will do their best work in a way that feels easier with less unproductive time;
- increase capacity for more client work;
- increase staff retention and, therefore, decrease turnover costs; and
- lead to more revenue and lower costs, and ultimately a faster change management process for better client outcomes and a quicker payback period.
It’s a win for all involved.
Advisely Partner
