Mergers & Acquisitions Leverage
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Mergers & Acquisitions Mergers & Acquisitions Leverage Transforming insights into M&A solutions Vol. 5 Issue 1 2016 Risk. Reinsurance. Human Resources. Editorial Contents It has been an interesting first year. EMEA specifically showed a 5 year low half of 2016. The global economy at USD 428.4 billion – 14% lower than H1 continues to struggle and the IMF 2015ii. Whether we consider H1 deal values, predicts 2016 global GDP growth quarter-by-quarter performance or cross- at 3.16% i. Major economies in border activity, 2016 is showing a drop from Europe, Asia Pacific, Japan & 2015. However, not all regions have shown a the Middle East continue to be decline. China in particular continues to spend 02 sluggish, while there are some on transactions, and this trend appears set to COVER FEATURE bright spots in the US, Germany continue throughout the near future. Germany and India. The impact of Brexit is also appears to have made a comeback from the yet to be fully predicted or 2015 dip, with increased figures both as a buyer Driving Change in assimilated into the European and indeed the and a seller. global economy. Headwinds on the global Times of Organizational economy will continue to impact the overall With this backdrop of global uncertainty with Transformation investment climate, trade and cross-border pockets of opportunity for cross-border and deals. But for individual countries, the inner in-country deals, this issue brings to you articles The Mantra Unlocked market dynamics will continue to drive industry that will help throw light on various elements. consolidations and some organic growth ‘Driving Change in Times of Organizational outside of home country, etc. Transformation’, written by me, explores how we can use lessons from product adoption to 10 The undertones of protectionism and trade adopting organizational change. Javad Ahmad Managing Multiple Integrations: barriers in most US, European and even some then touches on a critical topic in transactions In Conversation with Sunil Asian economies are alarming if they were to retention planning, in his article ‘Skills-Based Goyal, COO of Sopra Steria become policy. The G20 in Hangzhou, China, Workforce Segmentation for Retention Planning reaffirmed the need for protocols to enable in M&A’. global trade, cross-border investment and not allowing protectionism and erection of trade The next article is an interview with Sunil Goyal, barriers. COO of Sopra Steria, in which he shares his 6 insights on managing multiple integrations. Skills-Based Workforce The consolidation pressure has also led to You will then be taken through a real case study Segmentation for global mega mergers in the past 8-12 months from one of our projects, when Faiza Khan writes Retention Planning and an increasing pushback by anti-trust about spin-offs and how they can be the game of in M&A authorities to protect monopolization in certain gain. Finally, this issue concludes with an article global sectors, such as oil & gas, industrials/ by Nisheeth Jankar, on how to ensure your HR 14 chemicals, etc. The Halliburton-BHI merger team is ready for the ‘The Next M&A Deal’. Spin-offs, A Game of Gain: being blocked or other mergers like Dow- Successful Integration of DuPont having to do multiple spin-offs and I hope you enjoy the issue, and as always, we a Global Battery Giant divestitures is therefore also a trend we see welcome your input and feedback! taking hold. Spins and divestitures to unlock value or just to provide better shareholder return are also trends that are likely to increase 20 in certain sectors, for instance with the HPI and The Next M&A HPE spins being notable examples. Sharad Vishvanath Deal: How Ready SVP & Partner, Regional MD Asia Pacific, is Your HR? While M&A activity in H1 of 2016 has hit an Middle East & Africa impressive USD1.71 trillion, this is actually Aon Strategic Advisory an 18% drop from the same time frame last [email protected] iInternational Monetary Fund, World Economic Outlook Database, April 2016 ii Financier Worldwide, Global M&A Value in 1H 2016 hits USD 1.71 trillion All other data: Merger Market, Global & Regional M&A: 1H 2016 Vol. 5 Issue 1 | 1 Feature Driving Change in Times of Organizational Transformation The Mantra Unlocked We often hear that ‘change is the only constant’ to the product itself. For example, Apple products or, during a business transformation, that ‘the key provide a unique and seamless ‘experience’ through to success of this transformation will be effective the user interface, ‘App’ ecosystem and also make change management.’ the user experience ‘cool’. This was the key reason for the rapid adoption of iPods, iPhones, iPads, etc. Given the degree of leadership focus we see on this It is instructional to note that PDAs and tablets that topic, it’s unfortunate that most of the time this is were released earlier than the Apple products have just lip service, with neither thought nor investment not got the same adoption rates. of people and resources being put behind these sometimes lofty statements. Similarly, travel is about the experience, not the destination. Different hotels, airlines or travel Let’s examine how we can view this issue from a providers can therefore provide very different value different perspective altogether. In this article, we at the same or different price point, depending will try to apply some of the key product adoption on the experience they provide. In the context of principles to adopting change during transformation. adopting change, the same logic of focusing on the We read about researched key drivers of product ‘experience’ is key. adoption, and if you look at the most successful new product or process adoptions, some key aspects Change is tough; everyone knows this. But if the emerge that are very insightful. leadership focuses on breaking down the problem and asks the right questions in terms of what an End users adopt ‘experiences’ not service, employee or stakeholder will undergo as an product or initiative ‘experience’ due to the change/transformation If you look at successful services or products that event, half the battle has been won. If the change is have been rapidly adopted, the core truth that runs thought through, driven and positioned in a positive, through them all is that end users are attracted to motivating and exciting manner, it will find many the experience of using a product or service, not ‘fathers’ and champions. On the other hand, a staid, 3. ‘Friction’ Successful in Any Form Change Kills Adoption 1. End Users Adopt 2. Ease of ‘Experiences’ Use drives Not Service, Virality of Product or Adoption Initiative 2 | m&a leverage Vol. 5 Issue 1 | 3 make it easy for them to adopt the contemplated change and to get their input on the change plan itself. If the change is thought End users are attracted to through, driven and positioned the experience of using 3. Refine the plan and execution on scope, in a positive, motivating and a product or service, not prioritization and phasing. Most importantly, exciting manner, it will find to the product itself focus on the actual execution i.e. the tools, many ‘fathers’ and champions organizational support and communication focus you will provide to drive the change. mundane or worse still anxiety causing change ‘Friction’ in any form kills adoption experience is destined to fail even if it has the most The third principle is the unwavering focus on robust change management resources behind it. reducing ‘friction’ in any form towards adoption. This could come from the organization, customer, Of course this is easier said than done. But like in all the app was very simple and easy to use; essentially technology or human interface, sales & distribution, As a post event test, we looked back on our breadth things, keeping it simple works well as an approach: you could order taxis on your phone with one tap, or organizational processes. of experience of driving change in large transactions have a choice of class of taxi to order, know exactly and transformation projects. Interestingly, this 1. First, deconstruct what the change means from when you would get the taxi and get out without To carry forward the analogy from the product & theoretical construct fits perfectly both in successful EACH stakeholder’s perspective. time wasted for paying or waiting for change, etc. service adoption world, imagine a product/service change management initiatives and also where we Just look at the ease of use! This translated into viral that is great, fulfills a critical unmet need, is easy to find that clients faced challenges or, worse still, 2. Second, understand in detail and focus on expansion and customers even being willing to pay use but that has other ‘friction’ issues. For example, failure. The only issue is that in successful change HOW the stakeholder will typically ‘experience’ extra for the ease and convenience. an ‘App’ crashing frequently or being too slow, or a initiatives, this is often followed intuitively rather the change. What could be the positives and new phone being too heavy/unwieldy, low battery than through a structured process or framework as negatives? This can be done through dipstick Now if we apply this to managing change, the key life or heating up, a product/service not being easily discussed above. That could cause the difference surveys, focus groups and open ended feedback is how easy are you making the change to adopt available or any post purchase services being too between the success and the failure of a change questions as well. for stakeholders through process, prioritization, difficult to get, etc.; all of these are reasons that the event if for example a ‘critical non-starter’ friction phasing, incentives (both carrot and stick) and the product/service adoption will massively suffer even point was overlooked.