Understand what you’re getting
into
Before making an acquisition, Cross says
it’s critical for CEOs to honestly evaluate
their management team’s ability to handle
an acquisition and take on the extra work.
Few companies have the luxury of a dedicated assimilation team, similar to the one
at General Electric, and inexperienced,
overtaxed managers will often neglect
their day-to-day business responsibilities
and fall victim to Cross’ assimilation failure
scenario.
“Honestly evaluate your team because
most CEOs don’t have capable managers
just waiting on the bench,” he says. “Either
strengthen your team or find consultants
you trust to help with the assimilation.”
Next, CEOs should set a straightforward
assimilation plan and timetable and then
monitor the results. Cross writes a one-page strategic plan, because brevity makes
it easier to communicate the plan’s goals
and track the results. Then, he meets with
his executive team each Monday to keep
his finger on the pulse of DJO. He also
spends a great deal of time communicating.
“The CEO’s job is to structure and consistently deliver the message outlining the priorities and the goals during the assimilation period,” he says. “Also remember that
you need to communicate with all the
stakeholders. Good communication creates line-of-sight between the CEO’s goals
and the employees, which keeps everyone
focused on the outcome.”
No matter how much experience and
expertise a CEO might possess in executing post-M&A assimilation plans, even the
most finely crafted strategies don’t always
go as expected. Since the merger with
ReAble, both DJO’s president and vice
president of sales have resigned, causing
Cross to wear multiple hats while searching for replacements. He says honesty is
the best way for CEOs to deal with bumps
in the assimilation road before setting a
course correction.
“We wouldn’t buy a company unless we
could see a clear path of what we were
going to do with it, but we also make some
assumptions in the process that may not be
correct,” Cross says. “When that happens,
face the truth, because you’ve got to know
what’s truly happening. If you’re falling
behind your timetable and there’s a flaw in
the assimilation plan, admit it and then set
a course correction with urgency. Do it
today.”
