Navigating Career Development for Leaders of Acquired Companies in M&A
Contributor Anirvan Sen
Contributor Anirvan Sen
One of the most momentous occasions in a startup's lifecycle is an acquisition. It's the culmination of years of hard work, a validation of the company's vision, and often a financial windfall. Yet, for leaders of small or scaling-up companies, this acquisition can also bring unforeseen challenges. Among these is navigating career development in the new, often much larger, organization.
The Struggles of Adapting to Formal Structure
In a small or scaling-up company, leaders often find themselves wearing multiple hats, taking on diverse roles and responsibilities that can range from product development to customer service. The appeal lies in the entrepreneurial spirit, the flexibility, and the personal touch, often eschewing corporate formality.
Centurica.com offers premium due diligence for web-based businesses and SMB.
However, when their company is acquired by a mid-market or larger company, they are thrust into a more formal, bureaucratic environment. The systems and structures that make large organizations effective can feel alien to those accustomed to a smaller, more nimble operation. It's not simply a matter of learning new jargon or understanding the company org chart; it's about assimilating a whole new culture and way of working.
Leaders from small companies often struggle with a lack of experience within such a formal structure. Accustomed to a flat, often flexible hierarchy, they can find themselves feeling like fish out of water in the layered, process-driven systems of large organizations. They may be used to working across multiple areas of the business, making decisions on the fly, and having a direct impact on the company's bottom line. The shift to a more compartmentalized, often slower decision-making environment can be jarring.
The Challenge of Career Development Post-Acquisition
Moreover, maneuvering career development post-acquisition can be an arduous task. In smaller companies, career progression is often less structured and more organic. A small team means limited competition, which can result in faster promotions. However, in a large organization, the path to advancement can be much less straightforward.
https://tcomsolutions.com/cyber-security-ma/
In the new environment, career development often becomes a game of strategy and politics, not merely competency and performance. Leaders need to build relationships, prove their worth all over again, and navigate an intricate corporate ladder.
They must also grapple with a sense of identity loss. At their smaller company, they may have been key decision-makers, influencing the company's direction. Post-acquisition, they may feel like just another cog in a much larger machine. This transition can be unsettling and can affect not only their motivation but also their sense of self-worth and job satisfaction.
How to Adapt and Thrive
Leaders of the acquired company must follow a structured approach regarding their career development under the new structure. For some of them, it may be alien and they are likely to struggle the most. On top of that, if there is any mental block to following a formal structure, it will be an uphill battle for them. On the other hand, leaders who may not be experienced with a formal structure but are open to change will find it easier to work through the formalized approach. I’ll call out again not everybody is going to be successful in navigating these formal structures but for the ones who can navigate, we should give them a formal chance.It’s important that we provide the necessary support and resources to help these leaders navigate the formal structures, regardless of their past experiences or predispositions.
But first, let us delve into what formal approach should the leaders of the acquired company follow.
Understand the New Culture: Spend time learning about the new company's culture, norms, and values. Seek to understand rather than judge. Remember that what works well in a small company may not work in a larger one.
Build Relationships: Forge connections with people at all levels of the organization. Networking is crucial in larger organizations, and it can help you gain visibility and understand the unwritten rules of career progression.
Seek Mentorship: Find a mentor who can provide guidance and support. This can be someone within the new organization or outside of it who has experience navigating career development in larger corporations.
Show Your Worth: Use your entrepreneurial skills to your advantage. Large organizations often appreciate the fresh perspective, the can-do attitude, and the innovative approach that leaders from smaller companies can bring.
Stay True to Yourself: Despite the changes, it's important to stay authentic. You were brought into the new organization because of your skills and experience. Don't lose sight of who you are amidst the transition.
The Role of the Acquiring Company Leadership
Acquisitions are not just business transactions; they are also about people. When a larger company acquires a smaller one, it's not just buying assets or technology; it's gaining a team of passionate individuals who've been instrumental in building the acquired company. As such, the leadership of the acquiring company owes it to these leaders to provide an environment in which they can continue to thrive.
Let us explore some of the tactics that the acquiring company leadership can do to support the career development of leaders from the acquired company:
Onboarding and Cultural Integration: An effective onboarding process should go beyond the basics of HR policies and IT setup. It should also include a comprehensive introduction to the company culture and structure. The leaders of the acquiring company can facilitate the cultural integration process by fostering open dialogue, addressing concerns, and setting clear expectations.
Career Pathing: Acquiring companies should provide clarity around career development opportunities. They can hold one-on-one discussions to understand individual career aspirations and collaboratively chart out potential career paths within the new organization.
Mentorship and Coaching: Leaders from the acquiring company should provide mentorship to their counterparts from the acquired company. This can help the latter understand the nuances of the larger organization and build networks. Offering coaching support can further aid in bridging gaps and accelerating their performance in the new environment.
Role Clarity: Acquired company leaders should have a clear understanding of their new role, its scope, and its impact. Lack of role clarity can result in confusion, reduced productivity, and demotivation. Hence, it's crucial to define and communicate this at the earliest.
Recognize and Leverage Strengths: Acquiring company leaders should recognize and leverage the unique strengths and entrepreneurial skills of the acquired leaders. These individuals can contribute significantly to innovation and agility within the larger organization.
Psychological Safety: Creating a psychologically safe environment is paramount. Leaders from the acquired company should feel comfortable voicing their opinions, asking questions, and expressing their concerns.
Acquiring company leadership have a pivotal role to play for the success of both the integration of the acquired company as well as provide opportunities for the leadership of the acquired company to thrive. By taking proactive measures, they can not only help the leaders from the acquired company adapt and grow but also harness their potential to drive the larger organization's success.
Leadership Development Program
All talent and capabilities-centric acquisitions must formally activate a leadership development program for the leaders of the acquired company. Each leader of the acquired company would be assigned a Leadership Development Plan (LDP).
A Leadership Development Plan (LDP) is a systematic and personalized approach to professional growth for leaders in an organization. In the context of mergers and acquisitions, it is particularly crucial for leaders from the acquired company. The LDP identifies key areas of focus for their growth, such as strategic thinking, cross-cultural communication, understanding the corporate structure, building internal networks, and navigating company politics. It gauges the current and desired competency levels in these areas, outlines specific development activities to bridge the gap, identifies necessary resources, and sets a timeline for progress.
Regular progress tracking ensures the effectiveness of the LDP, promoting the leaders' smooth integration and successful navigation within the new organizational structure. The LDP is an empowering tool, giving leaders clarity about their career trajectory and the support they need to succeed in the new environment.
Here is an example of an LDP.
The LDP focuses on goal areas that are critical for leaders transitioning post-acquisition. The development activities provide a path towards achieving these goals, and the progress tracking column ensures regular evaluation of progress. This framework can be customized based on the unique needs and aspirations of each leader. Remember, open communication and frequent feedback are key to the success of any development plan.
Summary
Leaders from acquired companies often face daunting challenges during M&As, including job security threats and uncertainties about future prospects. This process calls for an adaptive mindset and a proactive approach. Tools such as the Leadership Development Plan (LDP), mentorship programs, succession planning, and a strong focus on diversity and inclusion can provide valuable guidance in navigating the new structures and roles.
While it's crucial for these leaders to take charge of their own growth, it's equally important that the acquiring company's leadership take accountability for providing a supportive environment. This is not merely a best practice, but a duty that can significantly determine the acquisition's overall success.
The real value of an acquisition lies in its people. When these leaders thrive, the entire company benefits. The transition from a small or scaling-up company to a large corporation can be challenging, but it's also ripe with opportunities for growth. By embracing the new environment and leveraging their unique skills and experiences, leaders from smaller companies can carve out fulfilling career paths in their new organizations.
Hope you liked this article !
Sebastian Amieva
www.sebastianamieva.com
Create a website in minutes here:
Wise is a cheaper solution to send, spend and receive money internationally. Is a financial technology business based in the United Kingdom. The organisation enables multi-currency accounts and offers international money transfers with over 750 currency routes, including GBP, USD, EUR, AUD, and CAD.
Join Here www.wise.com