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Change Management: The Critical Accelerator for In-Crisis Transactions


The initial stages of the COVID-19 pandemic caused an overall slowdown in deal making activity in the U.S., with over half of deal makers pausing to see what the pending economic recovery would look like.[1] The future is complex, and we all continue to monitor the evolution of the U.S. economy. In our current context, there are still strategic acquisition opportunities for forward-looking organizations. This is especially true for leaders seeking to acquire divestitures opportunistically as firms pursue cash raising strategies.[2] Likewise, private equity portfolio companies may be able to pursue the acquisition of add-on organizations destabilized or otherwise seeking sale in the face of COVID-19. For organizations willing to tolerate the risk, and with resources available to make key deals, the time could be ripe for strategic acquisitions.

Once due diligence has occurred and the deal approaches closure, however, leaders must also consider how best to successfully integrate acquisitions in a crisis period. With employees already under substantial stress, and organizational change fatigue at play, our experts recommend closely examining how successful change management can accelerate integration success.

Considering Change Fatigue

First, it is critical to understand how change fatigue can derail integrations. Broadly defined, change fatigue occurs when the number of changes in an organization exceeds our ability to adapt to those changes.[3] Change fatigue can lead to exhaustion, frustration, and apathy for employees and leaders. Considering our current ongoing national and global context, these symptoms can also describe a regression phase that occurs for individuals and teams facing a major emergency or crisis.[4] The current state of our economy and society is leaving many of us oversaturated and overwhelmed. This is a real risk for integration success, as ongoing ROI is associated with the effective acceptance of the changes created by an integration across the combined organization.[5]

In the context of M&A integrations, fatigued leaders and employees will perceive announced deals as the source of stress and anxiety. Change management is designed to support organizations through change fatigue to effectively drive business outcomes and employee adoption. This adoption and ongoing execution is critical for value capture post-transaction, as leaders and employees execute on synergies and cost savings

Leaders face an unprecedented challenge. As many teams continue to work remotely, the complexities of communicating and managing an integration multiply. Now, more than ever, leaders driving integrations  must leverage change management to integrate the number one value driver in the combined firm: its human capital.[6]

Three Key Steps to Drive Executive-Level Integration Change Management

We previously detailed how change management can unlock M&A value. The increased volatility, uncertainty, complexity, and ambiguity of our current economic climate has accelerated the necessity to deploy effective change management. Here is our recommend three-step approach.

  1. Cast a Compelling Vision

To create a sense of purpose and combat organizational change fatigue, it is critical that executives cast a compelling and purposeful vision to managers and front-line employees. Having a defined purpose can reduce fatigue, give direction, and unify organizations. It can also aid in overcoming a major hurdle for integrations – uncertainty.[7] Paint the picture for why this integration matters and why it is happening now. Effective change management requires developing a vision that is purpose-centered, future-focused, and relevant to the cultures of legacy organizations. A purpose-centered vision leads to greater confidence in leadership. It also establishes grounds for trusting new colleagues and prompts teams to look forward to the work ahead and the promising future.[8]

  1. Align Executives & Cascade Alignment Through the Organization

Next, it is critical to align executives around the defined vision so that they can collaborate, communicate, and execute. Change management promotes honest conversations with executive stakeholders to understand their needs, concerns, agendas, and ambitions.[9]

Alignment also gives leaders the responsibility and latitude necessary to drive the transaction vision within their own functions and teams. Alignment must not exist only at the executive level. It should start there and cascade across the organization, driven by the leadership team.

  1. Maintain Positive Morale

Change fatigue may be inevitable, but change management provides a process that enables employees to maintain positive morale and be effective in spite of ambiguity. Recent findings indicate that challenging periods are when leaders must be prepared to effectively motivate teams.[10]

To do this, leaders must first manage tensions proactively and empathetically. For example, proactive conversations provide structured, constructive outlets for managers and employees to vent their frustrations, be validated by leaders, and receive the encouragement and support they need to move forward. Change leaders can also detect and prevent routine frustration from escalating into destructive behaviors, such as spreading rumors and developing coalitions to block progress. Effective change management requires continuous monitoring of unproductive activity that can avert efforts to achieve the M&A value proposition.[11]

Second, maintaining momentum and team morale requires rewarding successes and celebrating achievements. This includes thanking employees via both traditional financial incentives and alternative, non-financial incentives. Research shows non-financial incentives can be more successful in motivating employees to do superior work than traditional cash bonuses.[12] This may be especially helpful for leaders seeking to manage costs and maintain cash liquidity in our current economic context. Leaders can consider other rewards, such as flexible work opportunities (made even easier for some organizations still pursuing “work from home” strategies), “ice-breaker” reward activities (such as virtual happy hours during the workday), training and development, and paid time off. These efforts can also be leveraged to integrate functional teams, as they may provide ways to reduce tensions created by meeting new team members while often still working remotely. [13] Working from home may have eroded some employees’ work/life balance, but schedule flexibility can counterbalance this and help improve individual and team morale.

Lastly, consider the current context of employee experience beyond the transaction itself. To maintain team morale in the face of change, acknowledge situational complexity, model honesty, and track small wins. Even small achievements provide a chain of evidence that progress is occurring, energizing teams to continue their patterns of change agility and effectiveness in the midst of fatigue and ambiguity.[14]


In this current period of disruption, change management provides a process by which leaders can accelerate the organizational change required for transaction success. Incorporating these strategies can equip firms to realize value theses, meet synergy targets, and create lasting buy-in and adoption from the C-suite to the frontline employee. For those seeking to acquire in a crisis economy, the value provided by change management cannot be overlooked.

Additional thanks to Linda Pannock for her editorial insights on this article.

[1]“What M&A Looks Like During the Pandemic,” Harvard Business Review, June 10, 2020.
[2] Mark Herndon and John Bender, “What M&A Looks Like During the Pandemic,” Harvard Business Review, June 10, 2020.
[3] See: Ken Perlman, “Change Fatigue: Taking Its Toll on Your Employees?,” Forbes, September 15, 2011.
[4] See: Merete Wedell-Wedellsborg, “If You Feel Like You’re Regressing, You’re Not Alone,” Harvard Business Review, May 22, 2020.
[5] See key trends on change management and adoption in: Tim Creasy, et al., “Best Practices in Change Management – 2018 Edition,” Prosci Inc., 2018.
[6] Learn more: Gerard F. McDonough and Lisa Moceri, “Mind the Human Capital GAAP,” Ankura Consulting, September 8, 2018.
[7] Erica G. Foldy et al., “Sensegiving and the role of cognitive shifts in the work of leadership,” The Leadership Quarterly 19 (2008): p. 514-529.
[8] Thomas W. Malnight et al., “Put purpose at the center of your strategy,” The Harvard Business Review, 2019. See also: Eric G. Flamholtz and Yvonne Randle, Corporate Culture – The Ultimate Strategic Asset, California: Stanford University Press, 2011: p. 109-134
[9] Bruce Patton et al., Difficult Conversations: How to Discuss What Matters Most, New York: Penguin Books, 2010: p. 147-163.
[10] Shawn Achor and Michelle Gielan, “What Leading with Optimism Really Looks Like,” Harvard Business Review, June 4, 2020.
[11] See: W. Warner Burke, Organization Change: Theory and Practice, California: SAGE Publishing, 2018.
[12] Anais Thibault-Landry et al., “Winning the war for talent: Modern motivational methods for attracting and retaining employees,” Compensation & Benefits Review 49, no. 4, (September 2017): p. 230-246.
[13] Brian Salsberg, “The Case for M&A in a Downturn,” Harvard Business Review, May 17, 2020.
[14] Bill Taylor, “To Solve Big Problems, Look for Small Wins,” Harvard Business Review, June 5, 2020.

Mark Herndon and John Bender,

© Copyright 2020. The views expressed herein are those of the author(s) and not necessarily the views of Ankura Consulting Group, LLC., its management, its subsidiaries, its affiliates, or its other professionals. Ankura is not a law firm and cannot provide legal advice.


operations, change management, transformation management, shared services, f-performance, f-transformation, memo

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