Underneath the visible surface of a merger or acquisition, deeper issues can cause uncertainty and upheaval. With M&A firmly on the construction industry’s agenda, how can tier two firms and below prepare for change?
It’s not always easy to predict what will happen in construction. But if there’s one thing that has and always will happen, it’s change.
Despite construction workloads continuing to grow in the last quarter according to the Federation of Master Builders’ State of Trade survey, we’re still seeing a number of mergers and acquisitions in the sector – and these do not just include larger contractors, but tier two firms and SMEs as well.
We’re also hearing how the Right to Buy scheme may force smaller housing associations to seek mergers with larger firms, as well as the recent trend for big consultants to snap up niche businesses.
Mergers and acquisitions in tier two firms demonstrate something of an iceberg effect - the visible tip is the flurry of press and publicity at the time of the announcement, yet underneath the surface lie much deeper issues, including the uncertainty, upheaval, career chaos and consequences for everyone involved.
Despite the inexorable nature of change, many businesses are not prepared for it and their employees often resist it, reducing the potential for positive outcomes and continuous improvement.
Yet the unseen effects on individuals can be more positive than negative.
“Successful businesses not only embrace external change but actually embed proactive, positive change into their business culture”
They might include a wider range of promotion prospects within an enlarged company, favourable perks and benefits with the acquiring company, or a new reporting structure that treats talents more favourably.
Successful businesses not only embrace external change but actually embed proactive, positive change into their business culture, which enables them to maximise opportunities, manage risk and drive business development.
Staying the same is a recipe for decline, which explains some of the thinking behind mergers and acquisitions, but how do you ensure the entire team embraces the change to maximise the potential for continuous improvement?
The first step is to define change and recognise its symptoms, because in order to manage change you need to understand the causes of it and what implications it will bring.
A merger or acquisition can occur for many reasons – fluctuating market conditions, supply chain issues or technological advances among them.
As a result of a merger, internal factors can also cause friction, including anything from implementation of new processes to a change of management team.
“A business that has mastered change management at all levels will be better able to predict and drive change”
A business that has mastered change management at all levels will be better able to predict and drive change, using it to enhance the company’s performance rather than threaten its stability.
While it is human nature to be reticent about change, empowering your team at all levels to identify opportunities for positive change, and then drive and deliver it, will help to engender a culture where it is an integral part of positive business improvement.
In this way, you can convert it from the enemy of the status quo into the catalyst for building a better business.
Developing this positive approach to change across a business will not only enable you to drive continuous improvement, it will also help to boost morale and motivation.
An employee that feels part of something positive and can take a level of ownership for delivering change will see a greater sense of purpose in their job and will understand their role in the company’s success.
For a company to succeed in mastering change you need to equip yourself with the tools to lead and create a high-performance culture within a firm.
The first task is to make sure you have all the procedures in place for a clear line of communication and a consistent messaging structure.
There is often a lengthy period of limbo between the announcement that a business is being sold, and the deal being sealed, but the right attitude, strategic approach, communication and management structures will prove vital when managing developments.
Many senior leadership teams can benefit from targeted training for example, enabling them to plan for change and embed positive behaviour throughout their organisation.
So whether you own a firm that is currently going through a merger or acquisition, or are an employee at a company that is experiencing a significant transformation, there will always be resistance to overcome.
But understanding more about your own responses to change and learning more about what you can do to enhance the company might be the first positive change you need to make.
Mike Le Put is the owner and founder of MLP Training