Mergers, acquisitions, SMEs and marriage

The subject of mergers and acquisitions has come up in a number of conversations with clients and colleagues over recent months. A ‘typical’ conversation will not focus on the reasons for the merger or acquisition (the plan or strategy) but on the implementation and integration aspects (the execution of strategy) following the decision. In other words, a conversation about the challenges being faced and consideration of the options, decisions and actions required to address these.

Such conversations bring to mind the old adage ‘strategy is easy – execution of strategy is difficult’.

An article ‘Why do so many mergers fails?’ in Business Matters at the back-end of 2013 serves as a useful reminder of some of the reasons why mergers and acquisitions fail – or put another way, why they fail to deliver/achieve the expected benefits/value identified in strategy/business case. In the article, and according to research by KPMG, “90% of mergers and acquisitions fail, compared with around 40% – 50% of marriages.”

From a knowledge management perspective, some of the reasons for the failure of mergers and acquisitions can be clustered around the concept of learning (or not learning) before doing e.g. poor due diligence; or not reflecting (and then applying if relevant) on lessons from past mergers/acquisitions from within or external to the organisation; or forgetting that mergers and acquisitions are change management activities.

The reasons for ‘failure’ can be many and commentators, consultants and advisors will each have their check lists or versions of their ‘top 10’. Understandably, it is the success or failure surrounding large-scale mergers and acquisitions that gain most coverage (in the media etc.), but whilst the size, context and complexity of mergers and acquisitions will vary, they all have one thing in common – people. By ‘people’ I mean those impacted by the change and those managing the change – and with people comes knowledge e.g. existing know-how (which is likely to be one of the reasons for the merger or acquisition in the first place).

In an era when mergers and acquisitions has become a popular growth strategy for SMEs, how can they (who unlike their larger counterparts may not have any merger or acquisition experience from which to learn) avoid the ‘challenges being faced’ conversations mentioned earlier?

Well one way is to ask and answer robust ‘learning before doing’ questions, and to do so when a potential merger or acquisition is more of an idea than a reality. Questions might include:

  • What critical ‘business’ knowledge do we need to consider and plan for a merger/acquisition?
  • What critical ‘commercial’ knowledge do we need to execute the deal?
  • What critical ‘management’ knowledge do we need successfully implement the decision?
  • What critical’ performance’ knowledge do we need to ensure that anticipated value and benefits are assessed and realised?

I’ll leave to you to comment on what ‘learning before doing’ questions you think should be asked and answered before getting married!

The hippos ate all of the tomatoes

In the TED Talks video Want to help someone? Shut up and listen! Ernesto Sirolli, a sustainable development expert, reminds us of the importance of listening.

In his talk he tells a number of stories about how and where development aid is applied and how his approach changed when he realised that “every single project we set up in Africa failed”.

In business meetings, project activity, workshops and in the daily ‘cut and thrust’ of organisational life it is all too easy to jump to action without first understanding (through listening and non-verbal communication) the full nature of the problem/opportunity presented and the extent to which the ‘staff in need’ really want to be helped (try using The 5 Whys).

Knowledge Managers can assist here by working to ensure that ‘learning before doing’ is embedded in every-day organisational activity. They can also take from the video some key messages to help them in their role, namely:

  • Listen to the business
  • Seek out ideas and act on them
  • Identify and support the organisation’s entrepreneurs
  • Harness the imagination of staff
  • Don’t impose solutions.

Don’t drop the knowledge baton – completing a successful handover

Completing a successful handover – i.e. transferring knowledge from someone leaving a role to a new starter – is a little like baton passing in an athletics relay race.

Let me explain. With only a minor stretch of the imagination, it is easy to think of the knowledge to be transferred as the baton; the space/markings on the track as being the time allowed to complete the transfer; the fact that business does not stop moving whilst handovers take place; and the fact that an organisation does not want to drop the handover baton.

In the case of an athletics relay race dropping the baton means disqualification; a feeling of letting the team down for the pair involved; and (in the case of the Olympics) the despair of a number of years ‘wasted’ as the hope of winning a medal vanishes in an instant. In the context of an organisation, dropping the baton could mean the loss of business critical knowledge; issues with business continuity; or a wheel getting re-invented.

Knowledge Managers can extend or change ‘the relay race story’ to suit (and promote the importance of) the handover requirements in their own organisations. That said, unlike the athletes in the relay race, staff leaving and joining organisations don’t get a lot, if any time to practice and hone their handover skills.

To address this, Knowledge Managers (playing the role of a relay team’s coach) should ensure that due consideration is given by those concerned to:

  • The people involved and the context
  • The type of knowledge to be transferred
  • The timeline/plan to complete the transfer
  • The learning/improvement gained .

Want to connect with some new knowledge? Try turning left instead of right

As a Knowledge Management and MBTI Consultant I have had the pleasure of working with many different organisations and have visited many offices/work locations – of all shapes and sizes – and have also had the opportunity to visit different parts (floors, functions, meeting rooms, canteens, store rooms etc.) of many of these offices/work locations.

A common reaction I have observed when I’ve been working (and walking) in an organisations building is that members of staff will often look up from their desks and computer screens (or peer out from their offices if they have one) to check out a face they do not recognise. Perfectly understandable, I hear you cry; but what if the face they do not recognise is not that of an external consultant, but of another member of staff?

Well for a start their reaction is the same, and perhaps in part explained by the scale (just too many faces to recognise) of the organisation concerned. But it might also be down to the fact that, as creatures of habit, many members of staff will enter their organisations building and follow the most direct route to their desk. They are likely never to vary the route, nor so the pattern of using the same/nearest toilet facilities during the day, or walking to the canteen or coffee machine along familiar/well-trodden paths.

Why should this matter? Well because (and particularly in the case of knowledge workers) the outcome of this habit is that an employee is likely only to see the same faces, week in week out; and the chances of bumping into a colleague that has a new idea, something to share, or an example of know how to, is reduced significantly.

So whilst connecting with others can be done behind a desk and via, for example, a good expertise finder, the power and fun of unexpected discoveries (serendipity) should not be underestimated.

So then next time you are about to take your normal route to your desk, or your normal route to a meeting room, why not ‘turn left instead of the usual right’ (or go up or down a floor)? You may find a colleague with some knowledge to share!

Two actions Knowledge Managers can take from an old family recipe

After tucking into a fantastic lamb dish beautifully prepared for us by friends for a Sunday lunch, we naturally asked for the recipe.  “Oh it’s really very simple and a real favourite of ours” came the reply; “in fact we got it from our local butcher and he said that it was an old family recipe”.  Old family recipe or not, we left our friends later that afternoon knowing that we would try the recipe out at home at the earliest opportunity.

When the day arrived we carefully followed the recipe, to the letter, making sure we weighed each of the ingredients, and double checking each action (slice; chop; mix; stir; season; temperature up/down; leave to rest etc.) to avoid any mistakes.  Whilst thinking of ourselves as ‘good cooks’ the recipe seemed far from “it’s really very simple” billing by our friends.  None the less, we were pleased with our effort and sat down at the dining table ready to enjoy the lamb dish and to re-live the sensation of that first, memorable mouthful.

You can probably guess what happened next.  The lamb dish did taste pretty good (after all we are ‘good cooks’) – but nowhere near as good as when cooked for us by our friends.  Why?  Well I think there are several reasons:

  • We were cooking this lamb dish for the first time; whereas our friends had cooked it on many occasions
  • We followed the recipe (data and information) very carefully and to the letter; whereas our friends admitted to adjusting (knowledge) the ingredients to suit the “look and feel” of the lamb
  • We selected some of our favourite vegetables to eat with the meal; whereas our friends selected the vegetables they thought best accompanied and complimented the dish.

Knowledge Managers reading this blog post will be able to relate my ‘lamb dish recipe’ story to situations faced by employees in their organisations on a daily/weekly basis. For example:

  • Where can employees, who are about to undertake a task for the first time, quickly and efficiently find out who in the organisation has experience about the task (knowledge gained through cooking a dish on many occasions) and how to connect with them so that this knowledge can be shared/transferred?
  • When should a piece of good practice/know how (a recipe) be followed to the letter and when is it ok to adjust or adapt this advice given a slightly different context (the look and feel of the lamb)?
  • How to ensure that all of the ‘ingredients’ of knowledge management are in place and aligned so that the task can be completed/action taken (thought best accompanied and complimented the dish)?

Another point we can take from the story concerns learning, in part gained through feedback and practice.  Unlike the cook who has just prepared and served the lamb dish, Knowledge Managers are often remote from the ‘users’ experiences’ (instant feedback) of the tools, techniques and methods put in place to help support the flow of knowledge in their organisations.  Further, the (time/resource) pressures in an organisational context do not often encourage or allow time for reflection and experimentation (practice).

So what if any actions can a Knowledge Manager take from my lamb dish recipe story?

  • Action Number 1 – get as close to your ‘users’ as possible and actively seek their feedback – and act on it
  • Action Number 2 – identify areas of your organisation where practice (e.g. for repeatable processes) will make perfect…

…and don’t underestimate the power of a good story!

Not just another Knowledge Management quote

A good way of illustrating a point; setting the scene for a presentation; providing the context for the change you wish to introduce; starting or ending a speech; preparing to influence; or making your ‘good practice’ document come alive, is through the use of quotes.

We all have our favourites – some anonymous and others by famous characters from the past or from thought leaders of the present.

Deciding which quote to use, and when and how to use it, can be the difference between it being heard as just that, ‘another quote’ (a bit like another bullet point in an already over-bullet pointed PowerPoint presentation), or being heard as a memorable illustration of the subject in hand and as a call to action.

Knowledge Management, in common with other management disciplines, has long used quotes; some created for a specific purpose e.g. “if HP knew what HP knows we would be three times more profitable” (Lew Platt, former CEO of Hewlett Packard), and others (already in existence) associated with the point being made e.g. in the book Working Knowledge (how organisations manage what they know, by Davenport and Prusak) each chapter is introduced by a relevant quote.

There are many resources that Knowledge Managers can use to research quotes including: Thoughts and quotes on knowledge by Forbes.com and Gurteen knowledge quotations.  Alternatively, you can create your own!

Sharing tacit knowledge – conversations matter

It’s very easy for organisations to focus their attention on managing explicit knowledge e.g. documents, manuals, procedures etc. because this type of knowledge (information) is visible, can be counted, and is growing fast.  But as Knowledge Managers know, explicit knowledge is just the tip of the knowledge management iceberg, and that the bulk of an organisation’s knowledge is tacit and lies hidden below the water line.

In the following video clip, Nancy Dixon tells the story of sharing tacit knowledge at Xerox and reminds us of some key points including:

  • Documents, manuals and training can only be so good
  • Work/problem solving related tacit knowledge is often shared in the ‘un-managed’ parts of an organisation e.g. over lunch.

A chain is as strong as its weakest link

Anyone who can recall the general knowledge TV quiz game show The Weakest Link will be familiar with the line “you are the weakest link – goodbye”.  In essence the quiz centred on the ability of the contestants to correctly answer a number (a chain) of questions, and where an incorrect answer resulted in a break of the chain and the loss of the money accumulated up to that point.

The proverb ‘a chain is as strong as its weakest link’ and the story about the game show are examples that can be used by knowledge managers to help their organisations think about the importance of knowledge flow, and take action to identify and then strengthen ‘weak knowledge links’.

‘Weak knowledge links’ to watch out for include:

  • Poor handover practice between steps/stages of a process or project
  • A key ‘go to person’ moving to another organisation
  • A subject matter expert about to retire
  • A lesson documented, but not applied
  • Not learning before, whilst, and after doing
  • Working practices that do not encourage and support knowledge sharing.

In the game show contestants vote for who they think is the weakest link (or as the game comes to a conclusion, the biggest threat) and the person identified leaves the game.  In the context of knowledge flow in an organisation, the existence of a weak knowledge link could result in duplication of effort, repeating mistakes, or the failure to use what the organisation already knows – or perhaps worst of all, the risk of saying “goodbye” to business critical knowledge.

Desert Island Discs for a Knowledge Manager

Desert IslandThe format of Desert Island Discs has changed little since it was first broadcast in 1942.  Each week a guest is asked to select 8 pieces of music, a book and a luxury item, to take with them on their desert island.  The programme is currently presented by Kirsty Young.  Toward the end of each programme she asks her guest which disc (if they could only have one) they would save (from the waves).

So, a great programme and a great format – but what if (one day) the guest in question was a Knowledge Manager?  What discs do you think he/she would take to remind him/her of their role; their organisation, and their knowledge management successes and lessons learnt?  Well, here is a starter for ten (or should I say eight).

  1. ‘Knowing me, knowing you’ – by Abba; as a reminder of the importance of connecting people to create, share and transfer knowledge
  2. ‘I did it my way’ – a song popularised by Frank Sinatra; as a reminder that ‘not invented here syndrome’ is very real for some people and that their preferred way of working can be to reinvent wheels (because it’s more fun and interesting than using someone else’s)
  3. ‘Beethoven’s Symphony No 5 in C Minor’ – with its famous 4 note opening; as a reminder of the complex patterns of activity (e.g. of social networking) and repetition (e.g. of good practice and repeatable processes) important to a learning organisational
  4. ‘My Generation’ – by The Who; as a reminder that each new generation (e.g. generation X, Y and Z) of employees brings with it new challenges and opportunities for knowledge management
  5. ‘With a little help from my friends’ – by The Beatles; as a reminder of the importance of ‘learning before doing’ and that it’s ok (and not a sign of weakness) to ask peers for help
  6. ‘The Hokey Cokey’ – a ‘we’re all in this together’ participation dance; as a reminder of communities (I guess in this case one of ‘interest’) and their importance as custodians of organisational knowledge
  7. ‘Nessun Dorma’ – an aria from the opera Turandot (check out Pavarotti for a quick reminder/sign-along); and as a reminder that ‘none shall sleep’ in the 24/7, ever-changing and ever more complex business environment in which knowledge workers work
  8. ‘Always look on the bright side of life’ – by Monty Python; as a reminder that knowledge management is a change management activity and that it is important for knowledge managers to remain positive and proactive when things don’t go according to plan

No doubt readers to this blog will have better/alternative discs to those suggested above – and I’ll leave it to others to decide what book and luxury item the knowledge manager might take on their desert island.

Stop reading, start watching – using video for knowledge capture, sharing and transfer

Knowledge capture, sharing and transfer are core aspects of knowledge management activities and, as many knowledge managers know, different approaches are required for different situations and for different types of knowledge.

The use of video to help capture, share and transfer knowledge (particularly tacit knowledge) is not a new idea.  That said it is an idea that is being innovatively used by JoVE (Journal of Visualized Experiments) to produce a peer-reviewed scientific video journal.

Knowledge managers may wish to take a quick look at Jove’s web site to get a flavour (you can see the first 20 seconds of some videos without the need to subscribe) of their approach and for further ideas (try their blog) about how to capture, share and transfer knowledge (in this case the reproducibility of scientific experiments) that is difficult, if not impossible, to write down.

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