FIVE FROGS ON A LOG

By Prateek Shrivastava

MARK L. FELDMAN &

MICHAEL F. SPRATT

The author MARK L. FELDMAN, PH. D., is a partner and managing director of PricewaterhouseCoopers’ global mergers and acquisitions consulting business – The Accelerated Transition. He provides advisory services in accelerating the capture of sustained economic values from mergers, acquisitions and joint ventures.

The other author MICHAEL F. SPRATT, PH. D., is also a partner and managing director in PricewaterhouseCoopers’ global mergers and acquisitions consulting business. He provides strategic, advisory services, specializing in companies undergoing dramatic change. He is a popular speaker on change and transition.

About the authors’…..

Five frogs are sitting on a log.Four decided to jump off. How many are left ?

Ans : Five

WHY ?

Because……… deciding and doing are not the same thing.

Mergers, Acquisitions and Large-Scale Change

These are the three big words upon which the whole book is based.

Describes the problems faced by CEOs’ of different companies when they undergo merging, acquisition or any swift transition.

This book is a guideline to the CEOs’ for accelerating the transitions in business.

The main emphasis is given on removing the deadly sins in implementing transitions in Mergers, Acquisitions and gut wrenching change. The seven deadly sins are –

1. Obsessive List Making2. Content-Free Communications3. Creating a Planning Circus4. Barnyard Behavior5. Preaching Vision and Values6. Putting Turtles on Fence Posts7. Rewarding the Wrong Behaviors

The first chapter titled “OPPORTUNITY LOST”, shows the merging of two companies to fulfill a long list of desired objectives. The companies being the Global Computers and the Nexus technology. The dealmakers have specified a long list of objectives which are to be achieved with the dealing. But months after the deal a lot of problems arose. E.g. culture, grouping, communication gap, priority declaration etc.

All this problems led to instability of the deal and the CEO has to face a lot of problems regarding the employees’ efficiency, work and priority distribution, customer satisfaction, financial crisis and the major being deviation from the objectives.

The second chapter titled “The Ugly Truth” shows the statistical figures of how many merging or acquisitions are successful.It clarifies the major defect because of why most of the deals

failed.It shows the nature of most of the CEOs’ as under the

influence of rapid growth, they keep on acquiring companies over companies and thus putting the money in stack.

It clarifies that the thinking and planning before the deal has to be implemented, must be futuristic.

The CEO of the dealmaker must have to think what opportunities can be utilized so as to ensure the success of the merging or acquisition.In all it specifies that – “Deciding Is Easy, Executing Is Hard”

The third chapter titled “MORE UGLY TRUTH” shows more light on the problematic issue.Competition being one of the main reasons for merging. It

treats the merging or acquisition as a kiss (managerial) from a beautiful princess (M&A)* which can bring some miracle for the business. But the miracle-kiss like thing doesn't work every time.

Sometimes they advertise the deal in such a way that the post deal period, if suffers delay causes a lot of restlessness among partners, workers and customers. And thus disturbs the business activity.

It also gives much stress on the speed of the transition. Change is expensive and delay can be dangerous. A prolonged transition adds cost, slows growth, destroys profit and decreases cash flow

As the further delay in the execution of the deal occurs, there arise a lot of problems for the business and the organization. Some of them are –I. Market share shrinksII. Productivity declinesIII. Quitting of the bestIV. Stakeholders defections

And last but not the least, the deal is always represented as “MERGER OF EQUALS”. But always it is impossible to select the best practices from each side. It may give rise to a debate asking which merging firm has better practices. This competition retards integration, builds hatred, encourage disappointment, drives down opportunity and slows the capture of new business opportunities.

The fourth chapter of the book entitled “THE LAW OF THE BAND-AID”. Through this chapter the author wanted to Eliminate the pain of transition.

The transitions should be adapted very fast and swiftly and skillfully so that the pain of the transition or the drawbacks of it can be overcome easily. The faster the transition completes, the faster you realizes returns on the investment. It reduces pain and uncertainty of change.

The human resources or man power also opposes delayed transitions as delayed work creates restlessness, uncertainty and change becomes difficult to be adapted. Swift transitions have less affect and better results.

The fifth chapter entitled “260 PRIORITIES ( Economic Value Creation)” shows that every work to be done should be in a strategic manner. The management team should learn to work together as they have to make a strategy to work for a common goal and community welfare. They must have decide their priorities which should be interrelated among themselves.

The main goal of the chapter is to remove a deadly sin titled “OBSESSIVE LIST MAKING”. Many companies make excessive priority list or something else as its future strategy but mainly it lacks concentration, proper utilization of resources and readiness of solving problems and tackling adverse conditions.

The main theme of the chapter can be easily understood by a short story given below –

Once adviser of a s/w company asks the CEO about the future planning and priority of the company. Then CEO describes about their 260 priorities written in a 13 page book. When analysis was made on the priorities then it was found that the priority setting was done individually by the department heads and not by taking the whole company as one. The different priorities have no interrelationship among themselves as each department head when called and asked to give his top 5 priority, then each gave different one.

The few things which should be kept in mind before making priorities are –

1. Concentration of Resources To make a common strategy.

2. Plotting a Course It’s not about strategy. It’s about execution of

strategy.

The main idea behind these works are to save the time, money and efforts of the people in doing low priority work rather they can achieve other heights if utilize their resources in a correct fashion. So that the transitional change must be fast, accurate and beneficial to the organization.

The sixth chapter entitled “WINDSHIELD WATCHING IN SEATTLE (Early Communication & Stability)” led emphasis on a fact that there should be no confusion among the people so that whatever is done or planned should not create restlessness among themselves.

This chapter tries to remove the second defect or deadly sin of M&A termed as CONTENT FREE COMMUNICATION. This chapter explains how meaningless communication wastes the time as well as resources of any organization. Also content free thinking and improper communication affects the organization up to a great extent.

Some of the reasons for these problems are -• Confusion• Critics and Molehill man• Content Free Thinking• Content Free Communication• Wild Speculation e.g. Windshield watching at Seattle.

The solutions for these problems are –1. No Secrets2. No Surprises3. No Empty Promises

CONCLUSION

The book is a complete guideline for CEOs to accelerate the transition in Mergers, Acquisitions and business strategies.

The field guide allow us to get familiar with the problems faced by the CEOs when they are trying to cope up with the pace of the acquisition or merger. It also gives solutions for various problems and guidelines to overcome them.

THANK YOU