Disrupting And Rethinking The Stagnant Approaches To Deal Management

Intro

Agile Gorilla, a boutique advisory firm founded by David and Ben in 2017 enables industry practitioners to conduct more successful, sustainable, and equitable mergers and acquisitions. David Boyd and Ben de Haldevang has a background in managing, executing, and advising on complex M&A deals throughout the entire life cycle for decades.

Can you tell me a bit about your background and how you came to create Agile Gorilla? 

Ben de Haldevang: I spent 10 years or so in the executive search world, and it was very obvious to me that these deals were destroying value. When I talked to people about why they were leaving, their answers were almost always not related to retention versus, and organizational design, but a lot around culture, ways of working and behavioral issues within the business that drove them to make that decision.

That's where my initial idea around building an M&A practice came from. There is a strong focus on the human capital side of things and a strong focus on the program management side of it. Agile Gorilla, for me, is an attempt to disrupt and to think about M&A differently, to think about some of those core unwritten rules that people have made about doing deals. 

David Boyd: I fell into mergers and acquisitions, similar to Ben in starting as an engineer. Ben and I came together at a consulting firm, worked together for about four years and we both had that kind of view as to the way things were being done wasn't adding value for clients. It was a kind of process built on fear and when we got back together again,  a couple of years ago, we thought now is the right time to have a new approach.

I'd love to start by asking you about the significance of gorilla in the name. What made you choose this reference? How does it connect to the industry?

Ben de Haldevang: I think for me specifically, the gorilla part of the name refers to the sort of innate, irrational human in us all, that tends to drive a lot of the behavior in the world of M&A. It takes us back to a more fundamental part of the way that we behave and how that influences the way we go about M&A.

David Boyd: Agile was one of the ways of describing to people how we approach things differently rather than go for plan strategies. We were using emergent learning strategies.

A lot of the things that you now associate with agile project management, agile software development, are things that we found ourselves doing with clients on the M&A side. It helped us give a language to how we were approaching the delivery of the deal differently.

Can you tell me, how are you rethinking M&A?

David Boyd:  We'd ask ourselves why aren't companies giving these amazing projects and roles to the people in their organization instead of getting consultants to come in?  If you're going to design a  strategy for promoting, training, and developing your internal talent, you couldn't get anything better than integration post-M&A.

It's very hard for consultants to come in and understand your marketing strategy, understand your clients, understand your pricing, and help them in a meaningful way in a short period. So, because you're using consultants, you end up focusing on the cost side. 

In terms of who you're working with, consultants tend to work with the acquirer, which means that the target management is excluded from a lot of that decision making and those networks.

It is target management and the people in the organization who understand the clients, understand that growth strategy and why not use them for the integration and get them to help understand how they can best fit in with the Inquirer.

The way you deliver value through integration is always through opportunity. It's through the combination of each of the siloed functions, working together to generate more revenue, to generate profit, to reduce costs.

When you mentioned alternatively organizing your integration by opportunity, could you tell me a little bit more about that? How does that come into play?

Ben de Haldevang: The growth opportunities sit between functions, not actually in functions. Most functions do their job well, but, when you start to look at growth opportunities, they sit between those functions. Putting product owners together with client owners is still quite a novel concept.

And when we started doing that in this environment, what we started to find was a much stronger feed between clients who had identified particular opportunities and product managers who hadn't necessarily heard those before, but we're now starting to hear them. 

It started to look at some of the commercials behind the development of products,  the concept of partnering across clients, and developing things with the clients along that journey, and not in isolation.

And so not only was that a much more efficient way of operating internally, people started doing things much more quickly and, but they also started producing things that clients identified as their wants previously. 

So then that group would be pretty diversified in terms of the different people involved in it. 

Ben de Haldevang: Absolutely. It's through that different language and a different set of KPIs that they've worked to and the different sense of what's important there, how quickly we can operate - it's through those conversations that you start to find incredible opportunities.

It's interesting because you always hear about these cross-functional challenges or gaps that happen. It seems like this would make more sense in terms of alignment between people, and between teams. 

Ben de Haldevang: Absolutely. You don't have to go through a prioritization exercise anymore. You don't need someone more senior in the organization necessarily to jump in and say, we're going to do this first and this next because it becomes unbelievably obvious what the right thing to do is, and in what timeframe.

Would that help decentralize decision-making? 

Ben de Haldevang: Completely. In general, internal integration, which is that collaboration across functions tends to suffer when you go through an M&A process because people are not so sure anymore as to whether the network is still as strong as it was, and whether they can still deliver the same thing.

If that's a really important dynamic for your business, when you're going through an M&A process, you need to support it because it's, by its nature, going to be a struggle as you bring new people into the process.

Let's step back and look at the evolution of M&A over the last 20 years. What have you seen that's changed?

David Boyd: Data rooms are one of the great innovations. Other than that, the problem with M&A is it is a sector that hasn't been disrupted that hasn't changed. There are some exceptions to that. One is 20 years ago IT wasn't on the radar. 10 years ago, IT started to be part of due diligence and thinking, whereas now I'd say in every deal, people are looking at the technology as a core question and not just doing due diligence on it, but thinking about the value that's been created around the technology area.

Also, 20 years ago, the focus on the deal side and the thinking was very much on tangible assets and thinking about people as commodities whereas now, particularly as private equity has moved into business services, there are more people-focused businesses. People are starting to adapt to intangible assets and how they think about the impact of a deal on people and retaining them and motivating them to go forward.

What are the fallbacks of playbooks and what should deal teams follow in their absence? 

Ben de Haldevang: The value in a playbook is in the development of the playbook, it's not in the playbook itself. The process that you go through in building what might look like a best practice from all the previous deal experiences is very intuitive, highly interactive It is a very powerful and useful exercise to do, and it's a safe place for people to have proper post-mortem about what went wrong and what went right.

The dynamics of businesses, the dynamics of the client base, the dynamics of the pull-up mix, and the dynamics of the operational platform are all quite different. To expect a playbook to work in a different environment almost removes the thinking part of the brain enacting some sort of automatic process to work.

David Boyd: I helped create a playbook for the digital media and advertising sector. Looking back on it, it was that team we developed, those 30 people that really understood how we were going to go to market what the customer wanted, how we were going to deliver it. It was the team that was immensely valuable, not the document afterward that we had. 

You mentioned the development of the actual plan being iterative. Can you tell me a little bit more in terms of what that means and how that breaks away from their traditional approach of doing it?

Ben de Haldevang: It’s very hard for people who have worked in a functional environment for a long time to describe in an objective or rational way what it is they do on a day-to-day basis. So, when you are starting to investigate opportunities for people to work together it is equally iterative because it's not a process that you've thought about in the past.

That leads to this very fast-moving, small change-driven set of activities where you are testing how things work, try again through trial and error to move that forward. It is exciting because you get people very comfortable with rejecting things that are not going to work in a very quick space of time.

The decision-making process speeds up and people get comfortable with the concept of not solving everything to a hundred percent but solving things to a percentage that feels right for each individual. You are just moving forward and creating that momentum through the process. 

David Boyd: My visual background was in manufacturing on the steel side. What has always stuck with me through my career is developing systems that deal with complexity and uncertainty that are intuitive, that are emergent, that you can plan, and you can come up with a strategy at the start, but you really need to think about it as you go along.

And that is how we approach integration. This is what we found to work because in pre-deal environments, you've got limited time, very limited information accessible to people, and coming up with plans and you need them to accept that. That ability and that willingness to learn and evolve as you go through the integration is the core factor for success for me.

Tell me how you learned about agile and why you thought it would be valuable to M&A?

David Boyd: I had small clients who had a failing software development program. They were migrating software over and it wasn't working. They were trying to outsource and we built a team in London next to the people who are using the platform, so they understand the customer requirements. A team of six people based in London turned around the program and, and developed the new platform.

It was through that process that I saw that everything they were doing from organizing the team to learning along, was right at the heart of exactly what I've been doing for the previous 20 years on the deal side, which got me into looking at the principles of agile software development to agile manifesto.

This is exactly at the heart of what you're doing with M&a integration, which is getting people to change. The systems and processes change, but they're changed by people and it's about changing people's behaviors post-deal as you deliver the value. 

You both have a history of working on various large, complex deal processes with an emphasis on post-close and integration. How have you introduced agile to your approach to these complicated processes? 

Ben de Haldevang: The way that I've done it in the past, was to give people what seemed like an impossible task. I've sat the two groups together and said, you got a timeframe, which is wholly ridiculous in the context of the timeframe that you've had in the past to develop something together, and I want to see how that works and how that goes forward.

Once they get past the shock of what perhaps might have taken a year in the past is now going to take a hundred days, it's very interesting how that almost naturally leads to a much more iterative, effective, and agile approach to building something.

When you're looking at applying agile for new product development versus an actual integration of a function, it doesn’t seem like there are big distinguishing differences between the two.

Ben de Haldevang:  I don't think there are enormous differences. It’s important to sit down and talk about how we can create the right environment and start to do things together in a really fast way that people perhaps won't be expecting. That sort of sets the tone of the integration process going forward.

Let’s shift a little bit and get more specific in terms of how you're using agile to improve your client's deal workflow. 

David Boyd: The tools we are using are extremely simple. We always go with the most basic, simple lists, simple approaches to doing everything. We're dealing with a wide number of people that we want everybody who's in the team across all the different functions, to be able to work with us in the same way, collaborate with us, and access everything we're doing. Using those simple tools allows us all to work as a team, collaboratively. 

In the process, we are using language that everybody can understand and be on the same page. This is very comparable to different techniques in terms of how we organize team meetings, be it scrum short meetings, timeboxing, or something else, to bring people together. There's a lot of similarity about how we take ownership, as well. 

Are you doing a similar standup type of approach for daily meetings? Does this get modified in terms of application for M&A, or is it the same?

David Boyd: It depends on the client's situation. So often we work on projects where the team is dispersed across a few different locations, and all those time zones all need to work together. In these cases, you have to find alternative ways of structuring the team.

Alternatively, you could have everyone on the same site, where contractors are coming in from different towns a few days a week.  I'd say in the M&A space, it's more of a weekly drumbeat than a day drum beat, but that does vary through the stages. Through the final stages of the deal, you are talking to everyone daily, getting everyone together, and making sure everyone's in sync.

That typically follows through for the first week or two post-deal. But when you start to work on the real longer-term projects, you then hive off and you're catching up monthly. 

I know earlier you mentioned postmortems, which I would associate with doing retrospectives. Are there other techniques that you're leveraging as well? 

Ben de Haldevang: I like the idea of pre-mortems that we do because it takes some of the fear out of the process. It helps people deal with things that they don't certainly want to deal with, or haven't dealt with in the past.

Once you uncork that you get a much stronger approach towards mitigation and also towards early identification of an issue. It also helps sort the inherent, false optimism that people have about success that they're going to have in their projects. It is important to challenge their sense of what's possible in the context of the deal and that forces a degree of prioritization around the exercise.

David Boyd: One thing I've learned from Ben is this concept of psychological safety. Every time you get the team together, every time you're willing, to be honest, and say what you're thinking creates a sense of safety. Being able to do that on a regular weekly basis and creating a team that is willing to be that open and honest with each other means that there is no need to have such a lengthy post mortem process at the end because you're doing it as you go through.

Can you talk about the cultural journey teams and organizations need to take to adapt more efficient technologies and project management methodologies?

David Boyd:  Often, the challenge is getting the management team to realize that their behaviors, through the status and authentic communication are impacting the organization. The challenge is getting them to understand that behavioral changes can be an amazing tool for changing the organization. Otherwise, they can take the organization in the wrong direction for quite a long period.

When I work with a client I need to take my values, my belief in the agile, emergent learning, and self-organizing teams and try to demonstrate those through my behavior, and then encourage everyone else to behave the same way and then try and reinforce it from there.

Ben de Haldevang:  The leadership often thinks that cultural alignment is people getting on with each other and it's much more challenging. What frequently happens is that leaders from two businesses come together and they seem to get on, but when they start to work together at a much granular level, they discover that there are fundamental differences between the way they operate. It destroys some of the trust in the leadership.

The second thing around culture is that it seems to stop at the end of the cultural assessment process, which is completely nuts. If you can talk about each other's businesses and the way that you operate and the way you work in an open, coherent way and a non-pejorative way, then that's a really powerful thing.

This starts to create some language across the two different businesses, but you need to use what you've learned as a way of trying to understand how things need to go, what might need to change, or what can be agreed on. The integration team to me is the spearhead of that change. 

Can you tell me more about your people-focused approach and how it's making M&A  more successful and equitable?

Ben de Haldevang: My approach to people is to give them as much space as possible. The ability to understand and communicate is critical to prevent those silo-based activities. The second thing is the way you structure your teams, the way you communicate with your teams and expect them to deliver stuff is down to your personality.

I expect the team to deliver things in certain time frames, in a smart, intelligent, and empathetic way, and I would expect the same thing to happen further down the business. I am incredibly open about my failings and weaknesses in terms of activities and things that I just have no understanding of, and I think that feeds to an openness and a willingness to admit those or deal with those on a team level. 

How do you approach evaluating the capacity capabilities and even compatibilities of the combined teams pre-deal?

Ben de Haldevang: You need to do research, not just for yourself, but you're doing it for the client. This way you're starting to evaluate what a stakeholder might perceive as being relevant to not relevant. In terms of capacity, busy people are always busy, and when that's not the case delegation is not happening as much as it needs to happen.

In terms of capability, every leader I spoke to talked about the importance of loyalty and trust. I think you can teach people pretty much anything. I'm much more willing to invest in people if they're starting up on an M&A and help them build up their character, rather than bringing in people with the capability, but perhaps not with the right approach and the right attitude.

When you go through this and you start thinking about cost synergies and revenue synergies, how do you determine where you're going to put your emphasis on?

Ben de Haldevang: It's deal by deal based.  Our thesis is that starting with cost creates a cultural barrier to revenue, which is very difficult to get over. Our instinct is to see if we can create something, see what options are there for operational improvement, products and services, and new ways of doing things that will add from a revenue perspective on the basis that we can come back to a target at any stage in the process and we can still achieve that target. 

David Boyd: It's about being customer-centric. Sometimes that means that the new products, new people that would benefit from working with you. Sometimes that means that you can provide a much better service at lower costs to your existing customers. If you strip out the cost without understanding where you're going as a company in the longer term of what the opportunities are, how on earth do you know what the right costs are to cut or what are the things you do or don’t need?

What is the future of M&A project management and how does agile fit in?

David Boyd: I suppose it's about not having an end state. Project management is so much getting from point A to point B. When you approach M&A in that way, you're designing an end state for the organization in terms of systems and processes and people. However, the reality of M&A is such that you never achieve that end state. If you try and get there, the environment will evolve so quickly that the end state's no longer where you want to be.

So instead, what you do is you take where you are as an organization and think about where do you want to move to? This is neither where the target is nor the acquirer is, but it's somewhere new and you may never get there and as you get through the project and process.  Ideally, with an Agile, you will be delivering value as you go, then start adapting and changing your goalposts. 

Ben de Haldevang: Companies will need to continue to transform for the rest of their existence. So the ability to learn how to learn that skill set is a fundamental thing for a business to be successful. The more it's incorporated into the DNA and the culture of the business, the better the business will be.

Are there any closing thoughts around implementing Agile in an M&A context and what the real driving benefits will be for the company's vault?

David Boyd: So many companies take for granted knowledge about what the customer wants. I love a project when we're doing research, talking to the customers and the customers are talking to us and telling us what they perceive as the opportunities for the business and the brand, or how we can add value to them.

Ben de Haldevang: The concept of smashing organizational structures, which are becoming barriers to processes is by creating cross-functional, highly rooted, very fast decision-making capability that exists within the business. That forces decentralization across the organization.

When you are bringing that skillset, capability, that learning experience, is when you start to infect the organization with an Agile set of values around how we as a business are going to work going forward. That's where the ultimate opportunity lies.

What is the craziest thing that you've seen in M&A? 

Ben de Haldevang: I've seen a situation where everyone with a C in their job title in a medium-size organization spent three hours discussing the number of car parking spaces that were required in the new head office building.

David Boyd: An organization that bought a business that wasn't doing what they were doing at the core, and they forecast revenue synergies, they were so certain about this, that they forecasted where they are going to be five years later. 

Ben de Haldevang: One company required 100% approval from all the partners that the deal was going to go ahead. That's an extraordinary thing. What was interesting is the way that that changed the dynamic of the deal. People who proposed the deal had almost had to segment their partner groups into different groups as to what their motivations were, how to engage in those people, and how to think about the implementation of that process.

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