51: How Founder-Led Companies Navigate Acquisitions Without Losing Top Talent

Speaker A: Foreign.

Speaker B: Are you serious about planning a successful business exit? From angel to Exit is your go to resource. Subscribe to our newsletter@ekfalt.com podcast for for even more valuable insights and to get personalized guidance, take our free Exit Readiness assessment. It's just 24 questions and it will give you a clear picture of your exit readiness. Find the assessment@ekfelt.com exit submit your results and we'll schedule a free follow up call to discuss your specific situation and the best way to maximize your valuation and ensure a successful transaction. Now back to the episode. Welcome everyone. This is from angel to Exit. I'm Bruce Eckfeld. I'm your host. Our guest today, Jennifer Fondervay. She is the M MNA Whisperer. She's also the founder of Day One. Ready. We're going to hear about her experience, her insights, the work that she's done in the M and A space. Lots of interesting conversation. I'm sure that's going to come up here and hopefully some good hints, tricks, insights for founders that are earlier in the process thinking about an exit at some point and some of the things they need to consider and maybe do before they actually start down that path. So with all that, Jennifer, welcome to the program.

Speaker A: Thank you for having me.

Speaker B: Yeah, it's a pleasure. Before we get into all the M and A stuff and talking about transactions, I would love to get a little personal background. Like, how did you get into this space? Is this something you knew in kindergarten you wanted to be an M and A expert, right? Like, where did this all start for you?

Speaker A: What's a nice girl like me doing an M, M and A, right? I asked myself that as well. Uh, well, particularly because my future hope is to be ambassador to France and my dad, who's French, still thinks it's possible. I'm just on a circuitous path to that we go, um, it really, it happened. Lived experience. I was a corporate marketing executive and went through three multi billion dollar merger and acquisition deals. And I've been on all sides of the deal table. Acquired, brought in as a change agent for an acquisition, and then also acquired by private equity, which is his own unique experience. And each of those, uh, built on the other. And having me think there has got to be a better way to do mergers or acquisitions where the value thesis, the value creation is actually achieved. And what I saw consistently in my own experience and then from the three years of research that I did was the underestimated aspect of the people part, the people component to a merger and acquisition and how it drives success, that numbers alone will not do that. So that's why I'm now an M and a whisperer.

Speaker B: I, uh, love it. And tell me about the research. What prompted it? How did that actually conduct and what were the learnings?

Speaker A: Well, first the research was just because I thought maybe I'm the only crazy person that thinks this could be done better. And I had, I would say I had enough similar experiences, despite being on different sides of the table through all three, that I thought there's some patterns here, uh, in terms of how people react to change, how you manage that uncertainty, the leaders who I thought did a better job than others. And so initially, frankly, the research was just to make sure. Maybe I just went. I was going crazy. Maybe I'm the only emotional wreck in each of these. And what came through in those CEO interviews in particular was they would say back to me, this stuff that you're talking about that you're asking me questions about, this is what dooms deals. This is the stuff that no one talks about.

Speaker B: Huh?

Speaker A: But yet we all know is underrepresented at the deal table as what's a critical component to deal success. And so that research was enlightening. And frankly, I would say. And sometimes I curse the CEO and sometimes I appreciate the comment that he made. He said, I think this is going to be a great book. Really important message out there, but no one's going to run to Barnes and Noble to buy your book. They're going to be too busy trying to figure out how to make the deal successful. You need to build a business around this. And so that happened. My book came out in 2019 and my initial thought was, I'm just gonna put the book out there. It was a survivor's handbook how to survive M and A called now what? Here's my first promo. But really I was thankful for the CEO's comment. Cause, uh, I got a variation of that comment that I had to build a consultancy around this to really help, particularly in the middle market where there's just not a lot of knowledge, particularly if they're not a serial entrepreneur around how to do this. Right. As it relates to the people.

Speaker B: Yeah, I guess. And why is that? I mean, uh, you know, if this is such a influential, ah, and decisive part of a successful transaction, I mean, why does this not come up more? Is this just because it's easier to look at numbers? It's hard to look at these things. Like, why is this not paid more attention to.

Speaker A: Well, my new observation. So you've probably seen the statistic. 70 to 90% of merger and acquisition deals fail, right? HBR McKinsey. I think 99% of CEOs and business owners think that 70 to 90% doesn't apply to them. It's the truth. I, uh, understand there's a lot of

Speaker B: distribution error or something like that. I can't remember how this works.

Speaker A: Yeah, well, because I get it. The energy that comes to a deal typically is focused on the transaction. What's the greatest value? You're focused on making sure you get the multiples that this is going to be the right kind of partnership. The people piece, the leadership piece. It's secondary if it's even that. Because there is an assumption. We've got smart people. We should be able to make this work. We've managed change before. We've managed transformation. I've got people who do this stuff. But if you've never done a merger or an acquisition, it is a different beast. It's a different bronco that you are riding. And so it's why I'm intentionally called an M and a whisperer, because I'm often engaged to just say, okay, so what should I expect? How do I need to be thinking about this as it relates to the people challenges in order to your point, raise awareness that this is your deal team should include beyond the lawyer, accountant, wealth manager and advisor should include a human capital advisor.

Speaker B: And so maybe we just dig into the definition or what are we actually talking about here? When we talk about people and we talk about culture, like, what are we actually referring to in terms of the business itself?

Speaker A: To me, it's leadership preparedness. Okay, that at the foundation, it is helping your executive leaders. And then your next level down, I'll call them, for the purposes of this discussion, your frontline leaders. Right? The ones who are in the trenches making the business successful. Because each group has slightly different needs, they have similar challenges. But your executive leadership, you want to make them aware of. Here's the emotions you can expect and what's driving those emotions. Here are the behaviors you might see and what's driving those behaviors. And then how do you navigate, how do you help your next level down to be prepared for what's to come and painting a picture of that. And then I do the same with the next level down leaders. For them to have practical tools and frameworks. How do I get people feeling okay about this? Understanding the vision as it relates to them, knowing the value that they can still bring, how do I help them get past this emotional hurdle and Then if you're starting to see, you know, some strange behaviors, which Bruce, I think we talked about when we first even thought about having me come on, like I, in my book, I have 10 Personas and they're caricatures. Right. So I have the know it all, the know nothing, the dominatrix, the missing in action, the opportunist. Because I wanted to bring those behaviors to life.

Speaker B: Yeah.

Speaker A: So a lot of the work that I do is about that leadership preparedness piece because that's the gap that I see.

Speaker B: Yeah, it's. I envision almost this like primate sociologist with like, you're kind of observing things in the wild and ooh, look at this court exchange of establishing dominance in different situations and stuff like that. But it feels very, yeah. This kind of whole behavioral and underlying kind of drivers, like what are the emotional needs and things that are kind of coming up in these situations that are driving these behaviors. And if you can understand that, you can figure out, okay, well, where are the levers that I have and what can I do to guide people or nudge people to positive outcomes?

Speaker A: Absolutely.

Speaker B: What is not prepared look like and what does prepared look like? Can you give us some specifics of things that you're observing in leadership that tells you, hey, there's real risk here and something we need to get on the table and something we talk about. And what do you see that's like, okay, they're in good shape. This is going to create a successful opportunity or is going to help avoid some of this kind of cultural people issues that come up in this process.

Speaker A: So in the first part, right, what does the, what does not prepared look like? I actually, I give credit to Marshall Goldsmith, who a very famous executive coach who wrote the book what Got yout Here, Won't get yout There. Because to me that is, that's the classic tension point that I see repeatedly, which is you've been on a high growth trajectory. You, you've got the objectives, the strategy, you've been executing fabulously well. And now either you've done so well that you can acquire other companies or you've done so well that you are now an acquisition target. The same leadership principles do not apply post M and A. And so what I see of lack of preparedness is there's an assumption, hey, we've been doing well, we're a great team, we work well together. We should be able to weather this. This is just an inflection point. And now, ho, holy cow, we've got more money, we've got more Capital or, you know, whatever the celebration is around. And I'll say that's it is great. But the reality is, what got you here, that growth, what drove the growth and your appreciation, understanding that leadership toolkit. It's now different tools that you need to use in your toolkit. And some leaders know that, but a good majority don't realize that because now, frankly, you're up and on the soft skills, and I hate that term. But, um, you know, you're now. It's about empathy and compassion and meeting people where they are and understanding that you can have rock star players that struggle in this time. I write about that. They're actually. It's the former rock star in my book. So. And it's repeatedly, you know, that came up a lot, that particular Persona when I was interviewing CEOs, because it's that person who has been fabulously successful up until this point.

Speaker B: Yeah.

Speaker A: But now the metrics for success have changed, and that person, male or female, can have a really hard time pivoting. You know, they're the person who folds their arms and it's like, you know, I'm telling you, this isn't going to work. This is not how we've been successful in the past. I'm just going to wait for things to go back to the way they were. I can't wait to tell you I told you so.

Speaker B: Yep.

Speaker A: And so if you aren't prepared for that reality that the metrics for success automatically change, it's a new inflection point. You've taken your company in a new direction, whether you're acquired or the acquirer. And so the importance of understanding that part of that preparedness, the lack of preparedness is driven by an assumption that we're fine. We don't really need to pay attention to this preparedness. And that's why I got employed. Having someone come in, particularly if you've never done a merger and acquisition, having someone, whether it's me or another human capital advisor, but someone who comes in and says, here's what to expect again, you know, the emotions people experience and why, the behaviors that you will see for sure. You know, my 10 Personas, I think probably only scratches the surface, but I think they're the thanks to the 60 interviews I did. They're pretty consistent Personas. But that preparedness helps leaders understand not only how to be better leaders, but equally how to manage themselves. Uh, because I've seen that a lot where they too were like, oh, now I understand why I'm feeling this way. So that's to me it's, and this is an overused word right now, but it's really, it's being more intentional.

Speaker B: Yeah.

Speaker A: Recognizing that this is a different part of your company's journey and you need to prepare your leaders differently.

Speaker B: Yeah. Yeah. I always find it's, you know, it's tough to help someone through their own dysregulation when you're dysregulated yourself. So.

Speaker A: Absolutely.

Speaker B: Like put your own oxygen masks, uh, up first, get yourself in a good spot, then you can start helping other people through that process.

Speaker A: And you know, what's, what is helpful when I, because I said I distinguish between executive leaders and then the next level is how many times executive leaders will say, oh, this explains so much. Right?

Speaker B: Yeah.

Speaker A: Because the reality is, and I was an executive too, as you move up, your focus is about just, you know, hitting the numbers. I shouldn't say just. It's about what keeps the business going.

Speaker B: Right.

Speaker A: And you're just assuming your next people down, they'll handle it. You know, whatever's important will come back up to you in a feedback loop. You're just, you're focused on other things. And so part of my, my presentation is about revealing to them why they're seeing what they're seeing and that they have a role, they have accountability and setting their leaders up for success. Otherwise they're going to slow down the momentum, the productivity will drop, they will lose talent. There's a lot of bad metrics, uh, that I've seen every time merger and acquisition, that if you don't deal with the people piece, it undermines the value creation that was what was driving the deal in the first place.

Speaker B: Yeah. How much you, uh, know how much do you do or kind of advising around, you know, how to help, you know, individuals or teams kind of navigate the process versus, hey, let's look at what the future state of this business is going to be and who do you really need or who, who fundamentally is going to be successful or not successful or may want to stay or may not want to stay and help do a little bit of a kind of talent mapping or understanding. Like, hey, these people are actually, you know, maybe not interested, maybe not as a great fit like we need to figure out a plan for them versus these people. Maybe even people that aren't performing as well in the old company but could be really stars in the new one. Given capabilities like we're. How much are you doing the kind of the current future state analysis, talent mapping kind of.

Speaker A: I wish I was doing that More Bruce, It's a great question and a great point. I talk about that a lot because there are times where you as a leadership might say the strategy, the new strategy that we're pursuing, we probably don't need this department awards a duplicate. It's redundant. And obviously that's higher middle market. Your multi billion dollar that can be part of the thinking. But one, it's an untested strategy at that point. And I can't tell you how many times there's a revelation later on. Man, we actually really needed that department. This strategy isn't working the way we thought it would. So that's one aspect. But then also you have people who are not just their job description. They can be massive M influencers in the company in ways that you don't see in the job definition. And so my orientation is always let's figure out how do we upskill these people, evaluate everything that they bring to the company that's not just the job definition to see where else we might

Speaker B: put them unrealized talent, uh, or opportunities.

Speaker A: Absolutely. And it's a pleasure honestly to work with, with CEOs who think that way.

Speaker B: Yeah.

Speaker A: It's not just about the efficiencies that I'm looking for. They're playing the long game. How do I keep people who also have intellectual capital that I don't want to lose? Right. Not just the fact that they're not to their job description. They may be influencing other parts, but they have intellectual knowledge that I can't afford to lose. I uh, need to have that as we transition and onboard other people. And so CEOs who think that way are the ones who are most successful.

Speaker B: Yeah. I worked with some social psychologists or I guess industrial psychology, corporate psychology, you know that looked at it was kind of bigger transactions. But one of the things they did, which I thought was fascinating, all this social network analysis stuff that they would figure out inside each organization, not just from a skill set leadership point of view, but really from uh, organizational influence point of view, like identifying the people that had, you know, a lot of connection and a lot of influence over culture and communication inside the organization. And one of the things they would do is identify who are the people that really need to be read in on this process and get bought into the ideas so that they could, you know, help navigate these things more effectively. They had a lot of influence over, you know, communication how perception on things. And if you can identify, you know, if you're dealing with thousands of people on each side, it turns out there's probably only a dozen people on each side that really need to drive it. And the rest kind of will follow, or at least it will create positive momentum. How much do you get into that? Kind of the whole kind of communication network for each side. And then how is it going to merge together like this? It's a fascinating space for me, but I'm curious what comes up for you.

Speaker A: Yeah, well, and this is where AI is being leveraged. More companies. I'm still, you know, I mean, I've had A.I. uh, companies talk to me about, you know, they can read people's minds and understand the behavior that they're going to, which I'm a little suspicious of. I don't think we're at minority report level, you know, anticipating if someone's going to murder someone else. But that said, I do think AI uh has a role to play in this space that has been burdened, I would say, or underappreciated because you didn't have the data, you didn't have the quantitative analysis. Who are our influencers? And so for me, I'm excited that there are companies that are working on, okay, how do we figure this out in a way, because you also don't want to, you know, intrude or infiltrate on privacy. You, uh, know, to me there's, I'm suspicious when they say, well, we read thousands of emails to determine what people are doing. Like, to me, that's a step over, over the line.

Speaker B: A little Big Brother.

Speaker A: Yeah. Uh, but the objective of revealing who are the people that are really making things happen in the company that I think, uh, is critically important. And I've been privileged, actually. I'm a Forbes contributor and I've done some articles on how AI is coming in from a culture analysis standpoint. And I'm encouraged by what I'm seeing. To me, though, it'll be better driven by those leaders who are truly, the mission is how do we optimize for success as opposed to just looking for the data and, you know, handing it over to someone to help them, you know, decide which department to cut.

Speaker B: Yeah, yeah. I'd m be curious. How does an engagement typically play out for you? Are you typically brought in by the acquiring the acquired and how, like, what's the process that you use to kind of engage with the team and like, how does it unfold?

Speaker A: So my assumption at the beginning, when I first started this mad odyssey, I thought it would be acquiring company. But what's fascinating is I have equally been hired by acquired companies and typically the scenario is they're proud of what they've created. They don't want the legacy to be ruined or undermined, even if, you know, payout down the road and all that. But even just it's a legacy play. They're concerned that everything that they've built is starting to unravel and have me come in and so what an engagement looks like and, uh, you know, regardless of who brings me in, I'd love to say my dream is when they bring me in early enough so I'm preparing the leadership and they have a vision for what to expect. More often than not, they've started to lose the talent and it's more of an audit of, okay, what's happening, where have you made promises? What were assumptions you made challenging assumptions and helping them get it back on track. Yeah, but really my ideal scenario, and if I could do these types all day long, they have me come in and speak to the leadership. Sometimes it's a keynote or an executive leadership summit where I speak to them and prepare them and then meet in a workshop with the next level leaders down to prepare them and arm them. I'd say the key distinction. And if anyone From KPMG or McKinsey or BCG or Bain is listing apologies up front. I was on the receiving end of, uh, those types of consultancies and it just drove me crazy because it was about, they ran the meetings, they decided who was in it, they set the agenda. And I would always say, I need my team. My team needs to get. This is mental muscle they need to build. Who needs to be in this meeting as we figure out how to integrate? What is the meeting about, you know, setting the objective, what do we need to walk out of this meeting with? If you're running that, then they're not learning about the new team they're becoming part of. And it was also about being there for long periods of time. My goal is I want to teach you how to fish, make you as smart as I can about the emotions, the behaviors, and how to give people agency or how to help them see that they have agency. You're not giving it to them. It's letting them know they are empowered to do more than they think they are and how to make sure that is part of what you as a leader are delivering to your teams to get them on track and moving forward. So, you know, the ideal is I get in early to prepare them. More often than not, it's, oh my gosh, everything you said was going to happen has started to happen. Can you help Us fix that.

Speaker B: You predicted the future.

Speaker A: Yeah, yeah.

Speaker B: Um, I'm kind of curious. I find there's a lot of situations that I've been involved in where, you know that we're keeping the possible deal pretty quiet for quite some time, potentially up, up to close, you know, and it's a combination of, you know, we want to keep the people running the business, keep the numbers going.

Speaker A: Right.

Speaker B: I don't want people to take their eye off the ball. Right. A lot of times these deals don't work out, even sometimes even last minute. So we don't want people to get too sold on or, you know, anticipating a transaction that may not happen. But that creates a lot of challenges for leadership. You may only have a handful of the leadership team, right. That's actually knows of, are certainly involved in the details of this whole process. And then, you know, you pull the trigger, you sign documents and all of a sudden now you're in a transition period and a lot of the team doesn't even know it was coming. And so there's a lot of surprise and a lot of change. How do you run across this, how do you navigate this with, with these situations? Because it's somewhat antithetical to everything we're talking about in terms of preparing people, helping people navigate change, you know, having a plan, you know, but in some cases there's no communication around it.

Speaker A: Yeah. And I, uh, absolutely. I have seen that. I have been, I have experienced that myself. And the tricky part is depending on the size of the company. But when you have someone who feels blindsided, who has an influential role and blows up unexpectedly, although I say you always can expect it, expect the unexpected.

Speaker B: Yeah.

Speaker A: Um, and so where I have seen success and as an M and a whisperer, particularly if the leader is someone who is known for their transparency, for being someone who is already aware and sensitive about, okay, who in my team is going to take this well, who won't? Where that CEO prepares, has one on one conversations with people, you know, 24 hours even before the deal is announced, to, as you said, read them in, but have them understand. And this is the role that I see you playing. This is the reasons why we had to keep this tight, giving that understanding and just saying, I think we have a huge opportunity. The reason we're doing this is to create greater value for our company and their company. The role I see you playing. But there's an opportunity for you to create within this something even bigger. And having those types of conversations, particularly now, where, I mean, everything feels so remote and Transactional, that one on one can really be powerful. And having that person feel valued. Because at the end of the day, Bruce, it's exactly what you said up front. If people don't feel valued within this and you don't show them that they're valued, they will interpret. Oh, yeah. I guess you didn't care about me. I guess you didn't care about everything I did to help make this company where what it is.

Speaker B: Yeah, yeah. And I mean, I would love to kind of get some examples. I don't know if you could walk us through some of these archetypes or like, how do you actually empower a leader is to kind of, okay, so look, here's what's going to happen. Someone's going to do this, and this is what's going on and this is how to deal with it. Uh, like walk us through a little bit of the practical side of actually helping leaders navigate this process and kind of diagnose things.

Speaker A: And what I, uh, will include in the show notes, one of, um, my lead gen resources, all 10 Personas. So the pictures, the caricatures, how to spot them and identify them, what the challenges that they might bring to the deal and how you as a leader can help them, that's the cheat sheet. And obviously I go in much more detail in my book. So I talked a little bit about the former rock star. And just to put a pin on that particular Persona, because I every interview I did with a CEO, they were like, up. We've had a couple of those. In fact, we had a whole department of rock stars who struggled to pivot. And the coaching that I give there is acknowledging the role that they played in making the company valuable and the opportunity to continue to contribute that. But recognizing that the company was not going to be successful doing things the way it had been done, that the reason for this deal is a new growth strategy objective, and we're taking the company in another direction. Your skills still apply, but it's, you know the adage, you can bring a horse to water, but you can't make them drink. You can't coddle and bend over backwards. Because I have seen companies do that where they felt a little held hostage by their head of sales who said, I don't understand why we're doing it this way. This will never work. And then it undermines the success of the deal. So recognizing helping a former rock star see the value they contributed, but the need to pivot and adapt that skill set to bring others along. And by the way, when you do that when someone who's been on the fence converts and pivots and stays open to, okay, I see where the company is going on, why we're doing that, that can bring along a lot of your other fence sitters. The people who are in the middle.

Speaker B: Yeah.

Speaker A: Who aren't excited, who aren't, you know, stewing over in a corner, but they're just kind of waiting to see how it plays out. So someone who, you know, goes from former rock star back to, I think this is great for the company. Let's move forward. Uh, another one in particular, the ostrich. Right. We all kind of have a little bit of ostrich in us when we first hear the news, if we haven't been at the deal table for sure.

Speaker B: Denial. Denial.

Speaker A: Because what happens is we all inevitably have a rosy picture of our future. And when I say rosy, meaning you think, okay, I'm following my career path. This is what I'm going to do. I've always had this role in the company. I love what I do. It's going to be great. And. And just the words merger and acquisition puts fear in the heart of pretty much every person, because they've read all the negative stories. They've seen the stats, their brother, the cousin, someone went through one, and it was an awful experience. So all M and A comes with so much negative baggage. You kind of start at negative 10. And that's what I say to CEOs. You're not. You're just trying to get to zero at first because of all the outside influence. And so an ostrich is, you know, they're sticking their head in the sand and so helping them to see, you know, talking through. What are you afraid of? What are the things that. That are holding you back from committing to that, and what is the obstacle that. That needs to be overcome for you to see the potential. And again, it's about acknowledging the value that they brought to the company to get it to that point and equally acknowledging. And here's how that skill set, your expertise is going to play a role. And so, you know, similar to the former rock star, but this, the ostrich is somebody who just keeps their head in the sand and tries to ignore that any change is happening. And so bringing them along. And I found the leaders who acknowledge their own hesitation and saying, listen, at first I was thinking, no, we should be able to. The company will be fine on its own. But I recognized in order for the company to really grow in the. In the way that we wanted to, we needed to partner with. So and so we needed to acquire for whatever the skill set, the service solution, whatever it is that that drove the acquisition. So acknowledging your own struggles can be really influential.

Speaker B: I'm curious the balance on that, because I think, I think if you look at the last 50 years of leadership philosophy or things like, you know, it started out being very like, we're all business here. It's all like, very logical. And then we kind of shifted more into this. No, you should be more vulnerable. You should kind of, you know, it's the way to connect with people, create empathy, like bring your own kind of fears and concerns to the table. And, you know, I think, like, I've seen leaders kind of struggle with this balance between some of this stuff. Is there any guidelines or heuristics or advice that you give folks in terms of, yeah, you, you want to empathize and you want to connect and you want to talk about your own vulnerabilities and like, where are you concerned? Where do you, uh, your own struggles with this? But you know, at the same time, you don't want to freak people out, right?

Speaker A: Exactly.

Speaker B: Too far. Like, where do you draw the line there?

Speaker A: Well, and to me, unfortunately, I think some leaders have just gotten bad coaching, right? Because the vulnerability. I don't need to know that you're struggling with your spouse as a result of this decision. Uh, it's. There's reasons why those are private things. And for me, the guideline is always think about, put yourself in the shoes of your employees. What are the questions that they're asking themselves that you already can anticipate and answer. One of the things, it happened to me, where it was the second acquisition I was a part of. So Nokia acquired Naftech, where I was the head of B2B marketing. So, uh, that's when I went and was acquired. The next company I went to, the team I inherited, had been acquired.

Speaker B: Okay.

Speaker A: And I knew the questions that they had that they weren't asking me, So I did one on ones with each person. I had 12 people on the team, and then I got them all together and said, okay, here are the answers that I gave. You know, some of you had different ones, some of you had the same. So I want to make sure you all have the same answers. But here are the questions that you didn't ask me that I know you have. And let me give you what I know and let me tell you what I'm working on to get answers to. And I had a guy at the end of that meeting go And I thought you were a witch. Like, how'd you know? And I said, because I've been in your shoes, I know what this is like. And so for me, part of that vulnerability is it's tying it to the business. How I felt, what I was thinking, why I, as a leader now, uh, want to make sure that I'm getting answers to the questions and why we need to have an open feedback loop. I need to know what are the obstacles that are presenting problems for you that I can help make sure are moved. And if I come back two weeks from now and I still don't have a question, an answer to one of your questions, call me on it. Like, this needs to be a two way dialogue. And so I coach CEOs to be human. To me, vulnerability is just being human and anticipating knowing the questions that people have and having answers for them or sharing that you are looking for the answers to it so that they can do their job.

Speaker B: Yeah, yeah. I'm curious. Do you ever run into a case and m, maybe you get brought in once the deal is kind of underway, but do you ever run to a case where you do the analysis, you knew both sides and you say you shouldn't do this transaction. Like there's just too much cultural difference. And like this is as, as much as the numbers make sense and kind of the strategic offer makes sense, like culturally this is going to be a train wreck and you should not. Or at least up front, like this is going to be a big process. It's going to take a lot of time and energy. You need to kind of plan for it, budget for it, you know, put in time for it. Tell me about that.

Speaker A: Yeah, there's one that comes to mind. So my goal, uh, and it's, I'm glad you asked the question because it's important to highlight, I think human capital advisors, there might be this perception, oh, they're just going to come in and tell us everything we're doing wrong as it relates to people. Right. My goal, M, M and A. In my mind, mergers and acquisitions have the potential for great success. It should be a growth strategy play that has success, that value creation is achieved. And so oftentimes I'm coming in where even I'm finding cultural differences I will look for, okay, here's where you are aligned. These are the metrics, right? The decision making process, the org structure, the values piece of it, how you reward, how you communicate, all the cultural markers I'm looking for, okay, where are you aligned and where are there differences that it's just important for you to understand that there are differences. I think they're better in this than you are and to be open to that and where you actually could co create something better. Right. Whether it's a communications, like one's a more informal communication network and another one has a more formal. That can often be a lot of friction. You know, I see that a lot when it's a larger corporation that acquires a more entrepreneurial oriented company. But where I have had. It was a gentleman, frankly, was actually looking to acquire his father's old company and they had a falling out and he knew that the company was struggling and he thought, okay, and his siblings were still running the company and he thought this could be a great way to bring things together. But as I did an assessment and evaluated where the three siblings were versus what his vision was. Uh, and I didn't say one way or the other, but it was more. Let me just share with you the expectations and where. I think they are not aligned with where you want to take this.

Speaker B: Yeah.

Speaker A: And so, you know, those are hard because you can see the potential. But there's a lot of drama that needs to be overcome in order for the business to do well. And that's that for me, is where you just have to be honest as, as someone who's doing that assessment to say, here's what you would have to overcome in order for this to be successful.

Speaker B: Yeah, it's. I think that's probably the hardest thing I find as a coach is like you, you can. You kind of have to have the conversation of saying, okay, well, look, um, this is what I see. This is what I think the outcome might be, the ways in which you can kind of try to avoid some of these things. But at the end of the day, it's your choice. Right. And sometimes founders still make the choice to do that and you just want to make sure that they're eyes wide open. Doesn't necessarily mean that it's going to work, but at least they're going into it with, um, the data and the insight that they need. Do you ever run into cases where the. Once you kind of have the assessment and you kind of understand the two organizations, that there are specific suggestions or strategies that you bring to the table in terms of, well, like these things could merge. Well, let's move these. But this stuff, you really ought to keep this separate. Let's keep this as a separate team because they work differently and they create a lot of value that way. And if you try to integrate Them that's going to kill their mojo. How much are you involved in the kind of post, post merger organization design that is kind of based on understanding the teams and the desired outcomes and what is going to be the best structure for them?

Speaker A: Yeah, to me, I think the most the role that I play is facilitating those discussions, but letting the leadership figure out. And what I'll say is, because often, and maybe you've seen this as well, often the org structure is just based on, hey, we're the acquiring company, you're going to be acquired, we'll open up a couple of seats. Uh, you know, a few people go here. And the first step I'll always take is let's separate who people. But this is the new vision for the company. What is that? What is required to achieve that vision? What are the roles needed? Uh, and then who are the best people for those roles? It should not be who's from what company. And you need to go in with that mindset because if there's a, well, you know, this person was always head of this. And so we're just going to keep them that we have to be upfront and honest that this is a new strategy, new objectives, a new vision for what the company is. And the org chart should reflect what is needed to achieve that vision, not who's at what level and has done what. And for me that's a big part of it. But I find if I help guide that conversation and the thinking, then the team, frankly is more invested. They're bought in because now they're thinking, okay, that's the vision. That's what we need to think about. How do we plan for that? The other thing, Bruce, that I would say, because it's a very popular exercise that I run, is it's called a pre mortem because oftentimes people are like, well, you know, how do we know if it's going to work? Yeah. And so I'll say, okay, we've all heard of a postmortem, you know, patient dies. Now let's figure out what led to that death. A pre mortem is, it's a variation of scenario planning, but you get the leadership of both companies that are going to be part of making this successful moving forward. You were in a room and the operating plan is the deal has failed. We're all going to work on the assumption that the deal has failed. And now we're going to dissect why did the deal fail, what led to that. And you go through, it's almost a reverse swot. Analysis, but you're considering, you know, what if a competitor actually moves faster than we expected or a completely unexpected entrant into this industry comes along. And this is what's fascinating to me about doing a pre mortem is how often you'll have someone in the room who says, you know, I've been thinking about this. If so. And so company actually comes into our category with that product, that could be devastating to our ability to do xyz, where the government comes out with, you know, legislation like, you can't predict everything. But what the beauty of a pre mortem is, the ego is not involved, you're not blaming anyone. So now people get even competitive about, okay, let me think of all the things that could have driven this failure and that dialogue and discussion. Not only I've had CEOs say to me, this is like the closest I'll ever get to having a crystal ball. So not only do you have a vision for, okay, here's some assumptions we made that we need to challenge, but then, you know, when I work with teams, then you identify, okay, this actually feels like if this happened, this would be devastating. Let's have a team task, someone who leads it, figure out who you need on it to then solution for that so we feel prepared should that happen. And so, you know, it's again, it's being intentional, proactive, and thinking about how do we set people up for success.

Speaker B: Yeah, it's funny, I'm smiling because I do an exercise within the company. Usually I'm working with the company and we're focusing on strategy and how are they going to scale. And I'll break the senior leadership team into small groups and we'll run an exercise I called the takedown, where they each are responsible or they come up with a, uh, new company. I'd say they all leave the company, they get a certain amount of startup capital, and they have to start new businesses to take down the existing company. So they all do in groups and then they come back and they present their cases like, oh, well, this is what we do. And I tell them they can poach anyone they want. There's no compete, no non to compete. But it's amazing. Like this, oh, I'm gonna, I'm gonna take this person and this person and we're gonna do an AI version of this and we're gonna find this and then we're gonna acquire this company. And invariably the leadership team is like, oh, my gosh, all right, now we need to start figuring out how we're going to compete with these things because it's so stuck in their ways, or they just, they fail to innovate or they fail to see innovation, opportunity or threats. And, you know, you can workshop this stuff and get that stuff on the table in kind of a safe, fun way. Now they're actually able to deal with and say, oh, okay, I see where the risk is and I see where we need to create some. Either we need to go move faster on this thing, or we need to create a bigger competitive advantage, or we need to create a defensive moat around this. So very similar. Kind of like if you can put them in that future state and have them reflect, they know, they often know that things are going to happen. They just don't want to talk about it. And if you can create a fun, safe way to get it on the table, it can be huge.

Speaker A: So you and I have, have the similar energy and why we do that exercise, because it's to remove ego.

Speaker B: Yeah.

Speaker A: You, uh, know that we're not accusing anyone of anything. You didn't drive the failure. This is a fictitious scenario. But having those. Because exactly as you said. And I've seen this every time I do this exercise where someone will say a variation of, you know, I've been thinking about this. It's been gnawing in the back of my mind because so much of the energy is around. Let's just get the transaction done. All of the energy is on that you're not poking holes into. Okay, well, what would make this not go wrong? Because so much of what you're trying to do is say, like, let me figure out all the ways to make this right. And so it's that hitting that pause button to anticipate the future. You know, it really is, uh, I think a crystal ball. And your exercise is the same way. And it actually leverages people's smarts.

Speaker B: Huh?

Speaker A: In a proactive way to say, okay, we need to be working on that.

Speaker B: Yeah. Little competition. Competition always brings out some interesting things in people. Uh, Jennifer, this has been a pleasure. We're going to hit time here. If people want to find out more about you, about the book, about the work that you do, what's the best way to get that?

Speaker A: I only hang out on LinkedIn. I'm not a multi. I'm not a multi platform lady. You know, in the show notes, there will not be seven ways that you can reach me. It's my website and LinkedIn. And that's intentional, you know, because I. There's enough noise out there. I offer value. I write for Forbes and hbr. So for me, it's really about focusing where I think I can add value most. So come join me on LinkedIn or on my website, which is Jennifer J. Fondreve.com. i try and keep it simple.

Speaker B: Yeah. Uh, excellent. We'll make sure all that is in the show notes. Jennifer, it's been a pleasure. Thank you so much for taking the time today.

Speaker A: Thank you. Thank you. Really a pleasure for me as well.