An international software and services company entered the UK by acquiring a market-leader in a sector familiar to them in other territories. The acquisition was hostile, meaning that due diligence was not possible.
As due diligence had not been undertaken, the acquiring company did not have a full understanding of the assets, liabilities and capabilities of the acquired company. Shortly after the completion of the acquisition it became evident that a rapid and comprehensive action plan was required to transform the acquisition.
A comprehensive programme of activities was designed to transform the capabilities of the acquisition, to address issues with customer satisfaction and quality of products and services, to reduce the cost base, to drive additional revenues and margins, and to improve the engagement levels of the employees.
27 individual projects were created, grouped into 5 areas, designed to improve:-
- Customer service and support
- People capabilities and management
- The infrastructure of the company
- The software development process and the software itself
- Supplier management and risk management
A change organisation was created to manage the transformation programme and projects, enabling ownership and accountability to be clear and transparent and shared across a range of stakeholders. Clear guidance on roles and responsibilities for the change organisation were communicated and education and support was provided to the change organisation members. The acquisition did not have strong communications capability; as this is a crucial part of any transformation programme an internal communications capability was established and training in communications skills was delivered across the company. Structures were established that enabled all employees to understand the transformation programme and projects, and to facilitate their participation. A brand identity was developed to support the transformation programme and facilitate engagement.
- Investments in customer service and support delivered improved customer satisfaction and loyalty. Support revenues and margins increased significantly with acceptable customer attrition as a result of support prices being raised by more than 20%.
- Employee satisfaction improved despite a consultation and redundancy programme that delivered a lower cost base. Professional Services utilisation levels were increased and a High Performance Culture was introduced.
- New IT infrastructure was delivered that reduced the risks to the business by eliminating single points of failure. IT support costs were reduced by reducing complexity and by introducing virtualisation.
- The life of the existing product suite was extended substantially and additional investments were made in reducing the number and impact of product errors (software bugs). The product management processes were reviewed and improved. Customers were engaged more with the product management processes, creating greater customer loyalty.
- Potential additional revenue and margin streams were generated by collaboratively developing new services with partner organisations. These services increased the addressable share of customer spend.
- Make sure the programme design aims for stretching results, but be sensitive to the realities of the current situation, and pragmatically redesign as new information comes to light. Foster a strong sense of ownership and engagement by involving as many as possible of the stakeholders in the design of the programme, and the projects.
- Establish an organisation to manage the programmes, with clear “roles of change” and sufficient education, support and coaching. Make sure there is sufficient capability within the organisation to support the operational and the transformational activities concurrently.
- Take the opportunity to establish the values and norms that the organisation aspires to and to identify what would not be acceptable. Help people to identify what they are moving towards and what they are moving away from.
- Provide appropriate project and programme management controls to balance the control needs of the programme with the culture of the organisation.
- Establish strong two-way communication channels and support them with high levels of relevant activity. A strong ethos of “tell it as it is” encourages openness.
- Support the programme with appropriate levels of scenario planning. Where scenario planning identifies potentially difficult issues, address them early in the process and use the communications processes to support this aspect.
See also www.dancewiththeelephants.com