Dr. Alexandra Reed Lajoux and Professor Antonio Nieto-Rodriguez outlined ten ways to apply the science of project management to the art of M&A (mergers and acquisitions) in a recent article, published in Financier Worldwide Magazine. In this blog, I focus on four ways to apply the art of project management to M&A projects.
For some years, I’ve been studying why the failure rate on project management is so high. I have concluded that part of the problem is the scheduling approach. I have a strong sense that adopting a tool (Gantt chart) that was developed for a linear and predictable process (construction) is a flawed approach on business projects where nothing is particularly linear or predictable.
The authors make the case that this is an area that has “cried out for project management skills” but they don’t elaborate on why. I suspect their argument for project management on M&A deals is a function of at least four characteristics:
- While the basic steps in an M&A deal may be similar from project to project, the cast of characters changes with each one.
- Deadlines abound, and many of them are critical to the success of the project.
- Much of the work has to start before anyone is clearly in charge.
- The stakes are large; a hefty sum of money is typically involved.
Many of the suggestions in this excellent article are targeted more at the executives who are the decision makers behind these M&A projects. But let’s not stop there.
To apply the art of project management to M&A deals, we need a project management approach that was developed specifically for business projects, rather than construction projects. We need to focus more on the people and less on the schedule. Said differently, we need to focus as much on the art of project management as we do on the science. Here are four ‘artful’ tips for managing M&A projects:
In their article, Dr. Lajoux and Professor Nieto-Rodriguez discuss the need for managing multiple metrics and understanding why you are doing the project. That’s a start. Defining what success actually looks like is another step in the process. What are the outcomes you are looking to achieve and how will you measure them? Less is more. Be selective in the metrics you choose.
Set your project up to be a winner.
Break the project down into the essential activities that need to be accomplished. Don’t seek to identify every step for each of those activities. Define what ‘done’ looks like for each of these activities.
Estimate the ‘complexity’ of each of the essential activities. Aim to break the project down into activities that can be essentially completed in a few days to a week. That sets your team up for little wins every time you deliver a new work product. This fuels momentum and builds energy on your project. Everyone wants to work on successful projects.
As I’ve written about before, you won’t be able to reasonably estimate percent complete on your projects. Put aside any earned value analysis, and focus instead on delivering work products that are complete.
Understand the need to socialize these work products with your stakeholders. The more people that need to sign off on each work product, the longer it will take.
The process of socializing new ideas and recommendations, and how you have these conversations, will go a long way towards helping drive the organizational changes in the new entity.
Pay particular attention to what details are confidential. Inevitably, in change projects of all sorts, there will be pieces of information, often around changing job requirements and organizational structures that cannot be disseminated and yet, there is the need to socialize ideas for change. This may require that you produce multiple versions of the same work product – one for general review and one for executive review.
I stipulate that M&A deals are much more linear than many business projects, but I still believe that staying agile in a rapidly changing world is essential.
Stay flexible and be willing to adjust the project breakdown as you learn more about what is needed, but don’t expand the actual scope of work without proper approval.
Spend less time on scheduling and more time on doing. Let a solid approach to risk management guide you in how you select the next activities for execution.
Focus more on coaching than management.
People on your project teams may well come from both companies, as well as a law firm, M&A advisory firm, accounting firm, and a project consulting firm. They may or may not be working on these project activities full-time. They likely have not worked together before and there is no time for them to jell, as a team, before the deadlines begin to mount.
You will probably not be able to get a firm time commitment from many of these individuals so entering time availability into a Microsoft Project type of software is futile. Focus instead on getting individuals to commit to meeting the critical deadlines and incrementally delivering value to the client.
The intersection of legal and business is a very different world from the construction world. A coaching style, rather than a managerial style, may work more effectively.
Dr. Lajoux and Professor Nieto-Rodriguez are correct that those managing M&A projects need to do a better job of project management. If you are struggling with this, or want to chat about how to build a better project management tool for the business world, give me a call.