Friday, November 29, 2013
Execution as a Strategy in Acquisition – Relevance to Agile Transformation
In one of the networking events on effective agile transformation that I facilitated, one of the learners asked a question about how agile did not measure well in an organization that the learner’s organization acquired. The learner reasoned that the acquired company was a smaller organization that claimed financial profit in a niche market but has been bleeding after acquisition when adopting agile. While the specifics of the details has to be left out in this blog, the discussion made me realize some of the pitfalls in agile adoption in mergers & acquisition prior to shifting responsibility of failure on agile practices.
This quest for executing mergers & acquisitions (M&A) successfully led me pursuing several articles and books which made me feel that “Execution” itself should be “strategically” thought through by leaders within an organization and particularly with M&A. Paul Burmeister, who has executed in the capacity of COO and CFO in many industries, quotes multiple ideas to ensure that the M&A activity becomes successful, emphasizing critical importance of the leaders’ synergy from both the organizations to establish success factors to measure the efficiency of integration.
Among these stand out an important point on whether the M&A focuses on products, processes, and intellectual capital (Dahl, 2012). While M&A accelerates the acquiring organization’s competitive advantage by leveraging the new product line or the intellectual capital that leads to quicker access to additional markets horizontally or vertically, the reference to processes differentiated how clash of various processes (waterfall versus agile) may have to carefully weighed.
I think here is where organizational leaders may be failing to adopt asking “what would have to be true for the” execution to continue to be a fantastic choice? (Lafley & Martin, 2013, p. 204) If leaders failed to understand the twelve principles behind agile and scale them appropriately, then, they have created an organizational impediment for agile to fail their organizational success. Rationalizing on how the acquired company has always functioned differently and seeing no need to change fails to take advantage of the additional capabilities that come with the acquisition, reasons Jeff Sutherland, one of the contributors to the Agile Manifesto, who attributed the organization’s failure to remove impediments for Agile to fail (Larman & Vodde, 2011).
Once we come to terms that we have to review the processes in place, there are a couple of additional areas to look at for successful integration of agile in M&A. These include identification of proper product owners and tools for interaction. Unleashing properly spaced out adoption of skilled people to work as product owners that understand the agile principles of establishing a good risk adjusted product and sprint backlog, prioritizing the backlog to build trust and maintaining a cadence balancing team’s commitment in distributed and virtual teams that have to be embraced, and recalibrating on the tools of communication is vital. Charlie Rudd, CEO of SolutionsIQ, underscores how organizations fail to implement agile without building the product owner capability (2013, para 5). Firms should give importance to training in such a way that time is made for people to get trained, says Larman & Vodde (2011, para 4).
Given these observations, what other execution specific strategies should one consider for agile to succeed with M&A activities? Should there be a standardized M&A integration checklist put together for agile success and if so what are some pointers to definitely consider? Please share your thoughts.
Dahl, D. (2012). 7 steps to a successful company merger or acquisition. Retrieved Oct 10, 2013, from, https://www.openforum.com/articles/7-steps-to-a-successful-ma-a-small-business-guide/
Larman, C. & Vodde, B. (2011, February 9). Top ten organizational impediments. Retrieved Oct 11, 2013, from http://scrumedge.blogspot.com/2011/02/top-ten-organizational-impediments.html