How Founder-Led Companies Navigate Acquisitions Without Losing Top Talent

Bruce EckfeldtWelcome, everyone. This is From Angel to Exit. I'm Bruce Eckfeldt, I'm your host. Our guest today is Jennifer Fondrevay. She is the M&A whisperer. She's also the founder of Day 1 Ready. We're going to hear about her experience, her insights, and the work she's done in the M&A space. I'm sure lots of interesting conversation is going to come up here, and hopefully some good hints, tricks, and insights for founders who 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.

Jennifer FondrevayThank you for having me.

Bruce EckfeldtIt's a pleasure. Before we get into all the M&A stuff and talk about transactions, I would love to get a little personal background. How did you get into this space? Is this something you knew in kindergarten, that you wanted to be an M&A expert? Where did this all start for you?

Jennifer FondrevayWhat's a nice girl like me doing in M&A, right? I ask myself that as 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.

Bruce EckfeldtThere we go.

Jennifer FondrevayIt really happened through lived experience. I was a corporate marketing executive, and I went through three multibillion-dollar merger and acquisition deals. I've been on all sides of the deal table: acquired, brought in as a change agent for an acquisition, and also acquired by private equity, which is its own unique experience. Each of those built on the other in making me think there has got to be a better way to do mergers and acquisitions, where the value thesis, the value creation, is actually achieved.

What I saw consistently in my own experience, and then in the three years of research I did, was the underestimated aspect of the people part, the people component of a merger and acquisition, and how it drives success. Numbers alone will not do that. So that's why I'm now an M&A whisperer.

Bruce EckfeldtI love it. Tell me about the research. What prompted it? How did you actually conduct it, and what were the learnings?

Jennifer FondrevayWell, first, the research was just because I thought, "Maybe I'm the only crazy person who thinks this could be done better." I had enough similar experiences, despite being on different sides of the table in all three, that I thought, "There are some patterns here in terms of how people react to change, how you manage that uncertainty," and in the leaders who I thought did a better job than others.

So initially, frankly, the research was just to make sure I wasn't going crazy. Maybe I was the only emotional wreck in each of these. What came through in those CEO interviews in particular was that they would say back to me, "This stuff you're talking about, that you're asking me questions about, this is what dooms deals. This is the stuff no one talks about, yet we all know it's underrepresented at the deal table as a critical component of deal success." So that research was enlightening.

And frankly, sometimes I curse this CEO, and sometimes I appreciate the comment he made. He said, "I think this is going to be a great book. A really important message to get out there. But no one's going to run to Barnes & 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 going to put the book out there." It was a survivor's handbook on how to survive M&A, called Now What? Here's my first promo.

But really, I was thankful for the CEO's comment, because I got variations of it: 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, especially if they're not serial entrepreneurs, about how to do this right as it relates to the people.

Bruce EckfeldtWhy is that? If this is such an influential and decisive part of a successful transaction, why does it not come up more? Is it just because it's easier to look at numbers, and it's hard to look at these things? Why isn't more attention paid to it?

Jennifer FondrevayWell, here's my observation. You've probably seen the statistic that 70 to 90% of merger and acquisition deals fail. HBR, McKinsey. I think 99% of CEOs and business owners think that 70 to 90% doesn't apply to them.

Bruce EckfeldtYeah, exactly.

Jennifer FondrevayIt's the truth. And I get it. The energy that comes to a deal is typically focused on the transaction. What's the greatest value? You're focused on making sure you get the multiples and that this is going to be the right kind of partnership. The people piece, the leadership piece, is secondary, if it's even that, because there's 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 and acquisition, it is a different beast. It's a different bronco that you're riding. That's why I'm intentionally called an M&A whisperer, because I'm often engaged to just say, "Okay, what should I expect? How do I need to be thinking about this as it relates to the people challenges?" And, to your point, to raise awareness that your deal team should include, beyond the lawyer, the accountant, the wealth manager, and the advisor, a human capital advisor.

Bruce EckfeldtMaybe we should dig into the definition. When we talk about people and culture, what are we actually referring to in terms of the business itself?

Jennifer FondrevayTo me, it's leadership preparedness. At the foundation, it's helping your executive leaders and then your next level down. I'll call them, for the purposes of this discussion, your frontline leaders, the ones who are in the trenches making the business successful. Each group has slightly different needs. They have similar challenges, but with your executive leadership, you want to make them aware: here are 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, and how do you help your next level down be prepared for what's to come? You paint a picture of that.

Then I do the same with the next level down leaders, so they 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 they can still bring? How do I help them get past this emotional hurdle? And then there's when you start to see some strange behaviors, which, Bruce, I think we talked about when we first thought about having me come on. In my book I have 10 personas, and they're caricatures. 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. A lot of the work I do is about that leadership preparedness piece, because that's the gap I see.

Bruce EckfeldtI envision almost a primate sociologist, observing things in the wild. "Ooh, look at this exchange, establishing dominance in different situations." It's this whole behavioral piece and the underlying drivers. What are the emotional needs that are coming up in these situations and driving these behaviors? If you can understand that, you can figure out where the levers are and what you can do to guide or nudge people to positive outcomes.

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

Jennifer FondrevayOn the first part, what does not prepared look like, I give credit to Marshall Goldsmith, a very famous executive coach who wrote the book What Got You Here Won't Get You There.

Bruce EckfeldtYeah.

Jennifer FondrevayTo me, that's the classic tension point I see repeatedly. You've been on a high growth trajectory. 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're now an acquisition target. The same leadership principles do not apply post-M&A.

What I see in a lack of preparedness is 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 holy cow, now we've got more money. We've got more capital," or whatever the celebration is around. It is great, but the reality is that what got you here, what drove the growth, your understanding, that leadership toolkit, is now different. There are different tools you need to use in your toolkit.

Some leaders know that, but a good majority don't realize it. Because now, frankly, it's about the soft skills. I hate that term, but it's now about empathy and compassion and meeting people where they are, and understanding that you can have rockstar players who struggle in this time. I write about that. It's the former rockstar in my book. That particular persona came up a lot when I was interviewing CEOs, because it's the person who has been fabulously successful up until this point, but now the metrics for success have changed, and that person, male or female, can have a really hard time pivoting. They're the person who folds their arms and says, "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."

Bruce EckfeldtYep.

Jennifer FondrevaySo you have to be prepared for that reality, that the metrics for success automatically change. It's a new inflection point. You're taking your company in a new direction, whether you're acquired or the acquirer. The lack of preparedness is driven by an assumption that we're fine and don't really need to pay attention to this.

Preparedness, and that's why I get employed, is having someone come in, particularly if you've never done a merger and acquisition, whether it's me or another human capital advisor, who says, "Here's what to expect": the emotions people experience and why, the behaviors you will see for sure. My 10 personas probably only scratch the surface, but thanks to the 60 interviews I did, they were pretty consistent personas. That preparedness helps leaders understand not only how to be better leaders, but equally how to manage themselves. I've seen that a lot, where they too are like, "Oh, now I understand why I'm feeling this way."

So to me, and this is an overused word right now, it's really about being more intentional. Recognizing that this is a different part of your company's journey, and you need to prepare your leaders differently.

Bruce EckfeldtI always find it's tough to help someone through their own dysregulation when you're dysregulated yourself.

Jennifer FondrevayAbsolutely.

Bruce EckfeldtPut your own oxygen mask on first. Get yourself in a good spot, and then you can start helping other people through the process.

Jennifer FondrevayAnd what is helpful, because I said I distinguish between executive leaders and the next level, is how many times executive leaders will say, "Oh, this explains so much." Because the reality is, and I was an executive too, as you move up, your focus is just on hitting the numbers. I shouldn't say just. It's about what keeps the business going. And you're assuming your next people down will handle it, and whatever's important will come back up to you in a feedback loop. You're focused on other things.

So part of my presentation is revealing to them why they're seeing what they're seeing, and that they have a role. They have accountability in setting their leaders up for success. Otherwise they're going to slow down the momentum, productivity will drop, and they will lose talent. There are a lot of bad metrics I've seen every time in a merger and acquisition where, if you don't deal with the people piece, it undermines the value creation that was driving the deal in the first place.

Bruce EckfeldtHow much advising do you do around helping individuals or teams navigate the process, versus, "Let's look at what the future state of this business is going to be. Who do you really need? Who is fundamentally going to be successful or not? Who may want to stay or may not want to stay?" A kind of talent mapping, understanding that these people may actually not be interested or not a great fit, so we need to figure out a plan for them, versus these other people. Maybe even people who aren't performing as well in the old company but could be real stars in the new one, given their capabilities. How much of that current and future state analysis and talent mapping are you doing?

Jennifer FondrevayI wish I were doing that more, Bruce. It's a great question and a great point. I talk about that a lot, because there are times when leadership might say, "With the new strategy we're pursuing, we probably don't need this department," or, "It's a duplicate. It's redundant." Obviously in the higher middle market, the multibillion-dollar deals, 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 also, people are not just their job descriptions. They can be massive influencers in the company in ways you don't see in the job definition. So my orientation is always: let's figure out how we upskill these people and evaluate everything they bring to the company beyond the job definition, to see where else we might put them.

It's a pleasure, honestly, to work with CEOs who think that way, who say, "It's not just about the efficiencies I'm looking for." They're playing the long game. How do I keep people who have intellectual capital I don't want to lose? Not just because they go beyond their job description and may be influencing other parts of the company, but because they have intellectual knowledge I can't afford to lose. We'll need that as we transition and onboard other people. CEOs who think that way are the ones who are most successful.

Bruce EckfeldtI worked with some industrial psychologists, corporate psychologists, on bigger transactions, and one of the things they did that I thought was fascinating was all this social network analysis. They would figure out, inside each organization, not just from a skill set or leadership point of view, but from an organizational influence point of view, the people who had a lot of connection and a lot of influence over culture and communication inside the organization.

One of the things they would do is identify the people who really needed to be read in on this process and bought into the idea, so they could help navigate these things more effectively, because they had a lot of influence over communication and perception. If you're dealing with thousands of people on each side, it turns out there are probably only a dozen people on each side who really need to drive it, and the rest will follow, or at least it will create positive momentum. How much do you get into the communication network on each side, and how it's going to merge together? It's a fascinating space for me, but I'm curious what comes up for you.

Jennifer FondrevayThis is where AI is being leveraged more. I've had AI companies talk to me about how they can read people's minds and understand the behavior they're going to have, which I'm a little suspicious of. I don't think we're at Minority Report level, anticipating whether someone's going to murder someone else.

That said, I do think AI has a role to play in this space, which has been underappreciated because you didn't have the data. You didn't have the quantitative analysis of who your influencers are. So I'm excited that there are companies working on how to figure this out in a way that works, because you also don't want to intrude on privacy. I'm suspicious when they say, "Well, we read thousands of emails to determine what people are doing." To me, that's a step over the line.

Bruce EckfeldtBig Brother.

Jennifer FondrevayBut the objective of revealing who the people are that are really making things happen in the company, I think that is critically important. 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 leaders whose mission is truly how to optimize for success, as opposed to just looking for the data and handing it over to someone to help them decide which department to cut.

Bruce EckfeldtI'd be curious how an engagement typically plays out for you. Are you typically brought in by the acquirer or the acquired? What's the process you use to actually engage with a team, and how does it unfold?

Jennifer FondrevayMy assumption at the beginning, when I first started this mad odyssey, was that it would be acquiring companies. But what's fascinating is that I've equally been hired by acquired companies. Typically the scenario is that they're proud of what they've created. They don't want the legacy to be ruined or undermined, even if there's a payout down the road and all that. It's a legacy play. They're concerned that everything they've built is starting to unravel, and they have me come in.

Regardless of who brings me in, my dream is that they bring me in early enough that I'm preparing the leadership and they have a vision for what to expect. More often than not, they've started to lose talent, and it's more of an audit. What's happening? Where have you made promises? What assumptions did you make? Challenging those assumptions and helping them get back on track.

But my ideal scenario, and I could do these all day long, is that 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 I meet in a workshop with the next level leaders down to prepare and arm them.

I'd say the key distinction, and if anyone from KPMG or McKinsey or BCG or Bain is listening, apologies up front: I was on the receiving end of those types of consultancies, and it drove me crazy, because they ran the meetings, they decided who was in them, and they set the agenda. I would always say, "I need my team. This is mental muscle my team needs to build. Who needs to be in this meeting as we figure out how to integrate? What is the meeting about?" Setting the objective: what do we need to walk out of this meeting with? If the consultants are running that, then your people aren't learning about the new team they're becoming part of. And it was also about the consultants being there for long periods of time.

My goal is to teach you how to fish. To 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're empowered to do more than they think they are, and making sure that's part of what you as a leader are delivering to your teams to get them on track and moving forward. So the ideal is that 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 it?"

Bruce EckfeldtYou predicted the future. I'm curious. There are a lot of situations I've been involved in where we keep the possible deal pretty quiet for quite some time, potentially up to close. It's a combination of wanting to keep people running the business and keeping the numbers going. We also don't want people to take their eye off the ball. A lot of times these deals don't work out, sometimes even at the last minute, so we don't want people to get too sold on, or anticipate, a transaction that might not happen.

But that creates a lot of challenges for leadership. You may only have a handful of the leadership team who actually know about, or are certainly involved in, the details of this whole process. Then you pull the trigger, you sign documents, and all of a sudden you're in a transition period, and a lot of the team didn't even know it was coming. So there's a lot of surprise and a lot of change. Do you run across this? How do you deal with these situations? Because it's somewhat antithetical to everything we're talking about in terms of preparing people, helping people navigate change, and having a plan.

But in some cases, there's no communication around it.

Jennifer FondrevayAbsolutely, I have seen that. I have experienced that myself. The tricky part, depending on the size of the company, is when someone who feels blindsided, and who has an influential role, blows up unexpectedly. Although I'd say you can always expect it.

Bruce EckfeldtExpect the unexpected.

Jennifer FondrevayWhere I have seen success, as an M&A whisperer, is particularly when the leader is someone known for their transparency, someone who is already aware and sensitive about who on the team is going to take this well and who won't. That CEO prepares and has one-on-one conversations with people, even 24 hours before the deal is announced, to, as you said, read them in. To have them understand: "This is the role I see you playing. These are the reasons why we had to keep this tight." Giving that understanding and 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. Here's the role I see you playing, and there's an opportunity for you to create something even bigger within this."

Having those types of conversations, particularly now, when everything feels so remote and transactional, that one-on-one can be really powerful, and it makes the 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 in this, and you don't show them that they're valued, they will interpret it as, "Oh, I guess you didn't care about me. I guess you didn't care about everything I did to help make this company what it is."

Bruce EckfeldtI would love to get some examples. Could you walk us through some of these archetypes? How do you actually empower leaders: "Okay, look, here's what's going to happen. Someone's going to do this, this is what's going on, and this is how to deal with it"? Walk us through a little of the practical side of helping leaders navigate this process and diagnose things.

Jennifer FondrevayWhat I will include in the show notes is one of my lead gen resources: all 10 personas. The pictures, the caricatures, how to spot and identify them, what challenge they might bring to the deal, and how you as a leader can help them. That's the cheat sheet, and obviously I go into much more detail in my book.

I talked a little about the former rockstar. Just to put a pin in that particular persona: in every interview I did with a CEO, they were like, "Oh, we've had a couple of those. In fact, we had a whole department of rockstars who struggled to pivot." The coaching I give there is acknowledging the role they played in making the company valuable and the opportunity to continue to contribute, but recognizing that the company was not going to be successful doing things the way they had been done. 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 the adage: you can lead a horse to water, but you can't make him 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 it's helping a former rockstar see the value they contributed, but also the need to pivot and adapt that skill set and bring others along.

And by the way, when someone who's been on the fence converts and pivots and stays open to, "Okay, I see where the company's going and why we're doing that," that can bring along a lot of your other fence sitters: the people in the middle who aren't excited, who aren't stewing in a corner, but who are just waiting to see how it plays out. So someone goes from former rockstar back to, "I think this is great for the company. Let's move forward."

Another one in particular is the ostrich. We all have a little bit of ostrich in us when we first hear the news, for sure if we haven't been at the deal table.

Bruce EckfeldtDenial.

Jennifer FondrevayBecause what happens is, we all inevitably have a rosy picture of our future. When I say rosy, I mean 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 just the words merger and acquisition put fear in the heart of pretty much every person, because they've read all the negative stories. They've seen the stats. Their brother, their cousin, someone went through one, and it was an awful experience. M&A comes with so much negative baggage that you start at negative 10. That's what I say to CEOs: you're just trying to get to zero at first, because of all the outside influence.

So an ostrich is sticking their head in the sand. Helping them is talking through: what are you afraid of? What's holding you back from committing to this? What's the obstacle that needs to be overcome for you to see the potential? Again, it's about acknowledging the value they brought to the company to get it to this point, and equally acknowledging, "Here's how your skill set, your expertise, is going to play a role." It's similar to the former rockstar, but the ostrich is somebody who just keeps their head in the sand and tries to ignore that any change is happening.

So it's about bringing them along. I've found that leaders who acknowledge their own hesitation can be really influential. Saying, "Listen, at first I was thinking, 'No, the company will be fine on its own.' But I recognized that in order for the company to really grow in the way we want it to, we needed to partner with so-and-so. We needed to acquire," for whatever the skill set or the service solution is that drove the acquisition. Acknowledging your own struggles can be really influential.

Bruce EckfeldtI'm curious about the balance on that. If you look at the last 50 years of leadership philosophy, it started out being very much, "We're all business here. It's all very logical." Then we shifted more into, "No, you should be more vulnerable. It's the way to connect with people and create empathy. Bring your own fears and concerns to the table." And I've seen leaders struggle with the balance. Are there any guidelines or heuristics or advice you give folks? You want to empathize and connect and talk about your own vulnerabilities, where you're concerned, your own struggles with this. But at the same time, you don't want to freak people out. Where do you draw the line?

Jennifer FondrevayTo me, unfortunately, some leaders have just gotten bad coaching. On vulnerability: I don't need to know that you're struggling with your spouse as a result of this decision. There are reasons why those are private things. For me, the guideline is always: put yourself in the shoes of your employees. What are the questions they're asking themselves that you can already anticipate and answer?

It happened to me in the second acquisition I was part of. Nokia acquired Navteq, where I was the head of B2B marketing. So that's when I was acquired. At the next company I went to, the team I inherited had been acquired, and I knew the questions they had that they weren't asking me. So I did one-on-ones with each person. I had 12 people on the team. Then I got them all together and said, "Okay, here are the answers I gave. Some of you had different questions, some of you had the same, so I want to make sure we all have the same answers. But here are the questions you didn't ask me that I know you have. Let me give you what I know, and let me tell you what I'm working on to get answers to."

I had a guy at the end of that meeting go, "Jen, I thought you were a witch. How did you know?" And I said, "Because I've been in your shoes. I know what this is like." So for me, that part of vulnerability is tying it to the business: how I felt, what I was thinking, why I as a leader now want to make sure I'm getting answers to the questions, and why we need an open feedback loop. I need to know what obstacles 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 an answer to one of your questions, call me on it. This needs to be a two-way dialogue. So I coach CEOs to be human. To me, vulnerability is just being human: anticipating the questions people have and having answers for them, or sharing that you're looking for the answers, so they can do their jobs.

Bruce EckfeldtI'm curious, and maybe you get brought in once the deal is already underway, but do you ever run into a case where you do the analysis, you know both sides, and you say, "You shouldn't do this transaction"? There's just too much cultural difference. As much as the numbers make sense and the strategic offering makes sense, culturally this is going to be a train wreck, and you should not do it. Or at least: this is going to be a big process.

Jennifer FondrevayOh, yeah.

Bruce EckfeldtIt's going to take a lot of time and energy. You need to plan for it, budget for it, put in time for it. Tell me about that.

Jennifer FondrevayThere's one that comes to mind. I'm glad you asked the question, because it's important to highlight. I think with human capital advisors, there might be a perception of, "Oh, they're just going to come in and tell us everything we're doing wrong as it relates to people."

Bruce EckfeldtYeah.

Jennifer FondrevayIn my mind, mergers and acquisitions have the potential for great success. It should be a growth strategy play that has success, where the value creation is achieved. So oftentimes I'm coming in, and even when I'm finding cultural differences, I will look for where they're aligned. These are the markers: the decision-making process, the org structure, the values piece of it, how you reward, how you communicate. With all the cultural markers, I'm looking for where you are aligned, and where there are differences that it's important for you to understand. "I think they're better at this than you are, so be open to that." And where you could actually co-create something better.

Whether it's communications, where one has a more informal communication network and the other has a more formal one. That can often be a lot of friction. I see that a lot when a larger corporation acquires a more entrepreneurial company.

But where I have had it, it was a gentleman who, frankly, was looking to acquire his father's old company, and they had had a falling out. He knew the company was struggling, and his siblings were still running the company, and he thought this could be a great way to bring things together. But I did an assessment and evaluated where the three siblings were versus what his vision was. I didn't say one way or the other. 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."

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. For me, that's where you just have to be honest, as someone doing that assessment, and say, "Here's what you would have to overcome in order for this to be successful."

Bruce EckfeldtI think that's probably the hardest thing I find as a coach. You have to have the conversation of, "Okay, look, this is what I see. This is what I think the outcome might be. Here are the ways you can try to avoid some of these things." But at the end of the day, it's your choice. Sometimes founders still make the choice to do it, and you just want to make sure they go in eyes wide open. It doesn't necessarily mean it's going to work, but at least they're going into it with the data and the insight they need.

Once you have the assessment and you understand the two organizations, do you bring specific suggestions or strategies to the table? "These things could merge well, let's move these. But this stuff, you really ought to keep separate. Let's keep this as a separate team, because they work differently and create a lot of value that way, and if you try to integrate them, it's going to kill their mojo." How much are you involved in post-merger organization design, based on understanding the teams and the desired outcomes and what's going to be the best structure for them?

Jennifer FondrevayThe role I play is mostly facilitating those discussions, but letting the leadership figure it out. Often, and maybe you've seen this as well, the org structure is just based on, "Hey, we're the acquiring company. You're being acquired. We'll open up a couple of seats, and a few people will go here." The first step I always take is to separate out who people are and ask: what is the new vision for the company? What is required to achieve that vision? What roles are needed? And then, who are the best people for those roles?

It should not be about who's from which company, and you need to go in with that mindset. If it's, "Well, this person was always head of this, so we're just going to keep them there," we have to be up front and honest that this is a new strategy, new objectives, a new vision for what the company is. The org chart should reflect what is needed to achieve that vision, not who's at what level and who has done what.

For me, that's a big part of it. I find that if I help guide that conversation and the thinking, 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, is a very popular exercise I run, called a pre-mortem. Oftentimes people ask, "How do we know if this is going to work?" So I'll say, "Okay, we've all heard of a post-mortem. The patient dies, and now let's figure out what led to that death." A pre-mortem is a variation of scenario planning. You get the leadership of both companies who are going to be part of making this successful moving forward into a room, and the operating assumption is that 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. What led to that?

It's almost a reverse SWOT analysis. You're considering, "What if a competitor actually moves faster than we expected, or a completely unexpected entrant comes into this industry?" What's fascinating to me about doing a pre-mortem is how often someone in the room says, "You know, I've been thinking about this. If such-and-such company actually comes into our category with that product, that could be devastating to our ability to do XYZ." Or the government comes out with legislation.

You can't predict everything, but the beauty of a pre-mortem is that ego is not involved. You're not blaming anyone. So people even get competitive about, "Okay, let me think of all the things that could have driven this failure." I've had CEOs say to me, "This is the closest I'll ever get to having a crystal ball." Not only do you get a view of the assumptions you made that you need to challenge, but then, when I work with teams, you identify, "Okay, if this happened, it would be devastating. Let's have a team, task someone to lead it, figure out who needs to be on it, and solution for that, so we feel prepared should it happen." So again, it's being intentional and proactive, and thinking about how we set people up for success.

Bruce EckfeldtIt's funny, I'm smiling, because I do a similar exercise within companies. Usually I'm working with a company on strategy and how they're going to scale. I'll break the senior leadership team into small groups, and we'll run an exercise I call the takedown. I tell them 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. They do it in groups, and then they come back and present their cases: "This is what we do." I tell them they can poach anyone they want. There's no non-compete.

It's amazing. "I'm going to take this person and this person, and we're going to do an AI version of this, and we're going to pilot this, and then we're going to 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 they get so stuck in their ways, or they fail to innovate, or they fail to see innovation opportunities or threats.

If you can workshop this stuff and get it on the table in a safe, fun way, now they're actually able to deal with it and say, "Okay, I see where the risk is. Either we need to 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 ideas. 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.

Jennifer FondrevaySo you and I have similar energy on why we do that exercise, because it removes ego. We're not accusing anyone of anything. You didn't drive the failure. This is a fictitious scenario. Exactly as you said, I've seen it every time I do this exercise: someone will say a variation of, "You know, I've been thinking about this. It's been gnawing at the back of my mind." Because so much of the energy is around just getting the transaction done. All of the energy is on that. You're not poking holes, asking what could make this go wrong, because so much of what you're trying to do is figure out all the ways to make it right. So it's hitting the pause button to anticipate the future. It really is a crystal ball, I think, and your exercise is the same way. It leverages people's smarts in a proactive way to say, "Okay, we need to be working on that."

Bruce EckfeldtA little competition. Competition always brings out some interesting things in people. 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 you do, what's the best way to get that?

Jennifer FondrevayI only hang out on LinkedIn. I'm not a multi-platform lady. In the show notes, there will not be seven ways you can reach me. It's my website and LinkedIn, and that's intentional, because 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 the most value. So come join me on LinkedIn or on my website, which is jenniferjfondrevay.com. I try to keep it simple.

Bruce EckfeldtExcellent. 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.

Jennifer FondrevayThank you. Really, a pleasure for me as well.