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September 19, 2017

How Empathy Makes Mergers and Acquisitions Successful

“This is the first time I’ve been acquired by a company that felt like it had a soul.”

That comment was music to the ears of John Derusso after he led a successful integration for Cisco Systems, where he’s been the director of corporate development and integration since 2013.

Derusso tells DealRoom that it’s vitally important for the employees of an acquired company to feel comfortable. As the one orchestrating the process, he says you need to mitigate their fear, uncertainty, and doubt. So, while you’re taking care of all the details of the deal, you must take care of people through change management.

Why are some acquisitions successful while others aren’t? John points to two overarching reasons: strategy and execution. Sometimes the deal is executed perfectly, but if the market evaporates, the acquisition will falter. Other times, the strategy may be perfect, but issues arise during execution, such as resistance from people, or a difference in technology.

That’s why John feels it’s crucial to consider people from the start. Ask yourself, “Who are they? What is their culture? What do people mean to you as the acquirer?”

Listen to the podcast to learn more from John Derusso, including the critical role of the governance team after a deal is done.

If you associate people with cost, you will act one way. If you think of people as the “wellspring of innovation,” you will act a different way.

John believes you must remember that employees of an acquired company experience shock. As an integration lead, it’s critical to communicate with the acquired company’s leaders to say, “This is our game plan as it relates to people.”

Throughout the process, John highlights the importance of empathy. If you want to be a successful integration leader, “Project yourself into their circumstance and feel what they’re feeling in a genuine way.” This is not only the case with employees, but holds true for shareholders, customers, and business partners. He warns of becoming too internally focused during an acquisition, and stresses the need to be transparent with the acquired company’s leadership team.

According to Derusso, it’s critically important to literally practice being empathetic. Put yourself in some else’s shoes—see the world as they see it. You need to be able to bring  people with different points of view together. He says, “Achieving common ground is essential. If you don't have common ground, you don’t have integration.”

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