Case Study 7: Mergers and Acquisitions
The Blue Note in Napa is buzzing with energy as it plans to host a standout performance by the talented Eric Darius. Known for his electrifying saxophone style, Eric draws inspiration from jazz legend and role model Miles Davis, whose groundbreaking artistry has blended genres and captivated audiences. The décor celebrates music and Napa’s culture, with walls covered in music paper, vintage vinyl records, wine cork accents and instruments that evoke the spirit of harmony.
Julie, CFO, Danielle, CMO and Ken, CRO are celebrating Ken’s birthday as you approach the high bar stools.
“Don’t blame the CRO,” Danielle says, smiling at Ken. “Generally, CRO’s need time to integrate acquisitions to be able to cross-sell.”
Julie laughs. “You two are like brothers, using each other’s lines. But seriously, we didn’t put aside any money for integration work because both of you said it wasn’t a big deal. Now it is hitting our profit margins. What needs to change?”
You laugh. “It’s so great to see you talking about change.”
Danielle smiles at you. “We have a Crawl->Walk->Run framework we’ll show you.”
You smile back, lifting your glass. “Happy Birthday, Ken! The cheese will keep moving on you as you acquire more companies.”
Ken laughs. “We need to talk to the board and agree that funding for M&As including deal costs, due diligence, and integration costs should be categorized as non-operating expenses and exclude them from ongoing profitability metrics.”
Julie takes a sip of her sparkling water. “Yes, for the next acquisition. Now we have to segregate remaining M&A costs, isolate the impact of the last M&A and clarify operational performance.”
Ken looks excited. “The TL;DR is we have to get out of Denial in the DABDA model.”
Julie and you smile.
Julie nods. “We can start with Nvidia and research their M&A reporting. They’ve acquired quite a few startups. I’ll look at their public statements and get an AI transcript of their last investor call.”
Danielle chimes in. “We need to re-think the integration approach and get funding for one-time burst capacity from consultants. There is going to be a lot of data migration.”
Julie smiles. “Happy Birthday, Ken. I just need to know: In what quarter will you be able to automate cross-selling? Show me the money!”
Danielle smiles. “We’re getting a lot of resistance from middle managers. We need to communicate more often and reward role modelship. I’d rate us at only 25% on role modelship as a leadership team.”
How do you coach post this meeting, leveraging change management and role modelship frameworks?
You look at your HeroMash watch. Albert Einstein would have said that we cannot solve our problems with the same thinking we used when we created them.
You are Marie. How would you encourage and coach Ken (CRO), Danielle (CMO) and Julie (CFO) to channel their best role models to demo balance between AI strategy and human capital strategy?