What role does middle management play in a successful M&A deal?

How can middle managers help a business complete a deal successfully?

There are many ways in which middle managers’ talents can come into play when completing a merger or acquisition deal.

Leaders in middle management roles can provide input into strategy at the early stages of a deal and can contribute sound judgment to the process, providing they are consulted at the right stage. Middle managers may be able to provide one or all of the three leadership qualities considered by the Conference Board, to result in successful deals: Inspiring trust, listening to others and effective communication.

Middle managers may be able to engage more effectively with people at all levels, from board level to the shop floor or equivalent. Leading teams and facilitating teamwork are the two main leadership skills required at all stages of the deal process, according to the researchers and, again, middle managers can often offer these skills above and beyond senior management.

Middle managers are indispensable following an acquisition or merger when a new team of employees has to be integrated with an existing team.

With reference to this last point, researchers at McKinsey have highlighted the need for effective leadership being a key factor in whether a deal can be deemed successful from an integration point of view.

McKinsey says there are three main leadership cohorts that need to be acknowledged when doing a deal. The first includes the ‘top-level leaders’, i.e. the CEO and his/her direct reports. However, from a middle management perspective, the second two cohorts are more interesting: the ‘integration leaders’ and ‘broader NewCo leadership team’.

“The integration leaders must learn how to manage integration planning to realise the greatest value from the deal and how to quickly mobilise teams that combine people from two different companies and span all functions and business units,” explain the McKinsey researchers. They add that the latter cohort “must lead integration execution and take the combined company, which is often establishing a fundamentally different culture or operating model, into a new era of higher performance.” These are clearly middle management roles and businesses hoping to make a success of integration need to appreciate and understand these crucial roles to succeed.

It will be interesting to track the progress of a recently announced deal between two Scottish companies. Subsea engineering firm Acteon is buying Proserv’s international Field Technology Services and Survey business units. This will result in a total of 177 Proserv staff being integrated into the Acteon business following the completion of the transaction.

Richard Higham, the CEO of Acteon stated: “This is a fantastic opportunity to join two complementary businesses together.” The influx of staff will have to integrate with Acteon’s existing Aberdeen-based operations, which already employs some 350 staff - no mean feat.

There’s no reason why the deal can’t prove successful, so long as Acteon takes an intelligent approach to utilising middle managers to ease the transition. The latest information suggests that Acteon are indeed on board with this game plan and are intending to bring across all the senior and middle managers from Proserv, despite the temptation to cut staff costs.

Although involving middle managers in a merger or acquisition is no magic potion for a fool-proof deal and post-deal process, leaving them out altogether is likely to result in a poor result. After all, middle managers have the ear of those above and below them on the pay grade and it is within their interests to help facilitate a happy transition post-deal.

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