Open Introduction: What Causes Post-Close Confusion?

INTRODUCTION: WHAT CAUSES POST-CLOSE CONFUSION?

Investors ask a lot of management teams during an add-on process.

I mean that literally. 

Every new investment we consider means a long list of to-do’s that helps us get smarter on everything from internal finances to how the product works to which customers matter the most to the health and growth profile of the company’s market. Each item on that to-do list requires multiple pieces of data of information requests. By the time we finish our diligence, the company’s “data room” can contain thousands of pages and gigabytes of information.  

So who gathers all this data? Well, we do some of it, but most of it comes from the management team. It’s a ton of work. Consolidating, organizing, and presenting this information isn’t just intellectually taxing. It takes a real physical toll on the management team, who essentially work two jobs during diligence: As members of the company’s “deal team”, they respond to inves

Open 4 Principles

4 PRINCIPLES

I’ll admit, we’re just like other investors – we get excited about closing a new deal, and we can be guilty of taking a breath and letting our guard down once diligence wraps up. 

But we also recognize the urgency and importance that the post-close window represents. It just might be one of the most important opportunities there is to create clarity and momentum for the organization and its people. That’s why we created a change management process, grounded in the power of storytelling, to help us make the most of what we learn during diligence, focus the team on what matters most, and help the company avoid getting bogged down in the confusion and misalignment that, too often, is a fact of life when two organizations become one. 

Our approach is based on four principles – four disciplines that we ask our management teams to consider and operationalize as they wrap up the diligence process and set to work on running the business as a new chapter begi

Open Formal vs. Informal

FORMAL VS. INFORMAL

When we first teach our portfolio leaders how to be Chief Reminding Officers, I start by asking them to tell me about how they communicate with their team. 

I always hear the same thing. 

Most executives spend the majority of their time thinking about formal communication channels – the town halls, company newsletters, and other structured opportunities they use to broadcast information. 

While formal communication channels are important, they have two major disadvantages: They happen infrequently, and they are one-way. There are only so many town halls to script and all-company emails to copy-edit. And these ways of communicating can only do so much. They simply inform – they don’t create dialogue. 

Informal communication opportunities - impromptu discussions during meetings, 1:1s, and hallway (or these days, Zoom) conversations - happen much more often. The problem is, leaders worry too much about using these channels to reinforce co

Open Repeat, Repeat, Repeat

REPEAT, REPEAT, REPEAT

The research all agrees. 

People have to hear things multiple times before they stick.

Dan Coyle, in his fantastic book The Culture Code, cites an Inc. Magazine study where only 2% of people could name a company's top 3 priorities. Executives expected the number to be much higher, implicitly giving themselves credit for higher quality co

Open Everyone Is a Chief Reminding Officer

EVERYONE IS A CHIEF REMINDING OFFICER

Every member of the leadership team needs to accept the responsibility of relentlessly reminding the organization – over and over again – of where they’re headed, and how they plan to get there. This "Chief Reminding Officer" mindset shift works best when the CEO gives formal permission to each member of their team to communicate often and informally with their teams, in their own authentic voice.

Leaders armed with this explicit trust and permission can now focus on building what Dan Coyle, author of The Culture Code, calls “High-Purpose Environments”, which are less “about tapping into some mystical internal drive but rather about creating simple beacons that focus attention and engagement on the shared goal. Successful cultures do this by relentlessly seeking ways to tell and retell their story.”[4] 

Clarifying what story to tell – and breaking it down into digestible pieces so everyone feels armed and confident in tell

Open What's The Story With This Deal?

THE BALANCING ACT

Creating the right story – a single cohesive narrative that provides clarity and context around the change to come - is a difficult balancing act.

On the one hand, the audience needs enough context to know what’s going on. On the other, you want the story to be streamlined, simple, and digestible. You need to pare the story down to its core. What you’re going for is what pharmaceutical industry execs call the “minimum effective dose” – enough detail so people “get it” without the confusing, superfluous fluff.  

So how do you decide what to include, and what to leave out?

Open There Are Two Sides To Every Story

TWO SIDES TO EVERY STORY

Asking a single executive, even the CEO, to distill all of the information that goes into doing a deal is misguided. 

It’s too hard, and too limiting. 

There’s an old saying that goes, “You don’t see with your eyes, you see things through your eyes.” That’s to say, we tend to pay most attention to the things that we understand, and the things that resonate with us. Similarly, any single executive is likely to gravitate towards the part of the information pile that’s easiest for them to interpret. The CTO leans into the tech diligence findings. The CFO remembers the financials. The CHRO memorizes the organizational chart. This dynamic can work for or against you: By farming out communications duties to one executive, you can expect a slightly biased narrative that often misses details that might be critical for other teams. But by leveraging multiple sets of eyes and ears, you can create a powerful, crowdsourced machine that picks out th

Open Why This Works

WHY THIS WORKS

This co-creative approach takes a little more work. You need to schedule several hours for the workshop, give the “storytellers” time to prepare some notes, and give the rest of the attendees some tools to capture what they’re hearing. But the extra effort is well worth it. Here’s why.

First, this process forces a meeting of the minds. It helps leaders to not only hear, but personally invest in the story – a story that each of them helps to co-create. Leaders that are able to weigh in on each piece of the story are more likely to buy in on reinforcing it when it counts, even if their edits don’t make the final cut.

Second, it leads to crisper, tighter communication. As part of our storytelling workshop, we explicitly ask for input from everyone, leveraging the group’s eyes and ears to hone in on the key messages that hit on the organization’s most important hopes and concerns. Different teams, different offices all have different question

Open Let's Get Visual

LET'S GET VISUAL

We spend the last hour of our storytelling workshops sharing and summarizing our notes in a process not unlike starting a giant jigsaw puzzle: We spill the contents of our notes onto the table and talk about the clusters of ideas, messages, and stories that naturally clump together.

Using these, we create what Joseph McCormack, author of the fantastic book Brief calls a narrative map. A narrative map simply and visually diagrams the flow of a story from beginning to end. Mr. McCormack is quick to point out that narrative maps aren’t an attempt to over-dramatize what’s going on inside the company. 

“We’re not talking about “Once upon a time” here. We’re talking about a corporate narrative that explains the why, how, who, when, where, and so what.”[6]

When it’s done, the output looks like this: A single page that provides a step-by-step executive summary that every leader understands and feels confident in delivering, whether they need to tell

Open Find Yourself Some Sponsors

FIND YOURSELF SOME SPONSORS

We often tell leaders in the midst of changing things in their organization that they “don’t have to do it alone.” After assembling and framing the details of what’s happening and why, we work with the leadership team to pick out a small group of people in the organization to help them polish, amplify, and reinforce the story for the rest of the team.  

First, we hold a formal enrollment session with this “next level down” group. The session is designed to accomplish three goals:

• Formally enroll the group into the “inner circle” of the upcoming change. We spend about half of this initial session telling the group about the process we used to select them and bring them in. As Dr. Edmondson says, “A critical feature of enrollment is communicating to others that they are being specifically selected for a project or role.”[7] This important step also draws on the influence tactic of consistency: If we’re inviting you in to this spe

Open Get People Working On Stuff Together

GET PEOPLE WORKING ON STUFF TOGETHER

Here’s the simplest formula in the world for integrating two cultures: 

Get people working on stuff together. 

An important note for mergers/integrations: If at all possible, it’s important to invite players from “both sides” to these sponsorship sessions.  

In a recent example of a portfolio company integration, we broke our sponsorship work into two separate sessions. In our first session, multiple members of the executive team (including the CEO) presented a version of our integration narrative map, taking care to share some of their own personal takes on the upcoming integration and what it meant for them personally. Then we broke the group down into smaller clusters and asked for their reactions, focusing on:  

• What were they most excited about?

• What were the risks and blind spots that leaders (and they themselves) should be thinking about over the next few months?

• What would be most important to

Open Don't Forget What We're Going For

DON'T FORGET WHAT WE'RE GOING FOR

We’re trying to accomplish a few key goals during these sponsorship sessions.

First, we’re following up on the initial broadcast of information with a more intimate two-way dialogue. By reinforcing and building on the message that was just shared, we always find (through both observation and more formal measurement) that the number of people inside the company who “get it” increases.

But the benefit of these smaller, more focused sponsorship sessions isn’t just a larger number of informed employees. Sponsors also help executives do what matters most in a significant change effort: Manage the risks.

The idea of managing risk during change is near and dear to our hearts here at ParkerGale. Our team has years of collective experience working on post-merger integrations during our time in strategy consulting, where we always built in work focused on surfacing, measuring, and mitigating risks.

There’s a reason for this. Bai

Open What's The Big Idea?

WHAT'S THE BIG IDEA?

Ever worked on an integration?

Every consulting company will tell you their approach is the best.

But here’s a secret from a recovering Bain consultant: We all use more or less the same technique.

Each functional leader comes up with a list of to-dos, the consultant puts them all into a big combined spreadsheet, and then the team checks in every week to make sure that things get done. The “integration list” approach is simple, but it works. Pulling up the to-do list, reporting out on progress, and surfacing problems is a great way to ensure that things get done.

But in checking off dozens of individual tasks each week, it’s easy to start seeing the world with project management blinders on. A few months in, it’s common for executives to leave an Integration Management Office meeting and think to themselves:

“What is this all for again?”

As any integration drags on, it’s easy to get a little lost in the weekly grind of m

Open Get Your Story Straight

GET YOUR STORY STRAIGHT

Some executives view communicating with employees as an act of good will: A philanthropic burden that accompanies their ascension to the leadership team. They’re wrong.

Communicating well internally isn’t just about the courtesy of keeping people in the loop. Done well, it’s also a powerful lever to meaningfully improve performance. 

As Ben Horowitz says, “Companies get results when everyone is on the same page and everyone is improving.” Those two goals are interconnected, and effective storytelling, as Dan Coyle writes in the Culture Code, is the discipline that binds them together:

 “We tend to use the word story casually, as if stories and narratives were ephemeral decorations for some unchanging underlying reality. The deeper neurological truth is that stories do not cloak reality but create it, triggering cascades of perception and motivation. The proof is in brain scans: When we hear a fact, a few isolated areas of our brain

Open References + Inspiration

REFERENCES AND INSPIRATION

[1] https://hbr.org/2016/05/so-many-ma-deals-fail-because-companies-overlook-this-simple-strategy

[2] Pat Lencioni, The Advantage, pg 198

[3] Sam Altman, High Growth Handbook, pg 108

[4] Dan Coyle, The Culture Code, pg. 180

[5] Amy Edmondson, Teaming

[6] Joseph McCormack, Brief, pg 179

[7] Amy Edmondson, Teaming

[8] Dan Coyle, The Culture Code

Open About The Author

ABOUT THE AUTHOR

Paul Stansik is a General Partner at ParkerGale Capital, a small, Chicago-based private equity fund that invests in founder-owned B2B technology businesses. Paul runs ParkerGale’s Growth practice, and spends most of his time at work helping ParkerGale’s portfolio companies build high-performing sales, marketing, and executive teams. 

Paul publishes his writing on Substack and LinkedIn, and also contributes regularly to the Private Equity Funcast, ParkerGale’s in-house podcast which focuses on all things PE and business-building. Prior to ParkerGale, Paul worked at Bain & Co., where he led consulting engagements across multiple industries and launched Bain’s Leadership practice. Before Bain, he held a variety of sales and operational positions in the financial a