‘Takeovers are a time to knit people together rather than exclude them’

November 28, 2022

This month, Karen Thomas-Bland, founder and director of Seven Transformation and a consultant on over 50 mergers and acquisitions, discusses why Musk’s takeover needed to balance change with stability.

She recently wrote for Management Today on how to manage personal egos in a takeover, specifically focusing on Musk and Twitter.

Elon Musk has wasted no time in signalling big and bold changes at Twitter. The clear-out of the board and senior leadership and a rapid and significant reduction of headcount has courted heavy criticism for reportedly not following due process and for the ruthless way it was done. The reported demands to sign up to a “hardcore” culture of working “long hours at high intensity” and the abrupt closure of offices have led to a media storm and reports of users leaving in droves.

Signalling bold change at the start of a takeover can be a good thing. It signals to everybody – employees, customers, and the market – that you have an ambitious plan, and you are not afraid to execute it. But, so far, the approach of a big picture vision that is light in implementation design hasn’t translated well to Twitter. A clear and coherent strategy is needed. In this case, a lack of clarity about the strategy and how key parts appear to be changing, such as the “blue ticks” verification system, is inevitably creating uncertainty and eroding trust.

Any change needs to be sequenced, communicated, and well-managed. The scattergun approach where a leader will “try everything and see what sticks” is counter to what I have seen succeed when making change work. Employees will quickly lose confidence and look for opportunities elsewhere.

In any takeover context is everything and it’s important to flex your leadership style according to the current culture and the one you want to create. People need the ‘why?’ and then an opportunity to input into changes. It’s important to give those people closest to the customer a voice through two-way communication and engagement. The most successful takeovers have full buy-in from all parties. This includes not only the owners and shareholders, but employees and customers.

Nothing brings out inflated egos more in business than a takeover. A well-developed ego is, of course, needed to make a takeover happen in the first place – it requires a brave and bold move. But that well-developed ego that is required to make a major deal happen needs to be safely contained to make the strategy work.

My experience of leading and advising on many takeovers is you need to find symbols of change whilst maintaining some sense of stability. You need to be prepared to work at high intensity and set expectations, but ultimatums rarely work, and you often disenfranchise the people you really want to keep.

“The best people are staying, so I’m not super worried,” Musk tweeted. But endings also have a deep symbolic resonance with the people who stay. When exits are ignored, or worse, those departing are treated badly, it signals to the remaining employees that they too are unimportant. This can result in lost motivation and effort, which damages collaboration, productivity, and performance. Takeovers are a time to knit people together rather than exclude them. In my experience, you get this wrong at your peril.