White House

Analysis

The presidential transition

Translating lessons from mergers and acquisitions

The scale of a presidential transition is staggering. More than 4,000 political appointees will resign as of January 20, 2017. It’s a large-scale, critical, yet infrequently occurring event, so we turned to the commercial world for new insights on managing a presidential transition. CEO transitions in the private sector occur much more often than every four or eight years.​

Download the roadmap on presidential transitions

We interviewed experts who advise, facilitate, and manage M&A transactions and post-merger integration as well as with those who have advised or experienced presidential and other government transitions. We discovered some striking similarities. Civil servants, transition team participants, and incoming political appointees may benefit from the translation of important lessons from the hundreds of M&A transactions that have occurred.​

Back to top

Nine key lessons from mergers & acquisitions

Start with the end in mind

Knowing what you hope to achieve allows each party to focus on what matters most. This clarity can provide strategic principles and guardrails to guide discussions and actions, discouraging the urge to catalogue or communicate everything in an attempt to be comprehensive. Not every organization and situation is the same, so be prepared to tailor interactions and triage the scope of inquiry.

Assess yourself from the “outside in”

Honestly and objectively assess the performance and alignment of existing priorities, programs, and initiatives from the perspective of the other participants. Link your story of the path forward to leadership’s future vision to shape your message. Highlight points of agreement while clarifying and refining points of disagreement.

Establish leadership and accountability

Identify ways to ensure continuity from due diligence to post-merger integration with executive and functional leadership. Establish clear roles, responsibilities, and accountability when it comes to integrating new personnel and new strategic priorities. Early interactions can be critical in establishing credibility and trust.

Control the integration

Dedicate a full-time transition leader and integration process owners with clear authority and accountability. Launch small, rapid, iterative transition teams–quick wins matter. Ensure you maintain the implementation discipline over time.

Plan for an issue-free day one

The highly scrutinized first days of new leadership are critical in establishing relationships, trust, and credibility. Avoid “flashpoints”, the issues or events that carry disproportionate risk, and develop a mitigation plan. This avoids wasting time, energy, social capital, and focus to get back on track.

Expand and front load benefit capture

Develop detailed top-down benefits estimates and establish baselines for each Department/Functional team and constituent benefits. To do so requires clear identification of the most important programs and initiatives as well as the character and sources of efficiency gains and new value creation. Establish milestones and commitments against defined value drivers.

Provide clear and consistent communications

Identify key messages and stakeholders and use well defined touchpoints to deliver a consistent communication campaign. The more clarity on the strategic agenda and priorities, the better. Don’t feel that everything needs to be in place before sharing information that will help employees build confidence and trust. Emphasize two-way communication.

Stabilize workforce and retain critical talent

Workforce support will be essential to the successful execution of change. Identify and retain key talent early. Motivation and engagement will often benefit from identifying and tapping into the intrinsic values that drive employees’ commitment. Build morale and avoid the exodus of essential institutional knowledge.

Coordinate complexity without disruption

Set timeline for actions, and define governance (decision rights) for integration and ongoing operations. Set a weekly cadence for tracking and monitoring with synchronized integration plans, but be prepared to adjust–implementation needs to be a highly adaptive process.


Back to top

Business meets government

The notion that business practices have useful application to government is not new. Translating lessons from the business world for the benefit of government can be beneficial—especially in any situation where leaders new to government service come with a business background. Identifying and deploying commercial insights successfully often requires a degree of “bilingualism”: the ability to translate business to government and vice versa. This translation capability is built on experience and understanding of the context, mechanics, issues, language, and perspective of both sectors.

The translation of business insights to government application can begin immediately with the presidential transition. The transition to a new administration is unique. Up to 4,000 new political appointees will assume leadership of a $4 trillion annual enterprise comprising hundreds of agencies, including seven that, in terms of budget, would rank among the 50 largest companies in the Fortune 500. Imagine the senior leadership of dozens of companies being replaced at the same time. The complexities involved would be tremendous, posing potentially serious risks to the companies as well as the economy as a whole. And further imagine that many of the new corporate leaders have never handled such responsibilities before. Now you have a sense what a presidential transition typically involves.

For those leading a transition, whether for the government as a whole or within a particular agency, the tasks can seem daunting. For many, it may be their first such experience; we’ve had only two new presidents since 2001. In the private sector, by contrast, CEO transitions occur much more often and companies are frequently undergoing drastic changes through merger and acquisition (M&A) activity. The scale of individual M&A transactions is not as great, but their greater frequency has offered a greater opportunity for learning. And this begs the question: What can those involved in a presidential transition learn from mergers and acquisitions, both the successful and the not-so-successful? A lot.

Our interviews with experts who advise, facilitate, and manage M&A transactions and post-merger integration (i.e., activities in the months following the merger), as well as with those who have advised or experienced government transitions, suggest some striking similarities. Civil servants, transition team participants, and incoming political appointees may benefit from the translation of important lessons from the hundreds of M&A transactions that have occurred.​

Back to top

Puzzle

Infographic: The parallel structure of typical M&A and presidential transition programs

Did you find this useful?