Posted: 21 Jan. 2020 5 min. read

Upping your mergers and acquisitions game with network analysis

Posted by Tiffany McDowellAmi Louise RichIndia MulladyKate HipwellDany Rifkin, and Sonia Singh on January 21, 2020.

If you’ve ever found yourself navigating a major acquisition or divestiture, you know there is a long road of unknowns—a winding path of critical decisions that rarely feel like they’re made based on complete, quality data. This only becomes more apparent when thinking about the organization—how it’s structured and led, how to retain and engage key employees, and how work will get done in the short and the long term.

Enter Adaptable Organization Network Analysis (AONA), an approach to network analysis, which provides insight into the “white space” of an organization, how information flows and how work really gets done day-to-day. AONA uses data science and social network theory to identify informal communities, knowledge brokers, problem solvers, and influencers in a group of employees. The data can be collected via a tailored survey or using available metadata (e.g. anonymized collaboration patterns in email data).

Throughout the deal cycle, AONA can be leveraged to minimize deal risk, enhance the future organization’s effectiveness, and help ensure the right people are in the right roles to facilitate organizational change.

Pre-close

When designing the operating model of newly combined or soon-to-be separated organizations, AONA insights can prove beneficial in understanding where there are natural integration synergies and where separating teams would have an amplified impact.

AONA can help leaders understand how communities operate—collaborate closely or infrequently?

 

Are knowledge and decisions brokered in the same way across merging business units? Is one organization highly siloed and hierarchical while the other appears flat and collaborative? Are there critical team members whose absence would fundamentally hinder work getting done?

Selecting future state leadership teams and conducting retention planning can also be accelerated by network analysis.

Selecting future state leadership teams and conducting retention planning can also be accelerated by network analysis. AONA helps to identify which individuals are serving as critical connection points in their organizations, making key decisions, enabling cross-functional collaboration, and wielding disproportionate significance within their teams and environments (see Figure 2 for an example). These important individuals aren’t typically executives; there may be influential individuals embedded deep in the organization who should be considered in retention planning.

Post-close

AONA can also support leaders with the post-close transition. Conducting a network analysis once the organization is operating in its interim state can expose collaboration patterns and diagnose areas where the operating model is not functioning as designed. This input can support subsequent action planning in an effort to close the gap between the interim and target state, and track the effectiveness of those interventions.

Throughout the integration or stabilization of the new organization(s), AONA can help take the guesswork out of identifying the most influential people in the new network to propel communication, culture, and change management efforts (see Figure 3 for an example). At any level, effective change agents are those with a large reach through the organization and ability to touch a significant population either directly or indirectly through their own networks.

The “new normal” arrives

The big bang of the Day 1 organization may be behind you, but the work of future-proofing does not end there. Re-evaluate your organization with AONA and see how things are really coming together. Were the expected results of the deal achieved? Were planned synergies captured? Are employees from different legacy companies actually working together? Are individuals organized around delivering a mission? Value realization and workforce optimization can take years, and network analysis can inform those efforts on an ongoing basis to make sure that opportunities are not lost due to lack of visibility.

Whether you are in the pre-close planning or deal optimization phase, or somewhere in between, AONA can provide data-driven insights to help increase your team’s confidence in decisions made throughout a deal.

We gratefully acknowledge Kirsten Fiss for her contributions to this piece.


Authors

Tiffany McDowell is a principal who leads Deloitte Consulting LLP’s Organization Strategies market offering, with a focus on delivering operating model, organization design, talent strategies,
and global change management solutions for large-scale transformations.

Ami Louise Rich is a principal in the Merger, Acquisition, and Restructuring practice of Deloitte Consulting LLP with experience across human capital including strategic change, workforce transition, organization design, and training development and delivery.

India Mulladyis a senior manager in Deloitte Consulting LLP’s Human Capital practice, with a focus on organization strategies and helping clients design and create more adaptable organizations.

Kate Hipwellis a senior manager in Deloitte Consulting LLP’s Mergers, Acquisitions, and Restructuring practice, with a focus on human capital issues in M&A, including organization design, change management, and culture integration.

Dany Rifkin is a senior consultant in Deloitte Consulting LLP’s Human Capital practice, with a focus on workforce strategy and adaptable organization design in both M&A and non-M&A environments.

Sonia Singh is a senior consultant in Deloitte Consulting LLP’s Human Capital practice, with a focus on operating model and organization design transformations.

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Ami Louise Rich

Ami Louise Rich

Principal, M&A Consultative Services

Ami is a principal in the Merger, Acquisition, and Restructuring practice within Deloitte Consulting LLP. She has more than twenty years of professional experience, including significant practice advising and working with senior executives to drive shareholder value through their human capital, across the lifecycle of transactions. She has successfully led efforts in operating model and organization structure design, culture transformation, strategic change, and workforce transition across multiple industries and dozens of deals. Ami has an MBA from Kenan-Flagler Business School and a BSM from Pepperdine University.

Tiffany McDowell, PhD

Tiffany McDowell, PhD

Principal | Deloitte Consulting LLP

Tiffany is a principal in Human Capital and serves as the national leader for Deloitte’s Organization Strategies practice. Tiffany has more than 16 years of business and consulting experience, delivering operating model, organization design, and talent strategies. She is a forerunner in delivering Organizational Network Analysis insights to clients. She holds a Master of Business Administration and a doctorate in industrial/organizational psychology.