Michael’s M&A Playbook: After-Action Reviews in M&A
Continuous improvement is a fundamental concept many companies have applied for decades to learn from past problems. You can use various methods to implement it, such as Kaizen or Lean Six Sigma. In its simplest form, companies use a lessons-learned process. Another helpful tool that facilitates this process is the After-Action Review (AAR).
AARs were initially developed by the U.S. Army in the 1970s and provide a structured approach for analyzing past actions, processes, and outcomes. Companies were quick to use this approach because of its simplicity and effectiveness, and you can find many publications about AARs and their application in the business world. By encouraging open discussions and fostering a learning culture, AARs enable individuals and teams to identify their strengths, uncover issues and areas for improvement, and drive actions to achieve future success. This article will explore the importance of AARs, their benefits, and how companies can effectively implement them in M&A.
How to Conduct an Effective AAR
AARs follow four basic questions:
Intended outcome: What did we intend to accomplish?
Actual result: What did we do, and what actually happened?
Understanding the actual result: Why did it happen that way?
Improvement actions: What and how can we improve?
Looks simple? It is, which is the reason why many companies started implementing it. To get the full benefits of AARs, conducting them effectively is crucial. Here are some critical steps and tips.
Set clear objectives. Before conducting an AAR, establish the specific objectives and goals you hope to achieve. It will help guide the discussion and ensure that everyone stays on track.
Gather input from all participants. Including all relevant stakeholders in the AAR process is essential, from team members to supervisors. Each person will have a unique perspective and valuable insights to contribute.
Focus on facts and data. AARs should focus on objective data and measurable outcomes rather than subjective opinions. It will help you identify concrete areas for improvement and make data-driven decisions.
Encourage open, honest communication. AARs are most effective when everyone feels comfortable sharing their thoughts and feedback. Create a safe space where people can express their opinions without fear of reprisal. Consider whether to make some of the comments confidential to the team. It supports open discussions.
Assign action items. Once you've identified specific areas for improvement, assign action items to individuals or teams. Follow up on these action items in subsequent AARs to track progress and ensure accountability.
The Key Benefits of AARs
Let’s look at the advantages of AARs. One of the main benefits of AARs is that they help businesses make better decisions. They promote a learning culture. By reflecting on past projects or initiatives, companies can identify what worked well and what didn't and use that information to inform future decisions. It increases the chances of success for future endeavors and helps businesses avoid making the same mistakes twice.
Another benefit of AARs is that they promote collaboration within a team. By bringing together individuals who played different roles in a project, AARs encourage open communication and foster a spirit of partnership, leading to improved relationships and more effective teamwork.
AARs also provide valuable learning and growth opportunities for employees. By reflecting on past successes and failures, employees can gain insights into their strengths and weaknesses and identify areas where they can improve. This helps individuals grow and develop professionally and can lead to a more skilled and talented workforce overall.
Accountability for outcomes is crucial in businesses, and AARs enable individuals and teams to take ownership of their actions. By encouraging self-reflection and identifying areas for improvement, AARs help build a sense of responsibility among team members.
Overall, the key benefits of AARs are improved decision-making, better collaboration, and enhanced learning and growth opportunities for employees. By leveraging the power of AARs, businesses can make meaningful improvements step-by-step that will help them achieve their goals and drive success in the future.
After-Action Reviews in M&A
If you consider M&A one of the many tools management has available to achieve the company's long-term goals, it is clear that AARs are also an excellent tool to improve your M&A results. Following the outline above, here are some tips.
Align the approach for M&A with your company's person or team responsible for AARs in your company. In many companies, this is the PMO (Project Management Office). In most cases, you can use the same processes and templates. Adjust them to the M&A process if needed.
Include AARs in your M&A process document and formalize their use. Be consistent and make participation mandatory. AARs should become a standard step in your M&A process, not an exceptional one.
Like with AARs in general, focus on opportunities. Stop finger-pointing and work on plans to improve results. Underline the aspect of forward-looking actions for your next M&A transactions.
Discuss all five steps of the M&A process, not only the time after the closing. Ensure that you involve pre- and post-closing teams in the reviews.
Document the analysis and findings in an AAR report, including benchmarks to other M&A processes inside and outside your company. Understanding whether you improve step-by-step and how other companies perform is essential.
AARs Can be a Game-Changer
Incorporating AARs into your M&A operations can be a game-changer. These reviews provide valuable insights that can improve your M&A results, promote a culture of continuous learning and growth, and identify areas for improvement. By conducting AARs effectively, you can take your M&A approach and operational process to the next level. Remember, reflection is not just a one-time event but a continuous process that helps your business succeed.
