by Paul T. Cottey

There’s a new sheriff in town

Jan 28, 2019
C-SuiteCFOMergers and Acquisitions

The challenge as a senior IT leader in an M&A situation is that the new operating rules are unlikely to be communicated clearly, if they are even communicated at all.

“Novus rex.  Nova lex.” —Proverb

Translation: “New king. New law.” Or, more colloquially, “There’s a new sheriff in town.”

I do a lot of merger and acquisition work as part of my job.  It could be a “simple” change in ownership, a combination of two or more companies, or a carve out of a portion of a company from its parent.  Regardless of the specifics of the transaction, the outcome is that there is likely a different management focus (“Novus rex”) and therefore a different set of rules to learn and operate under (“Nova lex”).

The challenge as a senior IT leader in an M&A situation is that the new operating rules are unlikely to be communicated clearly, if they are even communicated at all.

Some of the most significant “new rules” I have experienced are:

Management Style

Every company has a management style.  Some styles are collaborative.  Some styles are personality-based.  The existing style may effective or ineffective.  It may be fast or deliberative.  It may be top-down or consensus-focused.  You get the point.  What is consistent across transactions is that the current style is going to come under pressure to change.  There will be new people who need to be included in discussions and who need to sign off.  There will be more focus on making fact-based decisions.  There will be a change in pace either to be faster, if the pace was too slow, or slower, if the pace was too radical.

Your job as the senior-most IT leader is to understand the new management style to get the decisions made that you need in order to get done what you promised.

Capital versus cash…or Capex versus Opex

Before a transaction, you knew what to do around Capex and Opex.  Now you need to figure out whether that is still the right thing to do.  For example, if you were typically cash-poor, you may have been forced to use a “pay as you go” model.  This may have kept you from being able to negotiate a discount for a longer term because you needed the flexibility.  If the transaction has freed up cash or capital, you may be able to move to a deal structure more in line with your longer-term plans.  Your CFO is your best friend in understanding the new approach to Capex versus Opex since he/she is likely intimately involved in determining that new approach.

Vendor leverage

You may not be aware of it at first, but if you have merged with another company, you may have more leverage with your vendors because you have more volume.  You need to be prepared to use that leverage.  Conversely, if you were carved out of a parent organization, you may be surprised to find that your vendors are not paying as much attention to you as they used to.  In that case, you need to consider whether they will come around or whether you need to be looking for alternatives.

Expectations of formality

Your previous boss may have been happy with informal updates.  Your new boss may like formal updates with informal follow ups.  Or your new Board may expect a different cadence from you.  Whereas you may survive a false start with your vendor leverage, you need to get your boss and Board communication right the first time.  Ask your boss for guidance.  When in doubt, volunteer to present the “IT story” before you get “volun-told” to do so.  You’ll be much happening doing it on your schedule.


In the same way that you are feeling like you have a new boss, so do all your people.  You may think “you are still you,” but you are different as well.  The change in your boss(s)’ management style will have caused you to change yours.  Spending more time with your CFO and with your vendors will cause you to spend less time with your IT team.  The changing expectations around formality will necessarily have cascaded throughout your Support, Operations, Implementation, Infrastructure, etc. teams.  You will need to communicate more, not less, using all the channels you have including Town Halls, emails, MBWA, newsletters, and so on.

The new rules can be difficult to determine, but once you do, you may even find time to be able to write a blog post with a Latin proverb as its theme.