The Failed MBO
The two owners of a company wanted to sell some of their shares to their staff. In part this would release capital for them; in part it would allow them gradually to pull back into retirement; in part it would pass on ownership to the next generation and, as they fondly hoped, in part it would reward and motivate their key staff. They set a valuation, and presented their proposition to the staff. To their amazement it was rejected, their motives were criticised, and key staff left. Morale nose-dived. It was only after subsequent careful discussions that they started to understand the hitherto unappreciated perceptions of the staff.
- Most saw the two owners as father figures – they felt dependent upon them, and unable to cope if they were abandoned.
- Several of the key players felt threatened by being suddenly treated on the same basis as their lesser colleagues – were they being undervalued?
- The lack of preparatory discussion caused many to interpret the offer in an almost hysterical take-it-or-leave-it fashion. This resulted in being rushed into a new and unexpected set of challenges. They began to ascribe all manner of unfounded interpretations to the simple and genuine intentions of the co-owners.
In summary, their identity as followers had not been taken into account, nor had the dramatic shift to their self-image that was being proposed.