At the time of the merger, most media reports characterized it as a “natural” fit. The two companies’ businesses complemented one another so that the merger put the newly enlarged organization in a better position to offer a wider range of services to both shared and prospective customers.
The respective companies had reached a mutually satisfactory arrangement of combining their two leadership teams, with no loss of any key players.
If all that was true, why has the yearlong effort to integrate the two organizations dragged out, still causing so many headaches?
Mergers and acquisitions, even in the best of circumstances, represent significant change. Bringing two cultures and two ways of operating together represents change at both the institutional and personal levels within both the acquired and acquiring organizations. And change like that usually foments internal uncertainty, dislocation, and fear.
Acquisitions and mergers spawn many internal questions that cannot be answered right away. That’s when the rumor mill takes over. People’s natural reactions to such momentous changes cannot be avoided. Rather, they must be acknowledged and accommodated.
What can be managed, on the other hand, are people’s expectations. Employees and managers can be given insights into how and when decisions affecting their lives will be made, as well as information as to why some questions will have to remain unanswered for a time.
The acquiring firm buys brands, patents, facilities, distribution systems, equipment, etc. But the acquisition also includes people. Without the people, it’s just an empty shell.
So it’s incumbent on senior managers to do all within their powers to keep people on board, welcoming and reassuring the employees of the acquired company. They must reinforce the core values of both firms so that the top talent won’t make a beeline for the door the day after the sale closes.
Effective, relevant, and timely communications will go far in alleviating concerns while achieving the core business purpose of the merger, which is to preserve and enhance the value of the acquired company by building trust and credibility among the newly added employees and managers.
Often, troubles arise in the early days before much is understood and few of the biggest questions can be answered because there are still too many unknowns. The acquiring firm is well meaning when it communicate reassuring words that “nothing will change,” and says that people should just keep doing what they’ve always done.
But when the deal closes and the questions begin to find answers, the initial broad communications may be inadvertently contradicted. It can’t be helped. Much is discovered in the early “honeymoon” phase that hadn’t or couldn’t have been anticipated, necessitating unplanned changes in plans.
To that end, both internal and external communications should avoid making assumptions in the first days following a merger or acquisition.
The key to helping assure ultimate success of the merger and a smooth integration is to approach the employees and managers of the acquired firm with honesty and reassurance. The core messages must stay simple, direct and honest.
- We acquired your company because of the excellence it adds to ours. It would be unwise for us to do anything that diminishes or destroys its value or that excellence.
- Please work with us as we get to know one another better, as we learn how we will operate together going forward.
- Help us learn more about you. Share your best practices and show us how they might benefit the new company.
- Please understand that there will probably be stumbles along the way. We will always try to minimize the mistakes and hope that you will stick with us through the rough patches.
- By working together, by striving to achieve the best for our customers, our employees, and our stockholders, we will all succeed together, and the final product will be more than the sum of the two components.
Those kinds of messages suggest an honest willingness to listen, and to be open to new ideas. The best results from acquisitions are realized when both sides yield a bit. The acquiring firm should never assume that its processes, procedures and policies are the only way to do it. Instead, it should be open to adopting best practices of the acquired firm.
In the end, the ideal post-merger integration is one where the new company is truly a new company, embodying the best of the two merging partners.