Managing Through a Merger

 By Dianne Durkin
May, 2011

People, no matter what age, dislike change. So with experts predicting continued robust merger and acquisition activity, companies need to be sure they are keeping communication lines open.

During a merger or acquisition there are many constituencies to be consider: employees, managers, customers, shareholders and investors. However, the success of a merger or acquisition comes down to two key contributors – employees and managers. 

During a merger, employees want to be listened to, communicated with, appreciated, and understand how they can contribute in the new organization. Managers need to focus on the strengths of the merger or acquisition; establish the future vision, values, and positioning for the new entity; and communicate these to all audiences, both internally and externally.   

Focusing on Strengths

In a merger or acquisition, anxiety about relocation, job security and/or the new management can be found at all levels of the organization. Concern is often prevalent at the executive levels and quickly filters down through the entire organization.

Employees at all levels need to talk when the merger or acquisition is first announced. They need to have the opportunity to express their concerns, and at the same time be able to focus on the business of the future.

The big question on everyone’s mind is “How will this affect me?” Understandably, employees are skeptical, and in many cases, distrusting of anyone within the organization. A third-party consultant who clearly understands the intricacies of mergers and acquisitions and their effect on people, productivity and profitability, can communicate a clear message of concern, respect and admiration for the employees and customers. This immediately enhances the support for the merger/acquisition and begins the change process.

By focusing on the strengths and future growth of the organization, employees will get excited, create momentum and begin centering their energies on the positive future growth of the company instead of their personal issues. 

Sharing the Vision

It is critical that management keep all employees informed about the goals that need to be met and any changes that will occur as the merger/acquisition deal is closed and throughout the first operating year of the new organization. If employees know the strategic direction and how they fit into it, they will contribute to its overall success and give 100 percent. Having a clear, concise and consistent vision that is engaging and reaches out to all levels of the organization is a critical first step. The next step is to ensure every department and individual knows how they contribute to the vision and the overall success of the new entity.

Involving all levels of the organization in creating the vision provides an additional dimension of support and dedication. It also meets the needs of the employees: to be listened to, communicated with and appreciated. With this mix, a successful merger or acquisition can be achieved.

Communicate

Communicating information about the merger or acquisition with employees greatly contributes to the overall success of the merger/acquisition. Frequent, honest communications concerning the evolution of the new entity are necessary. While all the strengths and weaknesses of each of the companies will not be completely known or understood until three to six months into the merger, it is important for management to continually fine-tune its strategic direction as new information unfolds.

By continually communicating clearl, concise and consistent messages to all constituencies, momentum, productivity and profitability will be achieved.

Back to Basics

Return to the tried and true. Treat people with respect, trust and dignity and communicate. There are steps companies can take to ensure a smooth integration and transition with limited effect on productivity and profitability:

• Provide forums that allow employees to express their anxieties while at the same time answering particular questions: What are the strengths of each of the organizations? What areas need to be improved in each? How can the strengths and areas for development be balanced for success? If there were one message you would like to give to the senior management team, what would it be?
• Set a clear and easily understood vision that will inspire employees to make meaningful contributions to the new organization’s success.
• Provide an environment that fosters collaboration between both organizations. Set up teams consisting of members of both organizations to develop integration solutions around the business processes and procedures. These teams will need to be provided specific goals, objectives, deliverables and timeframes for delivering the solutions.     
• Develop regular, integrated and consistent communication strategies to all audiences.
• Endure ongoing success through continuous reevaluation and feedback. Incorporate a culture of innovation, creativity and respect. 

Going back to the basics of listening, communicating and appreciating all audiences as well as helping individuals grow and prosper, and making them part of the solution will lead to a successful merger or acquisition.

Dianne Durkin is president and founder of Loyalty Factor, a consulting and training company that enhances employee, customer and brand loyalty for businesses. She is the author of “The Loyalty Factor: Building Employee, Customer and Brand Loyalty,”” and “The Power of Magnetic Leadership: The R.E.A.L. Approach.” For more information, visit www.loyaltyfactor.com.