The done deal - just the start
Acquisitions are the easy bit. The hard part is consolidating
or integrating the two organisations' structures, systems, people
and culture. Top managers who are involved in the business strategy
and financial markets can overlook that next crucial stage. This
is where success is won or lost. Most mergers fail at the integration
Critical Success Factors
- Communicate - you can't do too much of it.
- Plan for fast action to consolidate the new organisation.
- Define the nature of the integration strategy.
- Describe a vision of what the new organisation will look
- Plan for the pragmatic alignment of structures, process,
systems and culture.
- Draw on both companies' strengths and values in building
the new culture.
- Identify key managers and employees, and hang onto them.
- Show respect for both companies' operations.
- Settle compensation and benefits issues early.
- Identify and communicate with all your stakeholders: at least
shareholders, partners, suppliers, customers and employees.
- Be open and truthful to build trust. Don't make false promises.
- Publish a timetable.
- Be clear if there is a dominant partner, or a merger of equals
(rare), and the consequences.
- Don't paint the other lot as 'the bad guys'.
- Explain the 'why' of change, in human not just financial terms.
- Satisfy both intellectual and emotional needs.
- Avoid 'them and us'. Don't allow a superior/inferior, winners/losers
mentality to develop.
- Set an example by your own attitude and behaviour.
The medium is the message
Use a variety of processes for getting your message across and
- Presentations, road shows, question-and-answer sessions, lunches,
- Regular cascades
- E-mail facility for handling questions and receiving feedback
- Confidential telephone helplines
- Staff newsletters
- Rumour mill - keep feeding it
Dealing with emotions
- Expect people to experience the 'transition curve' of emotions:
anger, resentment, grief, bewilderment and denial, before they
- Be prepared for people's emotional states to happen at different
times and speeds.
- Ask lots of open questions.
- Provide staff with help and support.
- Identify where the high-flying talent is in the other company.
- Pinpoint important know-how in the other company that you
will need to retain.
- Let key managers know they are valued early on, and make sure
you don't lose them.
- If managers are terminating, ensure they don't take important
know-how before passing it on.
- Don't give the general impression of favouring some groups
or individuals against others.
- Find out people's past experience of mergers. They may have
valuable expertise and insights.
Mix and match
- Mix with 'the other lot'. Get to know people in the other
- Find out as much as you can about your merger partner.
- Ensure that managers who visit their counterparts are adequately
briefed and are sensitive.
- Use merger activity to develop and stretch managers' skills.
- Give managers something to do to get them positively involved
in the merger.
- Make extensive use of taskforces and projects teams.
- Handle terminations generously and with dignity, for those
going and those remaining.
- Recognise that mergers cause mayhem for some people's careers,
lives and families.
- Many employees will worry about income and job security.
- They will be asking you and themselves:
- "Have I got a job?"
- "What will my job be?"
- "Who will my boss be?"
- "Where will I be based?"
- "When will this hit me?"
- people to be preoccupied and to speculate.
- workload to increase dramatically.
- the rumour machine to go into overdrive.
- the pace to vary between nothing apparently happening
and sudden bursts of activity.
- a second wave of involuntary losses some time later.
- Expect to experience a dip in operational performance during
the transitional phase.
- The internal focus can take the eye of the external business
- You may experience paralysis as some employees stop work to
speculate on the outcome.
- There may be a momentary loss of leadership and direction
at the top.
- Culture clash can lead to 25-30% loss in performance.