Leading People through Mergers and Acquistions

More than any other type of organisational change a merger or acquisition can undermine people’s sense of purpose and commitment to their organisation. It falls to the HR Director to alert fellow directors to the potential commercial hazards this may entail, to spell out the options and to guide them safely through the tricky process of unifying two disparate organisations.

When two organisations, employing hundreds or thousands of people, merge, a great deal of effort is given over to due diligence. Much time is devoted to poring over finances, integrating IT systems, telling the stock market about synergies and drawing up new structure charts.
Too often, it is only when people inside the organisation start to display all kinds of dysfunctional behaviour - opposition to change, constant grumbling or simple apathy - that it dawns on leaders that something has been missing from their plans. By then it may be too late to prevent deterioration in performance, poor customer service or employees jumping ship.

On the other hand, if an HR Director anticipates the important human issues stirred up by merger they can influence and guide their fellow directors through the emotional minefield, enabling them to keep their workforce motivated and engaged in making the new enterprise a roaring success.

The first task is to make it clear that the people element of a merger is as important (if not more important) than issues of structure, process, finance, and IT. It is not always obvious to executives that this is so. They may struggle to put their finger on the real issues involved and even when they have an inkling that something must be done to keep people on board they may be at a loss as to what is required.

Unlike most major changes, mergers and acquisitions have an enormous effect on culture and people’s sense of identity. If one organisation effectively takes over another and imposes its culture on the new combined organisation, like an invading army, then people in the organisation that has been taken over can have a very hard time adjusting. If the cultures of the two organisations differ greatly some will find it impossible to adjust and may simply leave. Worse than that, they may stay but mentally opt out of the new arrangement and do the bare minimum to get by.

As HR Director, you might want to start by asking fellow directors to imagine how they would feel if their favourite sports team were to merge with one of its rivals. Not only that, but the merged teams would take on the name of the rival team and play at the rival club’s stadium. Such a question will start them thinking about the emotional impact of merger. Stories of mergers that have come unstuck due to inattention to people issues will further stimulate their desire to take action. ....to read the rest of this article see November's edition of The HR Director magazine or contact Anthony Greenfield via this website.