Managing the change of a merger or acquisition is an important part of the process and so this is where all the planning comes into action. Without the proper handling through change management, it has been found that most mergers and acquisitions fail, in fact 80%. Consideration is required for communication and consultation, leadership, training, coaching, resistance & resilience whilst taking employees through the journey.
The journey starts with building awareness of the need for change and explaining why it is necessary. We assist our clients to give their employees an opportunity to ask questions and make suggestions. This may also be necessary as part of Award consultation obligations.
It’s important to understand that the less that is known, the more resistance there will be. Employees understanding the change through a merger or acquisition is one thing, but it doesn’t mean they will want to make the necessary changes that go with it. So, you will need to be patient with employees during a merger or acquisition until they feel comfortable.
We can work with your teams and encourage open discussion so they will buy in to the change. Employees need to understand how they have to change and what they need to do. Employees understanding how to do something doesn’t necessarily mean they are able to do so, so this is another consideration.
Also, let’s not forget, it is said that it takes 66 days to form a habit so it is important to ensure employees don’t revert to old ways. Resistance is usually attributed to lack of communication, vision, confusion, fear of insecurity, and other things. Positive reinforcement and encouragement is required to keep them on track and productive.
And let’s not forget about our leaders. It’s a critical success factor for leaders to be supported during a M&A through transition into a new role and establishing & leading new teams and getting them to do what they need to do in the way they need to do it. The perception of a Leader’s behaviours during a merger and acquisition has a significant impact on employees’ reaction and behaviour in both organisations. Therefore, positive behaviours and communications from Leaders is crucial to successful change.
Like with any organisational design, it’s important to ensure the strategic plan for the new organisation post M&A is clear to ensure the structure supports the plan. Following that it’s about matching talent to roles and considering the timing of the transition. However, when merging similar businesses, it’s inevitable that there will be redundancies. That being the case consideration needs to be given to consultation, redeployment opportunities and selecting between employees.
When going through an M&A it’s easy to focus on the new organisation but you can’t forget about employees that will be left behind or made redundant. How departing employees are treated will affect the morale of those who remain – you want to get off to a great start so that is something to think about…
The organisational culture plays an important part of the new structure. In fact, culture difference has been reported to be responsible for the downfall of the merger between Chrysler and Daimler in 1998. We spoke about leaders earlier, but it is effective leadership that can help employees to accept new values and culture through spending time with employees, knowing them, understanding what irritates them and what excites them. Hopefully, the difference in the organisations’ values and the plan to move forward to a common set of values was determined before signing the dotted line. The time between signing and closing a deal is valuable to build the foundation for integration (intégro) for growth – Intégrowth.
Something else to think about is that an M&A is stressful for employees and there are often feelings of loss. However, a resilient employee can think positively and this resilience correlates to commitment to the organisation post merger and therefore making the M&A more successful.
Developing resilient employees must therefore also be part of the plan.
Contact us now to discuss how we can assist. Let us help you integrate for growth at Intégrowth.
At Intégrowth, we focus on making sure that the people are prepared for and embrace the changes which inevitably come from a merger or acquisition.
We assist with change management and integration of the people within the business, leadership support & coaching, resilience training, organisational culture alignment and organisational structuring and advising on industrial relations considerations & support.