Coming Together — The people side of merger integration

One big, happy family… right??

Bain Capital.  McKinsey.  Deloitte… don’t take just my word for it —  the single biggest reason for merger or acquisition failure is not costs, lack of synergy, incompatible strategy, etc.

It’s people.  Failure to integrate cultures, directions, leadership and communities within an organization result in more failures than any market disapproval could muster.

Pay attention here – you’re paying big bucks for – usually – more than a simple asset.  Realistically, even simple “asset purchases” are hoping for more than a simple Return on Asset; we’re always hoping for bigger, better returns that can only happen through the newly combined workforce talent.  Again, “people.”

Let’s get right to it.  I’m assuming you’ve competently determined that the merger or acquisition is a logical addition to your business.  The technical part is fairly simple… a bunch of spreadsheets, a month or two of due diligence to verify the lofty promises, assurances, and statements from management.  Now, let’s work on the more fickle side…

The most important thing to remember is communication.

Frequent, informative, helpful communications. The initial merger time is the most critical, since many of the employees in the acquired company will “overthink” the event, and may believe they will be summarily replaced.

Or, more important to key performers, that they’ll lose their “key performer” status.

Frankly, you may actually WANT to lose some of them, but don’t you want the opportunity, at least, to have some input to who stays and who goes?

If you intend to make cuts, announce them and do them quickly. The longer it takes, the worse the retention results. Be sure, if staff cuts will occur, that they occur on both “sides” of the merger equation, if you really want a successful post-merger story.

Read this closely: the longer you take to make the “who stays and goes” determination, the more high performers you lose.  It really is that simple.  Mediocre and poor performers simply fret endlessly, duck for cover, and hope to go unnoticed.

High performers don’t look at life – or their careers – that way.

And they have no intention of waiting around to see if you’ll give them a thumbs-up or thumbs-down.  These people are infinitely employable, have probably got feelers out already, and in the absence of anyone helping them do differently, will look out for their own well-being.

Even to your detriment.

Next, assess the acquired company’s culture and strengths, and make the determination on what “works” for you, and what doesn’t. Once you determine what the “combined” culture will look like, no compromise — on either “side.”

Read that again.  No Compromise.  On the bus or off the bus.  No one rides along for sightseeing.  If someone – particular if influential and/or in leadership – gets to publicly buck the “new deal.”  Like the three musketeers, it’s “All for One!”

Remember — and this is ultra-important — there can only be ONE culture. Anything else will lead to fragmented actions, loyalties, and lack of direction.

Finally, be frank and open with the process.  The worst thing that could happen is that the acquired employees lose trust in your integration process – they already ‘suspect’ you may not have their best interests at heart.

If my concepts above aren’t specific enough, here’s some detail on crafting a successful integration:

1. Create an employee integration plan immediately. It takes hours, not days, don’t dilly-dally. Communicate that plan to others (both ‘”sides”).
2. Execute to that plan immediately, quickly, and strongly. Patton was correct: “A good plan, violently executed now, is better than a perfect plan next week.”

Time is not on your side here. The longer it takes, the worse the outcome… guaranteed.

3. Decide where you’ll compromise — and where not — and hold firm.
4. Communicate, communicate, and over-communicate. Rinse and repeat. Even “nothing new to report” is better than silence.

People fill ‘unknowns’ with their own “knowns,” and they are generally not the information you’d prefer them using to make decisions.

5. Clearly define roles, accountabilities, reporting relationships, and performance expectations. It’s the very core of the employee agreement.
6. “It ain’t over ’till it’s over.” Don’t declare integration ‘victory’ too soon.

Prematurely hailing success has killed many an integration, as a couple of key people/groups look around and say “not from where I sit, bubba”

Good luck. Fun but challenging stuff…