Avoid The Merger Splurge - Put People First - Kay-Lambert Associates Limited

Kay-Lambert Associates Limited

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Avoid The Merger Splurge – Put People First

Coming Together in Pieces and Acrimony

Few of us with a few years of working experience behind us could have escaped having to live through a merger of some kind.

I’m not talking about the happy merger we call a wedding, but something more akin to an unhappy arranged marriage.

There are many valid reasons why two companies (or more) might decide that they are stronger together than apart. Economies of scale, removing some of the competition, better products for customers, consolidation, etc.

But it all seems to go horribly wrong when having done the financial due diligence and some cursory management due diligence, the deal is done and two companies are thrust together like a pile-up on a motorway.

Why does it happen like this? What is being over-looked? Or do we just have to accept that mergers are very difficult to pull off and there’s bound to be a lot of collateral damage?

 People Are the Key

We don’t have to dig too deep for the answer. Every single employee on both sides of the newly formed super-organisation can probably tell us, but we don’t often ask.

Putting two companies together isn’t like parking your motor home up at a campsite and plugging into the electric supply. It’s not a plug and socket fixture. It’s much more than providing a shared power supply.

 And yet the bulk of activity that follows a merger, take-over or acquisition seems to focus on just that. Brilliant IT consultants are given the near impossible brief of amalgamating or integrating two systems that were never designed to speak to each other.

That would be easy if it was just a case of taking two computers and loading up the same software on both. But it’s not. Those computers belong to a person, and those people have an affinity with the computer and the software that they have been using. They are comfortable with it, even if they don’t like it that much and may have moaned about it for years. And they have reservations that the software being used in the other part of the organisation will be right ‘for here’.

There’s a huge chunk of ego coupled with serious concerns about operational effectiveness, and supplemented with real doubts about the decision-making competency of the people who are driving the integration. All of these issues are significant, and none can afford to be ignored. But IT consultants, brilliant as they are, might not have a degree in mediation and may not have had a stint working for the UN in war-torn regions of the world. They are not best placed to resolve these issues.

The simple truth is that before any infrastructure changes are made, and before the office renovation people move in; the integration has to start with the people. It’s the people who use the systems, the technology, and the processes. They make or sell the services or products. They have an emotional attachment to the company they have worked with for the past years.

We’ve Got History

Before the merger took place, both companies regarded each other as the competition. They told themselves bad stories about each other and were convinced those things were true. They don’t like each other and they certainly don’t trust each other. It’s not easy to now share a bed with them, just because the two Boards have decided that bygones will be bygones.

Before the merger took place, people on both sides probably felt that they were doing the better job. Even if their technology wasn’t as good, their customer service was better; or maybe one was bigger than the other, with more customers; or maybe the logo and marketing material was smarter. We always want to believe that we work for a good company, even if we occasionally moan about it. And even if we don’t like where we work and look with envious eyes at our competitors, we still feel an emotional pull to the company that took us on.

To be suddenly forced to change sides, adopt a new position, take on a new identity, and do things in very different ways just doesn’t seem fair! And who’s likely to get their own way more? Will we have to take on more of their ways of doing things, or will be able to get them to adopt our ways?

The Happy Couple.

Imagine you’re about to get married or move in with a partner. You’ve both led independent adult lives before and have acquired your own possessions and habits. Suddenly you’ve got two TV’s. Now, I love my partner and I really like my TV. I bought it because it met all my needs and had the important features I valued. I don’t want to change it. I don’t think my partner made such a good choice.

Resolving this isn’t straightforward. We could end up with both (a TV in every room); or we both get rid of our TV’s and incur the expense of buying a new one that both us feel we can live with; or one person reluctantly perhaps, feels they have to give up something reasonably precious to them. In the final scenario, resentment can ensue, and that’s when you like each other!

Pay Attention to What Lies Beneath

It’s not really about the TV. Or the Computers. Or the office layout. It’s what it signifies to the person. We define ourselves partly by where we work. Our sense of self, our identity, our feelings of worth are heavily influenced by the work we do and the places we do it.

When these things come under threat, it is frightening. So we seek to defend them.

When a merger occurs, the joining can be extremely painful in a way more typical of a divorce. People need help to redefine themselves, create some new stories, build new bonds, and develop new emotional attachments. All of this has to be taken seriously. Two very different cultures won’t become one just because they now buy their stationery from the same supplier.

Absent fathers often try to win the love and affection of their children by buying them presents. I haven’t found this to be an effective strategy. In the same way, giving employees newer IT systems, desks, and livery isn’t really going to make up for a lack of love and compassion.

People are left out of the equation in too many strategic decisions and change programmes, and it’s a costly oversight. It results in unnecessary delays, extra complications, and very fraught transitions that fail to deliver on their promise.

But perhaps this oversight is most keenly observed in cases where two different companies that have ploughed their own furrows totally independently of each other, are suddenly bound together. It’s less integration and more disintegration. Sparks really fly.

People must come first. Everything else must be subservient to them. Because people can’t be as easily switched on or switched over as a power supply.

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