Engineer Early Success in Your Merger
Every merger, once announced, is immediately put on trial. Top management—those who crafted the deal—also stand accused. And the accusers just keep crawling out of the woodwork as several months go by.
Often word of the merger leaks out during the negotiation stage, and the criticism cranks up before the deal is done, even before, top management gets to tell its story. This is a crucial opportunity, but far too often executives blow their chances at properly setting the stage for what’s to come. They also say things that are guaranteed to come back to haunt them. Besides all that, however, talk is cheap. Top officials can carry on all day about how great the merger is going to be. They can praise its potential, and promise people the moon. But there are many disbelievers.
The press hovers close by, hoping to report something provocative and controversial. They like bad news the best. Also, the investment community may have a sour attitude. The competition is always chomping at the bit, looking for trouble they can talk about to your customers. As for the employee audience, well, they’re listening with a lot of skepticism, suspicion, hostility, and fear.
This is a hard-nosed jury here. To a large extent, top management and the merger are guilty until proven innocent. And now for the worst part of it all: the critics get their proof first.
Think about it. A merger is a very strategic move. But early on, there are many tactical problems. You don’t do a merger because it brings you an immediate high, or because you get instant payoff. For the most part, the good stuff takes quite a while to materialize. This is a prime example of “deferred gratification,” where the organization decides to go through the difficult drill of merging for the eventual benefits it will bring.
Meanwhile, the critics have a field day, calling attention to the generic merger problems as proof that the merger was ill-conceived or is being poorly executed. Their evidence? Sagging morale. A weakening trust level across the organization. Erosion of job commitment. Power struggles and turf battles. High stress. Loss of company loyalty. Confusion and frustration. Finally, and probably most important, a downturn in productivity.
Now if they really knew what they were talking about—and if they wanted to play fair—they would admit that this is a completely normal turn of events. It goes with the territory. These problems just prove a merger is going on, not whether it’s good or bad.
It may strike you as perverse, but, frankly, you should be very vocal in predicting these problems. Better to come across as a wise prophet and prepare your employees for the problems that are bound to come, rather than leave the anti-change crowd free to exploit the situation to its advantage.
Still, telling people what to expect is not nearly enough. You need quick accomplishments you can celebrate publicly. To offset the scorn and suspicion, you need some rapid success. Somehow you need to protect the deal by developing hard proof that things are headed in the right direction.
So what do early wins look like?
- The two company leaders have met and get along. (“They’re real people!”)
- A new name and logo are rolled out. (“It’s pretty snappy.”)
- Employee benefits packages are consolidated. (“We’re not forgotten.”)
- A big sale is completed. (“We can work together.”)
- Deserving candidates are promoted. (“There’s room for winners here.”)
- Unpopular product lines are killed off. (“It’s about time.”)
- One company adopts the other’s best practices. (“We can learn from them.”)
- Onerous policies and procedures are discontinued. (“Finally!”)
Far more convincing than all that, though, are financial victories. As the saying goes, money doesn’t talk, it screams.
When the numbers stack up favorably, people pay attention. If you can show quick merger payoffs that carry dollar signs, the gripers, whiners, and other nay-sayers start losing credibility and resistance starts to soften.