Be Willing to Be Unfair in M&A

Mergers always require you to make sacrifices. It’s a time of tradeoffs. Compromises. Less than perfect solutions. So far as the people issues are concerned, it’s like watching a card game—some win, some lose, some break even.

You can care deeply—for everybody—but you can’t keep from damaging some careers.

Deep inside, managers know this is the case. Obviously, everybody can’t come out on top. But when it comes down to deciding how the two work forces will actually be integrated, the people calling the shots usually feel compelled to make a show of fairness. Instinctively, they want to come across as acting equitably, to be seen as even-handed in the way they assign people to the various positions.

This sort of behavior is fully understandable. But as it turns out, it’s not particularly good management. In fact, if being “fair” to current employees is a top priority, merging is probably a bad plan. It’s sort of like wrestling with the decision of whether or not to declare war. How can you justify it if you’re unwilling to sacrifice some lives? Nobody ever said that mergers are the kinder and gentler way to corporate growth.

All too often the attempt to be fair and equitable ...