Tips to Survive Post-Merger & Acquisition

Mergers and acquisitions have become a common part of business life. They’re an easy way to grow a business, so they’re likely to continue to be prevalent in the future. Yet, according to a Harvard Business Review study, up to 90 percent of these deals fail. How companies face the numerous challenges of integration can determine whether the M&A is a success or a failure.

For employees, M&As can be fraught with tension and uncertainty. Employees are worried about their jobs, anxious about learning new policies, wary about adjusting to new management, and can easily become disengaged. This is especially true in acquisition since employee loyalty is still with the newly acquired company. Effective integration, then, has been found to be the single most important factor in a smooth adjustment and easy transition. Acquiring market share is not as important as ensuring that employees — the backbone of any organization — are happy, willing and motivated to work through any needed adjustments.

Here are a few helpful tips to get through the rough spots of mergers and acquisitions:

1. Be transparent and open. 

Answer immediate questions as soon as you can. The first question employees will ask when faced with a merger or acquisition is, “Will I still have a job?” The next, “Whom will I work with? Will I still be paid the same?” 

The uncertainty created by M&As can highly affect productivity. The best solution? A short turnaround between the official announcement of the M&A and specifics, like new job titles and benefits. That way, people will know where they stand and can make plans accordingly. If specifics won’t be shared within a short period of time, it helps to give employees a timeline as to when they can expect additional information. That lets people know you acknowledge how they feel and that they won’t have long to wait for news.

At this point, overcommunicating can be a good thing. A lack of communication can lead to rumors. Talk to employees, find out what they’re doing, how they do it, what they’re good at, what they’re willing to change, etc.

It’s okay to say, “I’m not sure, but I’ll get back to you as soon as I have the answer.” 

Consider an “open door” for C-suites to answer employee questions. This can have a powerful impact because employees will feel heard and valued.

2. Identify the Leaders of the Pack

In most organizations, there are a few people that employees look to for advice or consult with when there are problems. These hidden leaders and problem solvers don’t necessarily hold positions of power, but everyone looks to them for guidance during crises or times of stress. Once you’ve identified these people, assign them to an integration task force to help navigate problems that are likely to come up during the integration process.

3. Integrate before the deal is official.

This can be tricky because of the legal and confidential issues surrounding most merger and acquisition deals. But you can be better prepared by getting to know the culture of the other company … discovering what they’re good at, what they do that’s different from your company … and recognizing the potential areas of contention even before the official news is announced. In fact, waiting until all the I’s are dotted and all the t’s are crossed is likely to result in a long and difficult transition.

Getting as much information as you can upfront will also help identify organizational areas that should be kept as they are and which should be merged. Showing an interest in the other company and being willing to compromise can also help both parties gain common ground and a renewed understanding that will help pave the way forward.

4. Take care of the nitty-gritty.

M&A periods are confusing and anxiety-inducing enough for employees without having to worry about the basics of performing their jobs. Ensure that each employee has access to the intranet, software, equipment and company email. That will not only guarantee that business continues as usual but will also make employees feel that they belong and are vital members of the new organization. 

5. Provide support for as long as possible.

As hard as you’ve worked and prepared, it’s impossible to cover all the bases. Growing pains will occur. The transition time can vary depending on the size of the company, the complexity of the deal, the extent of human capital changes and other factors. It’s a good idea to have someone from headquarters on-site at the newly acquired company to field questions, put people’s minds at ease and provide a friendly face. That can help put immediate concerns and issues to rest. 

Be prepared for culture shock. Cultural misfits are one of the biggest challenges to integration and must be handled with kid gloves. Don’t expect new employees to shift loyalties and identify with the new company immediately. You may want to set up a buddy system so employees have a point person to whom they can direct their concerns and fears. This person can serve as a personal, more intimate face to the company that acquired their services.

If you haven’t been part of an acquisition or integration team, you may not realize just how challenging the integration process can be. Change is always hard. How you handle the culture shift and human capital issues, in particular, during this time will determine the success of your merger or acquisition.

“When you have mergers and acquisitions that improve the quality of your product, the ability to grow and bring better efficiency, it’s good for all.” (Roger Agnelli)