Man­ag­ing your merger

Cor­po­rate mar­riages have the po­ten­tial to dev­as­tate em­ploy­ees

Winnipeg Free Press - Section H - - FRONT PAGE - BAR­BARA BOWES

SOME­TIMES I com­pare or­ga­ni­za­tional change to those shift­ing tec­tonic plates found in the Earth’s crust. While tec­tonic plates usu­ally move slowly and qui­etly, they of­ten cre­ate a “big bang” ac­com­pa­nied by that feared tsunami that cre­ates such a dev­as­tat­ing af­ter­math.

In my view, un­der­tak­ing ma­jor or­ga­ni­za­tional change of any kind is no dif­fer­ent.

Now, I’m not a sooth­sayer, but I en­vi­sion a sig­nif­i­cant in­crease in cor­po­rate merg­ers and ac­qui­si­tions this year and be­yond. Not only that, I ex­pect ma­jor cor­po­rate changes re­sult­ing from forced clos­ings, lo­ca­tion trans­fer, gov­ern­ment leg­is­la­tion and/or gen­eral suc­ces­sion is­sues. This has al­ready been played out in the Win­nipeg mar­ket with a large na­tional bank pur­chas­ing one of our prized lo­cal firms.

Yet, change is a nat­u­ral force in the busi­ness world. Cor­po­ra­tions and or­ga­ni­za­tions alike need to con­tin­u­ally ad­just and adapt to cir­cum­stances. Com­pa­nies need to grow to sur­vive. Oth­ers know that fo­cus­ing on their core com­pe­ten­cies and putting other el­e­ments of their busi­ness on the prover­bial auc­tion block is the only way they will sur­vive.

No mat­ter what strat­egy busi­nesses and or­ga­ni­za­tions use to grow, the change this cre­ates greatly af­fects em­ploy­ees in the or­ga­ni­za­tion. Not only that, we know that an ex­am­i­na­tion and plan­ning for hu­man re­source is­sues dur­ing merg­ers is of­ten ne­glected while lead­ers fo­cus on the fi­nan­cial and legal fronts. As a re­sult, the busi­ness world is lit­tered with ex­am­ples of merg­ers and ac­qui­si­tions that have failed to cre­ate the syn­er­gies first en­vi­sioned. These busi­nesses have learned the hard les­son that em­ployee power can make or break man­age­ment suc­cess.

So, let’s ex­am­ine how a merger and ac­qui­si­tion can be more ef­fec­tively man­aged from a hu­man re­source per­spec­tive. First, keep in mind that there are two phases a) a pre-merger phase and b) a post-merger phase.

Pre-merger phase — In this phase, pay close at­ten­tion to as­sess­ing the cul­ture of the or­ga­ni­za­tion be­ing ac­quired or merged in. Dis­cover how work is ac­com­plished and how em­ploy­ees re­late to one an­other and to their lead­ers. Ex­am­ine the for­mal­ity or in­for­mal­ity of the or­ga­ni­za­tional struc­ture and the work­flow, the hu­man-re­source poli­cies and phi­los­o­phy, the man­age­ment styles and the gen­eral busi­ness pro­cesses used in the or­ga­ni­za­tion. Ex­am­ine the tal­ent within the or­ga­ni­za­tion and de­ter­mine how these skills can be of ben­e­fit. Sum­ma­rize how all of these el­e­ments will fit into your or­ga­ni­za­tion, iden­tify the gaps and de­velop a plan for deal­ing with them.

Post-merger phase — The post-merger phase is the foun­da­tion build­ing phase, yet a fail­ure to un­der­stand and plan for em­ployee tran­si­tion is a fre­quent er­ror dur­ing this phase. No mat­ter what, a merger is a trau­matic ex­pe­ri­ence. At the first inkling of a merger, em­ploy­ees au­to­mat­i­cally go into ca­reer sur­vival. They will im­me­di­ately want to know what will hap­pen to them. Em­ployee be­hav­iour can range from er­ratic anger to quiet de­pres­sion. Those who can’t en­vi­sion a fu­ture with the new firm will quickly ap­ply for jobs else­where, thus cre­at­ing un­wanted turnover. Over­all, you can ex­pect in­creased em­ployee stress lead­ing to a de­cline in pro­duc­tiv­ity for a pe­riod of time.

As a re­sult, man­ag­ing the post-merger phase is ex­tremely im­por­tant and cre­ates many chal­lenges for hu­man re­source man­agers. There are un­ex­pected pol­icy is­sues, conflicts with re­spect to align­ing com­pen­sa­tion, job ti­tles and per­for­mance ap­praisal sys­tems. Typ­i­cally in larger or­ga­ni­za­tions, em­ployee re­la­tions are more for­mal and the merg­ing em­ploy­ees from a smaller or­ga­ni­za­tion will tend to feel alien­ated as they lose the more per­sonal ap­proach to prob­lem solv­ing. The fol­low­ing guide­lines will help to over­come most of the chal­lenges you will ex­pe­ri­ence.

Clear the con­fu­sion — Con­fu­sion is nat­u­ral in a merger. While you may think you have com­mu­ni­cated to em­ploy­ees, you need to com­mu­ni­cate again and again and again. Most peo­ple un­der stress can’t ab­sorb all of the mes­sages they re­ceive and be­come con­fused as they lis­ten to ru­mours and other mis­in­ter­pre­ta­tions. Make sure you com­mu­ni­cate to em­ploy­ees prior to the for­mal press re­lease. In­clude the man­age­ment team from the or­ga­ni­za­tion be­ing merged in be­cause these are the man­agers the em­ploy­ees trust.

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