What are the ingredients of a successful merger?

Can two or more very different organisational cultures be successfully merged?

What role do staff of an acquired organisation play after it is bought?

What is the role of Human Resources during Merger or Acquisition activity?

All 4 questions are relevant and intertwined in my experience of ‘surviving’ being acquired.

I have worked in the government sector (British Embassy Kuwait),  power generation and digital telecoms (Siemens), senior management positions within TNT and DHL in 8 countries throughout 4 continents in the last 25 years.

What are the ingredients of a successful merger?

A transparent, clearly communicated plan on the day of the merger/ acquisition announcement, timing is critical, detailing Who, What, When and How.
(Hopefully for obvious reasons)

Clearly define if it is a merger or an acquisition, they are not the same and trying to pretend otherwise is silly.

Prior to communicating anything, identify and protect ‘key knowledge’ holders, whose retention is critical to the business success of the new company.

Ensure ‘Key knowledge’ holders who you wish to retain are placed within the new structure. Give them the ‘heads up’ in advance of the masses to gain "buy in" and future trust in the new company. Retention packages should be thought out and clearly linked to the business success of the new company.

Do not waste time in implementing the plan, swiftness and fairness in all structural changes are critical to its success, do not twist the knife and withdraw it slowly during long periods of indecision mixed with indecision and reorganisation. This causes confusion, misery and discontent (on top of that already in existence)

Then communicate and keep on communicating with (twice weekly) detailed updates through HR to 100% of the new company.

Ensure all staff have an anonymous way of communicating any issues or concerns to the top with a defined time guaranteed for an answer to be posted (not weeks!).

Restrict the use of consultants to the planning and 1st phase implementation period only, 3-6 months, then kick them out and leave the management and growth of the new company to the men and women that are employed to do so.

Consultants are the scapegoats fed to the shareholders and analysts when:

Success is elusive. (You never get a return for this ‘investment’)
Do not deviate from the published plan, execute it, and deliver what was promised within the timeframe agreed.

In summary

Why is it so difficult to make clear, logical and sensible decisions?
Is it because the purchasing company is not staffed with the same calibre of managers and staff of the companies that they buy?

Does organisational positioning begin subconsciously, as the senior managers of the buying company hold all the cards? Perhaps nepotism takes over as people in power see opportunities within a much bigger company.

Often due diligence is purely a legal and financial exercise, ‘can we or can’t we buy?’ The people become a commodity, a unit of cost; purchasers continually fail to recognise that the strength and success in any and all organisations lies in the intrinsic ‘power’ value of its people. The way they are recruited, trained and empowered, generally leads to the success of the organisation. It is an ecosystem within itself and when upset the results are reflected in the failure of about 75% of global acquisitions.

EQ is the vital ingredient so often missed by purchasers.

Sean Bradley