Jay Sachetti joined Jeff O’Brien, partner at Husch Blackwell and Dyanne Ross-Hanson, president of Exit Planning Strategies talked about the market for mergers and acquisitions, exit planning opportunities for companies that don’t end up for sale and how companies can maximize their eventual sale price during an early October panel at the first Upsize on Tap event at Summit Brewing Co. in St. Paul.
When the state Legislature passed a law requiring employers to provide paid leave and safe time for employees, Justin Bieganek started hearing differing details from friends, colleagues and peers.
Paul Brown, Ph.D.
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During a merger,
don’t forget your
human assets
by Paul Brown, Ph.D.
WHEN A SIGNIFICANT CHANGE such as a merger or acquisition occurs it is wise to pay special attention to the human capital in your company.
Your staff and management team are the ones who are going to keep the business going during this challenging transition. It is important that their minds remain focused on your customers and not worrying about their status in the company or their livelihood. After all, you still need to conduct business.
So, how can you ensure the success of the team and of the merger? How can you, as the business owner, make the process of doing business smoother?
The simple answer is communication. Of course, we all know that there are no simple answers when it comes to a merger. But creating a culture of communication can go a long way to ensure that your entire organization is focused, moving forward positively and in the same direction.
Before the merger
One of the first decisions you will need to make is whether to bring in a consultant to assist with the transition or rely on your human resources team to tackle the job.
While some organizations are fortunate enough to have an HR professional on staff with expertise and experience in taking organizations through a merger, many don’t have that luxury or simply have too much on their plates already.
An organization development consultant, who specializes in guiding organizations through the emotional land mines inherent to mergers, can do much to ensure a more successful transition. A consultant objectively assesses the environment within the newly merged organization and can identify early on those human issues that erupt into conflict and can sabotage a merger.
When the people and cultures of two different organizations come together, clashes are inevitable. “If you want to understand an organization’s culture, just try to change it,” is how Edgar Schein puts it. He’s a professor at Massachusetts Institute of Technology’s Sloan School of Management.
It is important that you understand the power structures as well as the informal leaders who could be influential in your success. Keeping the informal leaders in the loop early on will do much to help control the rumor mill, quell fears and keep staff positive and focused on the business of the day. You need to understand the culture of the merging organization as well as your own in order to close the cultural gaps and move forward.
During the merger
When caught in the throes of a merger, the first human reaction is fear. Without the benefit of information, employees are left to worry about their job status and security.
Will I lose my job? Will I be demoted or asked to do something I’m not prepared for? It is essential that your employees learn about significant events sooner rather than later and certainly before others outside the organization, including the press.
To avoid the paralyzing effects of unwarranted fear, talk with employees early in the game and talk often. To facilitate this communication, many companies find it helpful to create a transition team made up of leadership from both organizations who are available to staff and can answer questions when they come up.
Other companies have found success in holding periodic “town hall” meetings where everyone is updated at the same time. Regardless of the method you choose, care should be taken to answer every question as completely and honestly as possible. Be clear about what you can and cannot share, but assure people that they will be kept informed along the way.
Often during a merger, staff changes are necessary. If staff does need to be cut, do it quickly and then follow up with a program to support the staff remaining after the event.
People who keep their jobs after a significant layoff often feel guilty and depressed about being “survivors.” Additionally, remaining staff shuffled into new positions or departments can feel a great deal of anxiety and stress adjusting to new personalities, new work loads and new managers or co-workers. To keep these employees positive and productive, it is important to recognize the inevitable emotional reactions to such change and provide the necessary support.
After the dust settles
Too much chaos and unresolved anger can cause good employees to take flight in the wake of a merger. In order to keep your valued staff from jumping to a competitor when you need them most, it is essential to keep your key people challenged and feeling valued in their work environment.
Ask them for their ideas; help them feel like a member of the team and an important part of achieving the new organization’s goals. Take time to reassess their skills and offer educational opportunities or additional projects that they find meaningful and that offer opportunity to provide greater value to the organization.
Dealing with the emotionally charged environment throughout a merger can be overwhelming and it can be tempting to avoid addressing the issues and instead burying your head in more comfortable areas. But whether you choose to delay or avoid dealing with human issues, it is important to realize that the attitudes and fears of your staff are not lost on your customers.
How your staff is feeling about the new company will influence the impression they leave with everyone they interact with – including your customers.
Through ongoing open communication and leading by example, your management team can create a positive environment and project confidence in the new organization so that your employees don’t consciously or unconsciously communicate the wrong impression to your clients.
Your management team can calm the new atmosphere by demonstrating through words and action that they are committed to the new organization and by taking care not to unwittingly send signals of division. Holding too many closed-door meetings causes fear and dread among staffers. Management should keep them to a minimum or take them off-site.
Mergers are never easy, but taking care to understand the human issues and address the fears and concerns of your staff through honest, ongoing communication will greatly improve your organization’s chance of a smooth, and ultimately successful, merger.
