Mergers and Acquisitions: How to Properly Prepare Your Employees

by Mike O'Neill

If you’re planning a merger or acquisition, take a moment to put yourself into the shoes of your employees. How would you feel if you heard another company was acquiring the one you work for, or that your place of employment was merging with another? 

Likely, these actions are going to raise a great many questions throughout your workforce.  To help ease your employees’ doubts and fears, you’ll need to understand how your employees feel. 

For your employees, the merger or acquisition isn’t about the bottom line or growing the business like it is for you. To them, it’s merely about their place in this new world. They’re wondering if they’re going to fit into this new company, will they have a new manager, or if they’ll even have a job when everything is all said and done. 

This fear can devastate morale and derail productivity, which is something you can't afford to let happen.

Keep reading, and we'll give you a few tips to help you properly prepare your employees during a merger or acquisition.

Preparation Tips for Mergers and Acquisitions

It’s perfectly normal for your employees to feel apprehensive about your company merger or acquisition. Understanding how the changes impact your employees can alleviate some of those stressors during the transition period.

Align Company Culture

One concern that upper management may overlook is how well each company's cultures will mesh and intermingle. Between 70 and 90% of all mergers and acquisitions fail within the first few years. And, research published in the International Journal of Innovation and Applied Studies states that one of the primary reasons for these failures is the misalignment between company cultures. 

Company culture consists of the values and behaviors your workforce follows to complete company goals. Suppose the two cultures you're merging are polar opposites and not in alignment with one other. 

In that case, you could easily see miscommunication between team leaders and lack of clarity around operational strategies. 

Evaluate the cultures in all merged or acquired companies. An evaluation helps you identify any potential problems that may arise with merging the different cultures so you can minimize any adverse effects before they happen — resulting in a smoother transition.

Align Objectives and Goals

A sure way to stress out employees and steer the company right into the failure zone is adopting the “we bought you, we can do what we want, and you’ll do as we say” type of attitude. Having this attitude is a sure-fire way to create a dividing line between the two companies — keeping them from working together effectively. 

When goals get set without input from the acquired company’s team leaders or employees, it’s easy for them to feel like they don’t belong and they’re not valued. 

Bring team leaders together from all merged or acquired companies to establish guidelines, goals, communication plans, and objectives that will benefit all employees. Team leaders should define three to five meaningful, measurable, and memorable objectives for all employees to work towards.

Collaborating as a team is the best way to dispel the "us versus them" attitude and helps employees feel like their opinions and voices are valued.

Plan Ahead for Change Management

Another reason mergers and acquisitions fail is due to poor management. How you interact with existing and new employees to manage the changes can make all the difference between a successful merger or a failure. Frequent communication is critical throughout the transition.

As you go through the transitioning process, you'll need to address some workplace issues. Establish a timeframe for addressing these issues in the communication plan we discussed previously. There is no set timeline here since each merger or acquisition is never the same and has its own set of needs. 

Some things you'll want to address in your communication plan are:

  • Determine the organizational structure and create an org chart of the combined companies. Figure out which jobs change, decide job titles, and structure leadership hierarchy. Each employee needs to know whom they report to and who is above them. 
  • Make sure you have the right employees in the right jobs. Determine which team leaders you need and what their key roles are.
  • Splitting up or doing away with overlapping or unnecessary job roles.
  • Differences in pay, changes in payroll or direct deposit companies, and changes to benefits, if any. 
  • Changes made to employee performance evaluations and reward systems. 
  • Consider changes in company culture and processes that result from the merger.

Being transparent and communicating these things with your employees can significantly impact the success rate in combining companies.

Communicate Regularly

Communication from leadership within each company is critical to a successful and less stressful merger. Your employees should always feel like they have more than enough information from you rather than not enough. Don’t be afraid to over-communicate.

Keep employees up to date. Frequent regular communication prevents workplace gossip and rumors from taking hold. Remain positive and encourage your employees to stay positive. You don't want them to spend time worrying about negative news and rumors, which can lead to discouragement and poor productivity.

Continue to talk to your employees about the merger or acquisition. Be open, honest, and transparent about the situation. Consider holding a meeting and opening the floor to discussion or a question and answer session. Stay focused on the discussion and remain positive.

You’re Not “Going It Alone” 

There’s a lot to manage when you’re preparing for a merger or acquisition. You have many uncertainties, and your list of things to do never ends. You’ll likely have concerns about employee morale, operations, and logistics throughout the entire process. As you face this massive transition, you should seek an expert for help.

I understand how overwhelmed you feel, and that you want to make sure you’re managing your team leaders and employees to the best of your ability throughout the merger. As a key leader, you have a lot on your plate, but we can help.

With decades of experience helping business leaders tackle tough challenges, we know how to guide you through the obstacles you’ll face throughout the merger, and long after.

When you sign up for our Get Unstuck And On-Target Workshop, we’ll help you identify your challenges and opportunities, prioritize the ones that’ll have the most impact, and narrow them down into the three most significant things for you to implement to see improvement. 

In just a few short hours, you’ll narrow down hundreds of potential decisions into a single, executable plan. You'll walk away with a process you can use every time you need to narrow your choices and find the best way forward.

Sign up for your seat in the workshop now.

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