Making Merger a Success

A successful merger requires the active participation and cooperation of all stakeholders.

      Rohit Manucha

Mergers are no mean feat, they are entered into after much deliberation, due diligence and change management endeavors from an organization and workforce perspective. Yet people in those organizations at times feel disconnected on account of the “cultural clash”.

Several aspects may affect an organizational macro/micro-culture, ranging from varying values framework, communication styles, leadership styles, ways of working, operating models, organization structures, employee experience & expectations, etc. Most of these can be addressed across prior-during-post merger and it should comprise of:

  • Encouraging open & honest communication between employees from both companies to foster a common understanding,
  • Establishing a clearly articulated vision and value framework of the merged company to ensure that all employees are aligned and understand what is expected of them,
  • Identifying and acknowledging cultural differences between employees from both companies and sensitively addressing any potential issues and working to find a common ground,
  • Encouraging employee engagement by involving them in the merger process and giving them a voice in shaping the new culture/way of working/ systems/ processes and policies,
  • Providing training and support to help employees adapt to the new culture and understand how to work effectively with their new colleagues,
  • Having leaders model the behavior and attitudes that they want to see in their employees and encourage them to do the same.

Thus, the top management, human resources function, line manager, and the employee himself/herself play a crucial role in making this transition successful by addressing any discontent in a timely and effective manner to minimize the negative impacts on the organization. Here are a few steps that can be taken:

Share information about the merger with employees and be transparent about the reasons for the merger and the expected outcomes. Keep employees informed of any developments and changes related to the merger. Be prepared to answer questions and address concerns.

Listen actively & encourage employees to share their feelings and concerns about the merger. Acknowledge their feelings and show that their concerns are being heard and taken seriously. Encourage employees to give feedback and suggestions for how to improve the merger process and consider implementing those suggestions when possible.

Provide employees with the resources they need to adjust to the changes brought on by the merger. This may include training, counseling, or other forms of support.

Create a sense of inclusion by encouraging employees to work together to make the merger a success. Provide opportunities for employees from different departments or divisions to get to know one another and work together.

Keep the lines of communication open & continuously monitor the progress of the merger and its impact on employees and adjust as needed.

Show empathy and understanding towards the employees during this transition period. It’s important to acknowledge that change can be difficult and unsettling and that different people will react differently.

Employees, thereby would end up being adaptive to the change and be willing to change, participate actively in identifying potential issues, and work effectively in the new cultural environment.

During my consulting stint, I had the opportunity to work on a merger project within the banking sector. While both companies were well-established in their own markets with strong customer bases, they believed it would be better for them to consolidate to improve their performance. Now, each had a varied culture which was prevalent in their banking practices and organizational culture. Thus, a key factor to ensure their merger becomes a success was to have their people adapt to the new culture and way of working.

To ensure this, they applied all the aforementioned points and as a result of these efforts, the merger was successful. The merged bank went on to become one of the most successful and respected banks. The merger resulted in a stronger and more efficient organization, with a more diverse range of products and services for customers, who were very pleased with this. The employees were satisfied with the merger and felt that their input and feedback were taken into consideration throughout the process.

Overall, a successful merger requires the active participation and cooperation of all stakeholders. Thus, by communicating openly, involving employees in the process, providing training and support, and leading by example, organizations can help ensure a smooth and successful merger.

Manucha is Chief Human Resources Officer at SIH-AGH, Dubai.  

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