Many corporate acquisitions (M&As) fail to realize their wished-for synergies. Sometimes mergers fail to create value and half may actually destroy value. I am going through a merger and was wondering what we could do to have successful mergers
1. Merge as equals. People end up saying that we acquired you and hurt the ego of the company that got merged. If cultural differences are far apart, the merged companies need to compromise and come to a middle ground.
2. Be aware of conflicting corporate culture.: Generally the due diligence processes focus more on the corporate matters (market synergies, service offerings, financial projections, legal and regulatory matters, etc.) and overlook the people and cultural challenges. Management consultant Rick Maurer likens corporate mergers to the marriage of two single parents each with their own children — “just because mom and dad are so in love, they fail to see that the kids don’t get along.”
3. Change catalyst In time, when the “stronger” partner tries to thrust its culture on the new combined organization, employees of the “weaker” partner resist change. The weaker partner feels oppressed. Have you identified change catalyst and see whether change catalysts can be used to create good will?
4.. Trust Building: Employees of the “weaker” partner or the acquired company tend to distrust the management of the “stronger” partner or the acquiring company. Fears of layoffs and new power equations in the merged entities often result in the exodus of key talent from the acquired company. HR has important role to play in times of merger not only in terms of words used , but also needs to have the intent and the required action.
Some good books are The First 90 Days: Critical Success Strategies for New Leaders at All Levels