Focus on People to Get the Most out of Mergers and Acquisitions
Ignite! Newsletter—April 2009 Article
FOCUS ON PEOPLE TO GET THE MOST OUT OF MERGERS AND ACQUISITIONS
Mergers and acquisitions offer both challenges and opportunities. The key to success is making sure that
your people strategy is as strong as your business plan. It’s a one-two combination that makes sure the
results anticipated from the merger or acquisition materializes. When leaders take the time to think
through the people side of the process as carefully as the financial process, they can leverage all of the
strengths, assets, and goodwill of the old business by making the most of the existing employee and
Leaders play a pivotal role in determining the success—or failure—of a merger or acquisition. Everything
that a leader does has the potential to increase commitment, passion, and accountability—or to
decrease it, according to Chris Edmonds, a senior consulting partner with The Ken Blanchard Companies.
That’s why leaders have to recognize that they are not just managing productivity. They are managing
As Edmonds explains, “You want to have leaders proactively managing more than just people's hands,
and what those hands can deliver for the organization. You also want to engage people’s heads, and
their hearts, and their spirits. If you focus on those three things—head, heart, and hands—you’re
probably going to be having different conversations with the people who report to you, including those
that allow employees to pose questions and to express their concerns and fears—or even to express
their enthusiasm and optimism about some of the new things that can be coming down the line.
“Employees are really smart. They don’t miss much and they often have a better handle on what’s going
on in an organization than senior leadership, who may be more removed from what is happening day-
to-day within the organization. Yet organizations don’t take advantage of this resource the way that
People thrive on involvement and communication
During times of change such as a merger or acquisition, when people from two very different cultures
have to learn to work together, leaders need to address some of the typical concerns that employees
have. For example: Is my job safe? Who will I end up reporting to? Who will become the new power
centers in the organization? How will we mesh teams together from two different cultures? Will these
cultures work well together?
If leaders don’t help their people get beyond these concerns, they can create a culture of active
disengagement that can poison the organization at a critical time when they most need their people.
This loss in employee involvement can block, and can even jeopardize, the integration required to make
a merger work. That’s why it is so important for senior leaders to address concerns and include all
employees in the process. When people are involved in these types of conversations, they bring their
creativity and discretionary energy to the integration effort.
“When you look at organizations that are acquired or merged, there is a period of grief and mourning
that occurs because the old ways are gone,” explains Edmonds.
“The old customers are gone; the old products and services mix is gone. You have to give the people
who are being asked to shift to a different way of working, the time they need to mourn the loss of the
A case in point
As an example, Edmonds points to his recent experience working with a small office that had been
merged into a larger company. The larger company asked The Ken Blanchard Companies to come in and
lead a training and development initiative for this group.
As Edmonds walked into the building he noticed that all of the employees of the acquired company
were wearing their new company name tags—which was required for security purposes—but that they
were attaching them to their old company’s neck lanyards. Not a single person in the room had one of
the new lanyards that Edmonds had seen in other offices.
“That’s when I realized that these people were still not over the acquisition yet,” Edmonds explains.
“Because these people had not been given the time to talk through how the acquisition was going to
work, find out who the new players were, and because they had not been involved in the process, they
were holding on to the past.”
In a case like this, Edmonds recommends that executives, instead of announcing, “Congratulations, you
are a part of this company now, and all decisions that were previously made in your local office are now
going to be made in another state,” allow people to air their concerns.
“We coach senior leaders to be very proactive about explaining their decisions in times of change: Here
is the decision, here is what we have decided, here's why, and here is how you have helped us.
“You want people to feel comfortable talking with their peers and their bosses about their fears, about
the opportunities that exist, and about some of the challenges that the organization is facing.”
Help people engage with the change
Successfully harnessing people’s energy at critical moments of change is essential to the long-term
success of the organization. Creating new high-performing teams from people accustomed to very
different work cultures can be a challenge. Leaders can accelerate this process by putting into practice
the key elements of team formation including chartering and making sure that everyone is heard.
Programs specifically designed to lead people through change can be especially helpful in a post-merger
When people are given a chance to influence decisions and make suggestions they respond with greater
buy-in, passion, and connection to the change. When that change is a merger or acquisition, the
business objectives may be the economies of scale, improved productivity, and increased shareholder
value that the merger was intended to create. But the key means to achieving those ends are keeping
your employees involved, respected, and feeling part of something growing and meaningful.