Five common mistakes that
subvert mergers
By Terry Bragg
New mergers are
announced daily. Although merging is a common experience, companies continue to
make five common mistakes that jeopardize their mergers or make the merger
transitions more difficult. The following mistakes are easy to make. By taking
the recommended actions you can avoid them, or reduce their effect on your
merger.
1. Moving too
slowly. Allowing things to settle down before making changes is dangerous.
Moving too slowly increases the uncertainty and anxiety felt by employees. Many
companies believe they can conduct business as usual while they figure out the
best course to take with the merged companies. This is a big mistake because
once employees and customers smell the scent of a merger, business is never the
same.
Heed this warning: do
not promise that things will not change. The promise is untrue and no one will
believe it anyway.
Instead of moving
slowly, management is better off moving quickly to make critical changes in
policy and personnel. Inform employees about where they stand and what they can
expect after the merger.
Quickly evaluate
employees and make decisions on whom to keep and who to terminate if reductions
are necessary. Weed out poor performers and actively recruit high performers to
stay on. Bailout starts quickly and is contagious. Be proactive in showing
employees the benefits of sticking with the company. Don’t assume people will
stay.
2. Not having clear
goals and plans to achieve them. During a merger, confusion increases. As
employees shift their attention to self-preservation, they are less productive
and they lose sight of company goals. Conflict increases as workers attempt to
protect themselves and their turf. Taking care of "me" becomes more
important that taking care of the company.
Goals provide a sense
of direction and keep workers focused. Without short-term goals employees lose
sight of what they are supposed to be doing.
Create goals related to
the merger integration. Design aggressive plans for achieving the goals that are
set. Achieving goals creates wins for the merged organization, and gives
employees an opportunity to celebrate. Goals should support the long-term
objectives of the merger. Set specific goals to:
• Manage the merger
transition
• Address people issues
• Stabilize the organization
• Maintain the financial bottom line
• Stay focused on sales and customer service
3. Skimping on the
merger integration budget. Companies often think they can save by cutting
costs on the merger integration process. This is not the place to skimp.
Management often miscalculates the length of time the merger will take, and the
complexity of the merger. Plan to invest in the change process. Make sure you
have a sufficient budget to support the people and resources necessary for the
merger integration process. Train employees on the dynamics of mergers, provide
stress management training, and career counseling. Educate managers about
mergers. Even experienced managers may be new to the changes involved in
mergers. If necessary, hire experts to advise you and assist with the process.
Invest time and money
in evaluating workers’ strengths and weaknesses and assessing how they will
fit into the new organization.
4. Declaring the
merger is complete before crossing the finish line. Management wants to get
on with business. They want to declare victory too quickly. Before proclaiming
the merger is done, make sure you resolve the people issues, and establish
stable work processes. Declaring victory too soon may cause employees to leave
and may endanger the long-term success of the merger. The average merger
integration takes twenty-four months. Prematurely declaring that the process is
finished after a few months only frustrates people and makes the process more
difficult. Try to accelerate the change process but be realistic about the
difficulty and time it will take.
5. Not clearly
defining roles, responsibilities, and working relationships. During a
merger, you stir the corporate pot. People are worried about their short-term
and long-term futures. Without clear responsibilities and lines of authority,
workers go into idle mode as they wait and see what happens. They hesitate when
making decisions because they do not understand the rules for making decisions,
the rewards for making correct decisions, and the penalties for making mistakes.
Assess the organization
quickly. Define lines of authority and organizational structure so employees
know who they work for and what you expect from them.
Avoid these common
mistakes and you will increase the chances of your merger succeeding. Make the
mistakes and you may end in the rubble of mergers that fail.
Terry Bragg and Peacemakers Training
offers a variety of tools for promoting, maintaining, and recognizing excellence
in your workplace. We also offer tools for helping you achieve and
maintain personal excellence. To learn more about these tools, click here:
Tools for Workplace and Personal
Excellence
To find out more about Terry's book, 31
Days to High Self-Esteem, click here: 31
Days to High Self-Esteem
To learn more about onsite seminars and
workshops for improving interpersonal relationships, resolving conflict, and
promoting and maintaining excellence in your workplace, click here: Seminars
& Workshops
©2000 All
rights reserved Terry Bragg•Peacemakers Training
Terry Bragg runs a company called
Peacemakers Training in Salt Lake City, Utah, and is the author of the book 31
Days to High Self-Esteem. He works with organizations to create a workplace
where people want to work, and with managers who want their people to work
together better. If you want your organization or your people to have more
energy, more trust, more respect, and more meaning, please contact him at:
Peacemakers Training
5485 South Chaparral Drive
Murray, Utah 84123
801-288-9303
E-mail: terry@terrybragg.com
Web Site: http://www.terrybragg.com
Back to Free Article Index
Subscribe to our Free
Bragg's Business Briefs Email
Newsletter
