U.S. corporations celebrated the new year with optimism and excitement after the passing of the new tax plan in December. Companies should be equipped with more cash on hand, which will lead to opportunities for growth and change. We predict more mergers and acquisitions.
Successful change management plays a key role in withstanding the turbulent nature of an acquisition or merger. We have recognized three common practices among companies effectively capitalizing on change during an acquisition.
Effective communication is the simplest and most overlooked of these three. People often dislike change. However, people are much more willing to accept change when included and informed beforehand. Imagine an employee who is the last person in the company to find out his job of 10 years is being altered. He is obviously going to feel betrayed. Now picture an employee given this information directly and asked for input in the process of redefining the job role. The employee will likely be less resistant and feel empowered to help create change. The key is to communicate directly and transparently with the people being impacted. Creating an open dialog early on will gain employee buy-in as well as valuable feedback to be leveraged.
In every acquisition, a select few individuals are considered highly valued assets due to their knowledge. Maybe it’s the accountant who has been with the company for decades and knows all the nuances of each company-specific process. Or perhaps it’s an employee in IT who is the only person who fully understands how systems are integrated. Knowledgeable employees can be a huge help during a merger when utilized correctly, but companies often don't engage knowledgeable employees early enough in the process. The work required to complete the merger is underestimated. The result is resistance and frustration which leads to knowledge leaving the company and integration delays. Leadership should engage knowledgeable employees when planning the merger to optimize synergies. When included in decision making, knowledgeable employees can become a strong advocate for change across the organization, resulting in change management success.
The most challenging of the three concepts is the successful merging of two company cultures. Each company has its own personality with strengths and weaknesses. Merging two cultures together presents a unique opportunity to combine the strengths and eliminate the weaknesses in the newly merged company. The result is a better culture together than either company had individually. Creating synergies takes effort from management to establish impartiality and respect for both companies. Leadership must first consider each culture's attributes as being different rather than better or worse, then identify aspects of each culture to retain and to remove. The last step is clearly and directly communicating the vision for the newly unified culture to the company. Make every attempt to highlight and encourage the positive behaviors being retained. The effort can be made through informal actions such as offering verbal praise and recognition in a meeting. The effort may also be made through informal actions, such as a presentation over the values driving the culture of the newly formed company.
With the approach outlined above for managing change, companies can better leverage the current economic situation to grow business while creating stability as the economy fluctuates.
