Managing Mergers Successfully

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Merger mania is a rage that is not abating. As the business world continues to find like-minded organizations to merge based on their complementary abilities, successful managers must learn how to manage through the turmoil of change.

While about the financial aspects of merging companies,  to the human element. management has to be skilled at working with all the people involved in the newfound operation.

Key Elements of a Successful Company Merger

Human resources guru Jeffrey Sonnenfeld says in the Ottawa Citizen online article "Managing Post-merger Consolidation: "Take at least as much time as you spend with your financial analysts and spend it with your employees. People care about where they work. Make them strategic partners.

Below are some suggestions on how to manage the staff of a newly merged company:

Get People to Talk

Bring all the people in both companies together as early as possible. Openly and frankly discuss the perceived benefits of the merger. If Company A has strength in sales and it is absorbing Company B because of the latter's distribution network, make sure the distribution people at Company A listen to (and learn from) their counterparts in Company B. Likewise, Company B's sales force needs to listen to, and the salespeople at Company A.

Cut Staff in a Fair Manner

Despite your best efforts to make your employees strategic partners in the business, there will be an overlap in human resources. As a manager, reduce the number of people working for the new company because of the cost savings inherent in combining redundant tasks. The idea is to let go of those individuals least equipped to contribute Make sure you look at both companies' staff equally while who are the "best" people you don't want to lose a great person from Company B so you can keep a mediocre person from Company A.

Be Honest and Upfront

People appreciate frankness even in a go. While it's painful for some employees to find out that they will be out of a job, it's much kinder to let them hear about it upfront than to find a "pink slip" in their next paycheck. 

Remember: People Drive the Company 

The article "Mergers and Acquisitions: The Human Equation from The Change Management Group says: "Progressive corporations have realized that a merger is in name only without the positive support

Merging two companies with their different policies, procedures, and cultures can be a source of stress for all involved. The "survivors" from both companies have to deal with new people, new procedures, possibly more work, and co-workers who had become close like family members.

As a manager, you need to be realistic in your workflow planning. Plan for people to be less productive than normal while they deal with the changes. Expect to lose some good people who are not comfortable with the new organization. Give yourself and your department time to work through the changes and get back up to full speed.

Departmental Perspectives

A merger affects different functions differently. Each function is important to the success of a merger. Consider the way a merger affects these other departments and then use those lessons to minimize the same effects in your department:

  • IT/IS/MIS: Merged companies may need to get their systems harmonized in record time, and smooth integration of operations can be critical to the company's new public image.
  • Human Resources/HR/Personnel: The first issue to resolve is whether to combine your company's HR function with the merging company's. Your answer in most cases will be yes.
  • Product Management/Operations/Marketing: that after a major merger, the product management function in the controlling company off stride a bit.

Walk the Talk

Engaged managers truly believe that people are their most important asset and need to treat them. A merger or an acquisition gives managers an opportunity to excel in their roles by being honest with their employees, keeping them informed and giving them all the information they need as early as possible. If you keep these things in mind, you'll end up keeping more of the good people from both companies.