5 things great leaders do during mergers & acquisitions

5 things great leaders do during mergers & acquisitions

According to a 2016 Merger & Acquisitions (M&A) survey by KPMG, 91% of companies planned to initiate at least one acquisition in 2016. That’s a significant jump from 63% in 2014. These transactions can be highly stressful and a lot of work and sweat for all involved.

Executives would love it if they could just snap their fingers and all M&A activities transpired successfully and quickly. The two companies would merge seamlessly, with a shared vision, merged cultures and technologies and happy customers.

Unfortunately, that rarely happens.

merger & acquisition meeting

It’s not all wine & roses

The ultimate goal of M&A is a single, thriving company that is more effective, profitable and lucrative than the companies were individually. However, as mergers integrate companies with vastly different values and cultures, a range of factors can derail the process, from price and regulatory issues to the failure of leaders to agree on roles or a new company name.

Read that list again. What issues are missing? The ones related to staff. Employees are central to the success of an M&A, and as such, they often have significant concerns that, in the rush to get all of the technical aspects of the merger completed, are overlooked:

  • Resistance to change
  • Lack of communication
  • Confusion and frustration
  • Lack of confidence in management
  • Fear of the unknown
  • Lack of support


What do highly effective managers do during these unsettled times – before, during and after the merger –to address these issues effectively, engage their employees and work toward a successful outcome?

The 5 things great managers do well during a merger

It’s simple actually. Effective managers remain extremely committed to their employees, both those they manage currently and those they will oversee after the merger. Their goal is to eliminate those negative internal factors before they become a significant problem. They do this by:

  • Listening and acting on what they hear. Executives are often far removed from the daily aspects of the business they run. This includes knowing the true effects of the merger on employees. Strong leaders and their managers spend the necessary time in the field listening to employees. They learn what excites them about the merger, as well as what worries them about the change. They also meet regularly and often with employees to solicit their input. They do this with the understanding that if challenged appropriately, they may need to adjust their plans.
  • Communicating regularly and often. Without proper communication, employees draw their own conclusions, which may be completely different from reality. Strong leaders communicate frequently and through a range of channels, and a communication plan is a central part of their M&A plan. They don’t sugarcoat, although they do try their best to message with a positive spin. They share what they know and what they’re excited about, as well as what they don’t know. And, they respond in a timely manner to questions and issues. This level of openness goes a long way toward alleviating some of the pressure their employees are feeling, as they begin to see that information isn’t being kept from them intentionally.
  • Engaging their employee activists. Every organization has water cooler conversations. This is where true information and rumors are often confused. Every organization also has those employees who are well connected and seen by executives and staff as being highly trustworthy. As part of their communication plan, successful leaders bring these individuals into their inner circles, and they share information with them as appropriate. They also ask them to share what they’ve learned with those around them, to spread information and end the rumor mill before it begins.
  • Sharing the structure of the new organization. It’s not enough for the executives of the merged organizations to create new org charts, goals, values, vision and policies and share it just among themselves. For long term and lasting success, effective managers share, post and live these documents and plans, and they ask their staff to do the same. This simple step, which is often overlooked, goes a long way, by answering the “fit” and “what’s the plan for X?” questions held by wary employees of both organizations.
  • Developing a shared culture, where possible. It isn’t always easy to combine cultures. Sometimes, in companies with very different sets of capabilities, like Disney-Pixar for example, it’s necessary to allow multiple cultures to coexist. There will be overlap, but forcing technical associates to accept the norms of marketing associates and vice versa, isn’t always successful. Good leaders inspire their employees to step out of their comfort zones and the norms they’re accustomed to, and try their best to accept the new ones, which they’ve (the employees) often had a hand in creating. They lead by example and take the changes to heart themselves. Perhaps that means changing their work schedules or being open to remote work situations.


There are strong leaders who make M&A work

According to the Harvard Business Review, the challenges of executing a successful M&A are substantial: 70 to 90% of mergers fail to meet their objectives. Merger success can’t be left solely to the executives, many of whom base their decision primarily on price and how the growth will benefit the firm. They don’t concentrate enough on the impact on the employees.

Middle managers play a critical role during an M&A transition, as it’s this group that is on the floor every day, working, listening and communicating with employees. Effective executives know that their efforts to retain these managers and keep them highly engaged, are critical to the success of a merger.

Those leaders who are highly effective before, during and after a merger adjust as necessary to the situation at hand. They flex and respond to the needs of their employees, as well as the business, playing the roles of strategist, cheerleader, executor and psychiatrist, to keep employees working hard, energized and looking forward to what’s to come. They are experts at balancing the input from those around them with the needs of the new organization, making decisions that best serve the interests of all involved.


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