It's no secret that plenty of mergers don't work. For all the good reasons that drive mergers—new efficiencies from combining systems and processes, market synergies, scale, etc.—they won’t add up to an advantage if the merging corporate cultures don’t mix and employees aren’t engaged in the new venture.
“Companies will do their due diligence on finance and all the things that are important, but often there isn't a plan for people,” says Pauline Greenidge, whose book, A Grand Dinner Party—Setting the Table for Employee Engagement Through Mergers and Acquisition, was inspired by her personal experience during the Suncor/ Petro-Canada merger announced in 2009.
Ignoring the people dimension in favour of integration and cost-cutting can sap the life from the day-to-day business and trip up revenue momentum.
Greenidge—who has built a consulting business on her 15 years of human resources experience with companies such as Coca-Cola, KPMG, a farming cooperative and Petro-Canada—says the key message for companies on the merger and acquisition trail is to “have a plan for the employees.”
In Calgary, the largest firms entering a merger or acquisition (or for that matter any other business disruption such as downsizing, succession, etc.) will outsource the employee engagement component to a consulting firm, but most companies tend to go it alone.
Here are Greenidge’s five principles navigating disruptive transitions:
- Have a clearly thought out engagement plan for employees before entering the merger. “If you want to get to the desired transformation, you have to bring your people along with you,” Greenidge says.
- Define and communicate the organization’s mission and values clearly and consistently.
- Communicate the values that each company brings to a merger. “When you don't communicate that, you have a whole population of people that you're not even on-boarding towards the goals.”
- Actively cultivate the culture. “In research and talking to [sources] for this book, it tends to be the acquirer’s culture that becomes dominant. Very few transactions are actually mergers. It's more often a takeover. And if that's the case, you do need to declare your culture.”
- Make sure that you have a way of measuring sustainable results. “You don’t need two accounting departments, two supply chains, etc. You get rid of those redundancies, which is synergy. But synergy is an outcome, not a goal. So the point there is to make sure you have a way to measure sustainable results.”