Make Or Break: How To Manage The Transition Period In A Merger Or AcquisitionOctober 29, 2020
At some point in your career, you’ll probably be involved in a merger or acquisition. Perhaps you have already. If so, you’re participating in an important milestone in the growth trajectory of any company, but one that is often misunderstood. As I’ve discussed in my two most recent Forbes Agency Council articles, planners of mergers/acquisitions need to take into account the values of the merged companies, or else the marriage won’t last. This is especially true after you announce the merger, roll up your sleeves and manage the transition period.
Too often, businesses declare victory when they announce the merger to the world. After all, when you put a public stake in the ground, you’ve reached the point of no return. The merger has to work, right?
Wrong. A merger can easily go off the rails unless you do a few things during the crucial transition period.
Appoint someone to manage the integration on a daily basis.
Even when mergers run smoothly, getting two cultures integrated well requires managing a ton of details. How do you merge two teams that share the same client? What’s the game plan for keeping the newly merged company up to date on your progress? You don’t want your CEO mired in these essential but time-consuming details. It’s critical that you appoint someone who believes in the shared values of the two companies — someone who lives those values and will apply them when making decisions about resolving issues that inevitably arise.
Identify your influencers.
Here’s the reality of a successful transition: You need to find the influencers across teams that will help communicate and rally behind a successful merger. Mergers succeed from the bottom up, not the top down. In every office, teams of people who don’t know each other well need to learn how to work together. They probably don’t know it yet, but if you’ve done your job to set them up for success, they have something important going for them: They share the same values and attitudes.
Influencers on the ground are crucial to helping them realize this. They’re often well-respected managers who’ve gained the loyalty of their teams. I think it’s critical for the person in charge of the integration to enlist the help of influencers to ensure that their people mesh well based on their values and goals. Communicate with them more often and on a personal level. Get them on board, and keep them motivated to succeed.
Communicate early, often and in a focused manner.
Mergers and acquisitions raise questions — a lot of them, starting with, “What does this change mean to me?” Many M&A teams prepare for those questions by developing FAQs and other documents leading up to announcement day. But the secret to communicating well is to frequently communicate the progress of the merger. Show every employee how things are progressing against defined goals. But there’s something else that needs to be done from the top down: Explain to employees how the merger reflects the shared values of the two companies involved. Identify those values, and hold yourself accountable to them in your words and actions.
In addition, if you are part of a company that acquired another one, you need to bear in mind some special considerations during the transition period:
- If you believe that buying another company means that everyone else needs to adapt to you, you are in for a big surprise. Your way is not always the best way. Be ready to learn from your new team. If you share the same values, submerging your ego and learning should not be a problem, but doing so may not come naturally. Be mindful.
- Expect conflict — it’s going to happen. If you have two businesses that are managing the same account, you may run into conflict. Who gets to manage the account? Keep in mind you need to consider the long-term impact of the team’s values and culture with these decisions. And if you are aligning around values, these decisions won’t be as hard as they need to be.
You know the old saying, “Don’t sweat the small stuff”? Managing a transition is one time when you want to sweat the small stuff. I share more insight in my forthcoming book, The M&A Solution: A Values-Based Approach to Integrating Companies.