Part 1

When two companies merge, it’s not just brands coming together, it’s cultures, ways of working, and expectations. In a high performing business, loyalty is tribal. It’s the “secret sauce” of any successful business. A merger will often, therefore, lead to conflict and resistance to change which can subsequently directly impact both morale and performance. The consequence is distraction for both parties which can prove costly to both the acquirers and the vendors, particularly when a significant proportion (potentially up to 50%) of their enterprise value is held in deferred consideration, or “earn-out”.

Without controlling the integration process, competitors and head hunters will soon smell blood in the water and will quickly, often deliberately start dismantling your business. 

Here are some of the most common people challenges associated with business integration:

• Cultural clash: This is a major challenge in many business integrations. Employees from both brands will have different values, beliefs, and working styles. This can lead to division, misunderstandings, conflict, and a lack of trust.
• Resistance to change: Integration usually involves significant change. This may include changes to job roles, responsibilities, job security and working environment.
• Loss of identity: Employees may feel like they are losing their identity and values when their brand merges with another. There may be a sense that their proposition and purpose has been diluted and that their “journey” has effectively ended. This can lead to a negative spiral of morale and productivity. 
• Communication Vacuum: Clear communication is essential for any successful integration, but it can be difficult to communicate effectively between two large organisations with different cultures, infrastructures and geographies. Any vacuum in communication will never end well.
• Lack of employee engagement: If key staff are not engaged in the integration process, it is more likely to fail. They must believe in the new journey and ideally be involved in the planning and execution of the integration process.

Leadership & planning are integral to overcoming these challenges. A coherent communication plan should be a central component of the broader integration plan. Leaders will need to step up and create ambassadors throughout the new, enlarged organisation who can then act as evangelists and help control the narrative throughout the complex process of integration. People rather than Process will typically determine the success of your integration.

In future posts I’ll share some more specific guidance to overcome some of these challenges. In the meantime, feel free to message me directly for further insight into post-merger integrations & some further ideas on how to best prepare.