Managing Changes in Mergers and Acquisitions

 

Managing Changes in Mergers and Acquisitions

Motivation and retention of key people in mergers and acquisitions

People-related concerns are the most important factors in determining whether a merger or acquisition will succeed or fail.  Leaders should be concerned about how to keep their teams motivated and engaged during the implementation of mergers and acquisitions.

There are a number of reasons why key employees in organizations struggle to be motivated and kept.

 Findings - One of the main reasons why key person motivation and retention are so tough to master during Merger and acquisitions is that often damage is done before the deal is closed. It can be tough to keep up with the speed at which Merger and acquisitions are completed, making it difficult to rapidly and efficiently identify critical employees to keep. To keep the right individuals, the correct packages must be devised, and communication with both retained and non-retained staff must be maintained.

Practical implications - Keeping key employees motivated and committed can help you retain them not just throughout but also after M&A transactions. It is critical to develop specific integration plans as soon as feasible, which include key person identification and retention program design, with the latter assisting in attaining retention goals. These factors, as well as other deal-related difficulties, must be adequately communicated.

Effective Communication in mergers and acquisitions

 One of the most important elements of successfully facilitating a company merger or acquisition is effective communication. While this may seem relatively basic or obvious, the truth of the matter remains that communication can make or break a merger or acquisition. While successful, transparent communication can create a smooth transition, ineffective communication will cause disruption, confusion and insecurity that may cause a merger or acquisition to fail.

components of effective communication 

Frequency
Consistency
Transparency
Honesty
Efficiency

 

Cultural integration in mergers and acquisitions

 Addressing culture when two companies integrate A rigorous program with clearly stated objectives should be put in place to address cultural integration. Too often, culture is presented as a wooly and soft topic. When that happens, executives tend to slight the issue. This can generally be avoided by linking the cultural program to measurable business results. There are several steps to doing this:

• Make culture a major component of the change management work stream.
• Identify who "owns" corporate culture and have them report to senior management
• Insist that the cultural work focuses on the tangible and the measurable.
• Consider the strengths of both existing cultures, not just the weaknesses.
• Implement a decision-making process that is not hampered by cultural differences.
• Build the employee brand with a view toward how it will be understood by employees.
• Put people with culture change knowledge and experience on the teams that define the key interfaces in the new organizational model.

 

References

Gould, R., 2015. Mergers & Acquisitions: The Importance of Effective Communication. [Online]
Available at: https://www.gould-partners.com
[Accessed  06 December 2021].
Kummer, C., 2008. Strategic HR Review. In: "Motivation and retention of key people in mergers and acquisitions",. PricewaterhouseCoopers, Zurich, Switzerland and Webster University: Emerald Publishing Limited, pp. Vol. 7 No. 6, pp. 5-10.