Typically, the goal of merger or acquisition (M&A) is the formation of a more successful, efficient, productive, and profitable company.
The employees of the merging companies, however, do not always share the same level of enthusiasm as the executives or stockholders that are leading the deal.
In fact, failure to take into account the impact and stress on employees during M&A activity may lead to the loss of talent, ultimately putting the success of the entire venture at risk.
Fortunately, with careful planning and strong leadership, steps can be taken before, during, and after the merger or acquisition to minimize stress, maximize morale, and increase the company’s retention of key talent.
- Communication: The uncertainty resulting from a pending merger or acquisition can lead to assumptions made by employees that may be unfounded. It may not always be possible to advise employees of a pending merger or acquisition given confidentiality or other concerns. However, to the extent possible, frequent and open communication with employees gives executives and managers the opportunity to assess employee reactions to information while dispelling any false rumors before they can negatively affect morale. The presentations of information and requests for feedback should be offered to employees through multiple and diverse channels such as all-hands meetings, intimate round table discussions including both executives and employees, team meetings with managers, and even anonymous employee engagement surveys.
- Empowerment: Strong executives understand that a successful merger depends on keeping their management informed so that they can, in turn, keep the employees engaged. It is important that management be kept as informed and up to date as possible concerning a pending merger or acquisition.
- Culture: Occasionally, the cultures of merging companies are similar enough that culture will not be an issue. More often than not, however, there are distinct differences that will need to be worked out. If the situation involves the acquisition of a smaller company by a much larger company, the culture of the larger company will usually prevail, but it is still valuable to request feedback and suggestions from all affected employees. If the cultures of merging companies are in direct contrast to one another due to differing capabilities, locations, or markets, the best solution may be to allow the cultures to coexist. Regardless of the specific situation, an openness to suggestions as well as the ability to flex can go a long way in keeping employees from feeling unheard and unimportant.
- Opportunity: Focusing on the positive aspects of a merger or acquisition can be an effective strategy to increase employee enthusiasm. Any opportunities for promotion, education, training, relocation or changes to career paths made possible by the deal should be highlighted. After changes to the corporate structure and rebranding activities have been completed, any new organizational charts, corporate policies, and/or redefined value, goal, and mission statements should be shared with all employees and publicly supported by executives and management.
Strobl PLLC is a team of experienced and trusted lawyers that can advise on all legal matters relating to mergers and acquisitions. For more information, visit Strobl online at www.stroblandsharp.com or on LinkedIn.