Three things to consider before merging
Teamwork. Collaboration. Stronger together. Join forces. Streamline. Efficiency. These words might sound great, but if you’re using them to describe a merger or acquisition, they may sound like “corporate speak” to anyone who isn’t on the inside. No one wants their promising merger to flop because of poor public reception, unhappy employees or unanswered media questions. How can you make sure yours is successful?
Sometimes, acquisitions are necessary – one company can’t always make it alone. Other times, mergers make sense to remain competitive with a larger player. But when you’re making a decision like that, it’s important to consider more than the bottom line. Consider all the things that could eventually affect that bottom line – employees, media and public sentiment, and customer feedback.
It may seem like a buzzword, but it’s important to consider whether all employees will be happy in the newly merged company. Your organization may not have a specifically defined culture, but consider how you operate:
- Are employees required to keep specific work schedules, or is there flexibility?
- Is remote work allowed or encouraged?
- What’s the after-hours policy?
- Do employees engage socially?
- Does the office offer food, workout equipment or other on-site perks?
- What’s the PTO policy?
- How do you communicate — texting, emails, phone calls, in-person meetings, etc.
If the two companies have differing cultures, decide which aspects of each you’ll want to protect. But be wary of forcing a culture on someone. For example, if one company offers work-from-home Fridays, employees will likely resist being required to come in every Friday as part of a recent merger. However, a slight change to the PTO policy – such as eliminating specific sick days and rolling all paid time off into one pool– may be less of an adjustment. The important thing is to understand what’s important to your employees and plan accordingly before merging.
Headlines and hard questions
The “powers that be” in each company may consider the merger all good news. But there are always difficult questions to answer – from the media, from employees, from customers and from the general public. Consider how you’ll address things like:
- Will there be layoffs or demotions?
- Will customers/clients experience displacement (closure of locations, changing phone numbers, loyalty program adjustments, eliminating certain products, etc.)?
- Will any other groups be affected? Consider things like closure of a headquarters in one city to consolidate in another – that affects the municipality, workers’ families who may need to move to follow a job opportunity, etc.
Chain of notification
Some people need to know first. Employees should not hear about this from the media. Customers, depending on the business size, may also need to hear it directly from you. Balance this with the need to ensure the message doesn’t go too far in an uncontrolled environment. Here are a few key groups who may need to be notified in advance:
- Customers – If you’re talking about a large retail company, they may not need to know first. But If we’re talking about a CPA firm or other relationship-based business, they absolutely should.
- Research reporters – Some markets have business-focused papers that rank companies by assets, client counts, etc. You may need to notify the person who compiles those lists to meet his or her deadline. In this scenario, know that the research reporter understands the need to be discreet – yours is not the first announcement with these implications.
- Employees – This one is obvious. Don’t let them find out from someone else!
- Investors and other stakeholders – These individuals are likely already part of the conversation, but make sure there’s an official notification containing more details.
All things considered, it’s a good idea to bring in some trusted advisors to ease this transition – consider professionals to assist with communications, human resources and even post-merger operations. If first impressions are everything, make sure your merged company puts its best face forward.