Quick SummaryMAPs are like marriage. Many Boards concentrate on the wedding day and forget to work on the on-going relationship. As with a marriage, different people have different styles of motivation and communication. Different organisations have different styles of working. It is the PEOPLE within the organisation who actually implement the consolidation, merge the cultures and achieve the intended results - or not! ...
Mergers, Acquisitions And Partnerships
MAPs are like marriage. Many Boards concentrate on the wedding day and forget to work on the on-going relationship. As with a marriage, different people have different styles of motivation and communication. Different organisations have different styles of working. It is the PEOPLE within the organisation who actually implement the consolidation, merge the cultures and achieve the intended results - or not!
In order for a MAP to succeed, the respective staffs need to share their knowledge, experience and skills at the micro level. They need to co-operate, innovate and create. Yet the impact of a MAP on individuals creates a state of mind which actually inhibits their ability to do these things. The direct result of this is that merged companies routinely experience a post-merger drift causing a decline in productivity of 25 to 50 percent for a period of 12-24 months after the event.
To make a MAP work, the staff need to be open, creative, innovative and proactive. On Maslow's Hierarchy of Needs, they can only do this when they have reached levels 4 and 5. When the MAP is announced people experience a psychological shock, they immediately slide to levels 1 and 2 of the Hierarchy. They focus on the probability of cost cuts and job losses. Their biggest priority becomes Security. The impact on the business is dramatic.
This feeling of insecurity locks people into the Basic Needs levels. They feel isolated and focus on their own doubts and fears, waiting for the axe to fall. They will latch on to others around them who share their insecurities and talk together about their fears, united by their own anxiety. This response causes the post-merger drift.
Belonging to an organisation is one way in which we fulfil the need for a sense of security. A group of people will create 'in jokes', particular jargon, rituals, heroes and ways of doing things. Being part of a particular group helps to generate and reinforce our sense of self-respect and self-esteem and enhances our level 3 sense of belonging. Following a MAP, this loyalty can become counter-productive. People will still identify with and remain loyal to the original entity - even when it no longer exists. Disruptive tribalism within the new entity will cause petty, time consuming and expensive guerrilla warfare, the exact opposite to what the organisation needs in order to be successful.
A transition task force can make a very positive impact on the success of the MAP. They can anticipate and manage the problems caused by major change, communicate the purpose of the MAP and clarify each individual's place within the new structure. The task force can focus the entire organisation on 'what is best for the Customer.' It is important to move people away from thinking about their own position and their confused loyalties. This stage, properly managed with sensitivity for egos and insecurities, will save months of time that could have been wasted on dysfunctional tribalism.
Communications Strategy & Change
Communication needs to be thought out, focused and frequent. Sharing positive results quickly demonstrates the effectiveness of the new entity and addresses the need for security and belonging. Joint results and a "positive feel" are vital to foster motivation and build up the credibility of the new entity. Deal with redundancies and re-structuring as early and constructively as possible, to make the people who are staying feel secure in their new environment.
The entity can reinforce the new image through the use of symbols, logos, slogans, rites and rituals. These reinforce the feeling of belonging to a new, successful, forward-moving organisation.
A MAP means massive change. People have an in-built resistance to change - change equals threat - they do not like having to adapt to new ways of doing things, especially if they feel they are being forced to. They will instinctively push back major change, even if it will be more advantageous in the long run.
Here again the integration task force can have an enormous impact. The timing and sequencing of change implementation is critically important to maintaining productivity in the switch from the old entity to the new. By understanding the process of change and how people are feeling and responding, they can co-ordinate, monitor and manage how and when changes are implemented to maximise benefit to the new organisation.
Getting On-Purpose and Off-Position
The sooner people feel secure and sense they belong to the new entity, the sooner they will begin to get "on-purpose and off-position". Here, at levels 4 and 5 of Maslow's Hierarchy, they will become flexible, adaptable and co-operative and be willing and ready to share ideas, knowledge and experience.
Everyone has a need to feel valued and to feel a sense of achievement. Senior executives need to effectively engage the staff's emotions, feelings of belonging, sense of competence and self-respect. The staff will sense an affirmation of their value in the new environment. They will then focus on adapting to their 'new' world effectively. They begin to see the bigger picture, and focus on the overall goals of the new entity and how they can begin to make them happen. People are at their best when they have a common goal and compelling objectives that can be reached only by co-operation. They begin to use the intelligence of the whole system to focus on solutions instead of on problems. They begin to care again about successful outcomes.
The primary function of any manager is to ensure that they get the best out of the people who work for them. Time and effort has to be invested in planning and executing a proper strategy for managing the impact of a MAP. This will dramatically reduce the duration and effect of Post-Merger Drift.
A study by Harvard Business School found that organisations with strong shared culture and values outperformed those without those attributes.
* their share prices grew twelve times faster
* their rate of job creation was seven times faster
* their profit performance was 750% higher
Together, the figures show an amazing return for a relatively small investment of thought, time and effort.
It is the people within the organisation who must implement the consolidation, merge the cultures and achieve the intended goals. Organisations with effectively managed cultures consistently outperform others by generating faster revenue and profit growth and higher share prices. People will either sabotage the success of the new organisation or they will unite and focus their attention, expertise and effort on its achievement.
Your thoughts matter to others - more than you can imagine.
More Articles published by Marie
3 Free | Ad-Free | Full-Text Business Papers
Corporate CultureStories are not an optional extra in organisations. They are being told and re-told at the water cooler, on the phone and via e-mail - both internally ... 50 | 4.8 K | 6 min
Success BuildingMeasuring and managing invisible and intangible assets is one of the most powerful sources of sustainable competitive advantage. 50 | 5.63 K | 10 min
LeadershipDo the people in your organisation feel free to use their initiative or are they waiting to be told what to do? 55 | 4.61 K | 7 min