I follow a company that just experienced a merger of equals. Some would say it was an acquisition but the larger company leaders wanted the transaction to be viewed as a merger in an effort to extend their good faith efforts to the leaders and employees of the acquired company.
Because of the myriad of issues involved in the integration of two companies, the leaders of both companies were thrown into a state of chaos. Of course, their lives had not been a walk in the park prior to the merger with their international travel, intense pace and growth mindsets. But their worlds today make them look back on those days as if they were in a simpler, easier time.
Immediately after the transaction closed, these leaders relied on advice from a large, international management-consulting firm that resulted in tremendous chaos and confusion. On the surface, there was nothing wrong with the advice since it is the standard recommendations made by all large management-consulting firms dealing with complex, post merger integrations. However, in this case their confidence in this consulting firm and their reliance on this advice, in hindsight, proved to beyond problematic.
Not only were they faced with the standard legal, financial, marketing, and sales integration challenges and standard communication issues they were advised to conduct a massive layoff to “remove the redundancy.”
Certainly there was redundancy at every level, starting at the CEO level. However, even at the CEO level these leaders had been able to design a 3-year plan that would provide a smooth transition in the CEO and President roles.
Each of these mature, experienced leaders let themselves be lulled into a false sense of accomplishment at the consummation of the ‘deal’ and were overly- confident their decisions. They believed the recommendations of their consultants were sound and would drive the results that had been forecasted during due diligence.
Unfortunately, their situation did not evolve as they has hoped and planned.
The integration was disrupted by the chaos and confusion generated by any layoff. Both companies had demonstrated long-term commitments to their employees and built productive cultures of inclusiveness and trust. All of the benefits of that decades of hard work to build these kind of trusting work environments flew out the window the day after the transaction closed with the leaders announced the layoff.
Instead of employees digging in and working on both their regular responsibilities from their ‘day job’ and demonstrating the initiative and effort to solve the problems that arose in this critical integration phase, employees were disheartened and disillusioned.
Instead of working harder they started to languish by the water cooler and compare notes, gossip and spread rumors. Everyone was traumatized by the reduction in force and was waiting for the next announcement of further post-merger integration layoffs.
People one could focus. No one could relax. No one could maintain a balanced perspective. Every employee was obsessing over the rumors and focused on the worst possible scenarios for the company, themselves and their families. This included line staff, management and executives alike.
Instead of replicating their successes building cultures of trust, inclusion and initiative, the new entity descended rapidly into a blaming, dysfunctional culture where no one took ownership. The worst part of this situation is that it will take a decade to rebuild a productive, trusting workplace culture. This will impact the forecasted goals and limit the potential growth of this new entity for a long time.
Albert Einstein said, “We cannot solve our problems with the same thinking we used when we created them”.
David A. Fields says, “When we thought the sun revolved around the earth, our vision was limited to a tiny planet. Then, a startling reversal of perspective opened up a universe of possibilities.”
We simply cannot work longer hours and more evenings and weekends and yet expect our perspective to remain balanced. Fatigue causes our judgment to be impaired.
We can’t imagine the possibilitiy of using new and different approaches that are aligned with our personal and corporate values when we are in a state of frenzy from the intense pace.
We cannot bring out best selves nor create an environment for others to bring their best during a slash and burn layoff.
In order to move powerfully through all the challenges during a post-merger integration, we must be open to thinking differently and not repeating long-standing beliefs and approaches. We must have the courage to create new approaches and drive towards greater potential. We must use different thinking than we’ve used before.
Even if leaders have been through post-merger integration a number of times, the world is different today. Millenials, Gen X and Gen Y have expectations in the workplace that are different from baby boomers’ expectations.
Technology has provided everyone with 24/7 communication and social media has given each one of your customers, employees and vendors a voice and a platform to express their thoughts instantaneously and broadly.
We need to answer these questions early and often:
- What is the Purpose of this new entity?
- Why do we exist?
- What is our product or service?
- Who are our customers?
- For what reason do we exist?
- What steps are required to build a high performing organization quickly?
- How are we communicating this Purpose to each and every employee at every level?
- Do we have a refreshed, joint Strategic Plan that outlines goals by:
- Growth & Strategic Goals
- Operational Goals
- How are decisions being communicated in a clear, concise and consistent manner?
- How will we get the right people in the right roles, focused on the right projects right away?
- How will we prioritize?
- What method will we use to make decisions, especially around allocating resources?
- What data will be important to monitor daily, weekly and monthly?
- Can we obtain an executive dashboard affordably, quickly and easily?
- How will we fund this growth?
- Who will own our project plans?
- What is everyone’s new role?
- Are these roles delineated by direct accountability as well as oversight accountability?
- Do we have a complete, comprehensive, well-documented set of expectations that specify our desired outcomes, available resources, responsible party, due dates and a reporting mechanism to keep our C-level leaders briefed?
In this brave, new world, leaders must demonstrate courage and innovation, especially in post-merger integration.
To achieve the forecasted goals and leverage the synergies of the former entities, we must adopt a new way of thinking and use new and different approaches to removing redundancy and excess costs. These new approaches must be very different from the slash and burn approach of layoffs. We must expand our perspectives beyond ‘how we’ve always done integration before”. We must bring new thinking, a new mindset, and a commitment to inclusiveness, thoughtfulness and transparency.
Do you have the courage to use these new and different approaches?