Mergers & Acquisitions

When two companies become one through a merger or an acquisition, the new entity undergoes organizational “culture shock.” The results of this new entity can be a new, more powerful, more flexible, more capable organization with the best attributes of both original entities. Or it can produce a company at the other end of the spectrum, one that is a complete mismatch of goals, methods, values and management styles, often with disappointing results. The likelihood is that what will emerge will lie somewhere in between these two extremes, and the success of the merger or acquisition will hinge on the new corporate culture.

Consider some “side effects” – other possible outcomes of mergers and acquisitions which include:

–         Loss of key personnel

–         Loss of key customers

–         Workplace conflict

–         Low trust, communication and respect

–         Wasted time and effort

–         Unnecessary stress

One example of an acquisition “horror story” is General Motors’ acquisition of EDS in 1984. This marriage was handled so badly that the two “divorced” in 1996. Along the way GM created uncertainty, hostility and resistance among many of its own employees, and it managed to defeat its own purpose in acquiring EDS in the first place.

The vast majority of mergers and acquisitions come as a result of perceived alignment of financial strengths and opportunities, market positions, overlapping goals, and geography. What is rarely considered, and what was instrumental in the failed marriage of GM and EDS, is the behavioral component that our SAR Process^® addresses. This behavioral component consists of, and our process specifically addresses, these elements:

–         Expectations

–         Reducing resistance to change

–         Enhancing accountability for overall results

–         Professional-grade teamwork

–         Ethics

–         Aligning organizational and individual purpose

–         Proactive response to weaknesses and threats

In short, mergers and acquisitions are much more than combined bank accounts and common offices. They are the best hope for long-term sustainability in a challenging economic environment, and as such they are highly susceptible to the fears, doubts, priorities and ambitions of the people who populate them.

If you are contemplating participating in a merger with or acquisition of another organization then don’t overlook the impact of “culture shock.” Keep in mind that one of the key questions you must ask yourself is: What are we about to do today that will interfere with what we have to do tomorrow?

We can help you find the answer to that all-important question, and our SAR Process^® can provide the solution.