5 things to do if you want a merger to succeed

One of the most common things I’m asked to talk or write about is how to manage organisational change well. Recently, I was asked about my thoughts on a particular type of change – that of the merger.

Mergers come in all forms. From the massive – several global companies merging; through to the small – two teams merging in an organisation. Whatever the size of the change, the one thing that remains pretty constant is how people react. And how they react is to a large extent predicated on how the change is led and managed – from the start all the way through to the end and then beyond.

There is much that psychology research can tell us about the key things that can make a difference during change. I’ve hand-picked recent research that I think has most relevance for mergers.

  1. Line managers are vital for successful communication and engagement

Researchers in Holland looked at the impact physical and psychological distance had when leaders communicated with employees. They found that inspirational, desirable messaging had more of an impact on people who preferred to think in abstract terms. It also had more impact the further away the leader giving the message was. However, more practical ‘what does this mean in reality’ type messaging had more impact on those who thought in more concrete ways and was delivered by a leader closer to them.

In summary, vision and high-level direction should come from the leadership of the organisations or teams that are merging; and the subsequent detail of what will happen, when and to who should ideally come from line managers. This means giving line managers across the different organisations the information, tools and skills to communicate and engage on a day-to-day basis during all stages of the merger.

2. Develop a detailed transition plan covering all phases of the merger

Two UK researchers looked at the impact of outsourcing on employees moving from a local authority into the private sector. The research looked at the impact of transition from three distinct phases:

  1. The employee experience from the moment they discover work is likely to be outsourced through to actual award of the contract to a new provider;
  2. The initial, early employee reactions to the transfer experience; and
  3. Employee reactions and reports once things have settled down, becoming firmer and clearer.

The researchers found that employees felt communication was insufficient in the early stages of the change and that information was of poor quality, meaning it wasn’t easily understood. Line managers came under some fire for not providing enough support for employees.

Once the change had taken place, employees reported tension with managers in the early months post-transfer. It was also noted that not enough work had been put in to support the changes to culture and ways of working.

The lessons from this research? Make sure you have a carefully detailed transition plan which includes defining and developing the culture and ways of working for the new organisation.

3. Be mindful of how people perceive the status of their organisation

Research published in the British Journal of Social Psychology examined whether the status of an organisation could influence how committed employees were to a merger.

When mergers are announced it can:

  • Disrupt employees’ sense of identity
  • Lead to a loss of purpose
  • Lead to lower productivity

In particular, employees from seemingly lower status organisations are likely to react even more negatively.

The researchers found that how employees make sense of and build on information given to them about the merger-instigated change is key to their commitment. This is, in turn, fed by how equal or proportional any merger is or isn’t perceived to be.

The main take-away is that the more effort that is put into providing enough quality information about the proposed merger, the more likely it is to gain commitment to change.

4. Evaluate the impact of change on employees at various points

Monitoring impact on morale and motivation should be a key part of your transition plan. HR teams in the various organisations involved in the merger should agree what and when questions need to be asked.

Research from Canada looked at how people make sense of change in real-time and then after the change has taken place. In summary, the researchers found that planned change can be a positive experience. They also found that an individual’s view of change depends very much on how they are asked and that role and tenure play a part.

Evaluating the impact of change is an area that many organisations fall down on. Agreeing your evaluation criteria before the change has even been announced is vital. Evaluation doesn’t need to be over-complicated. One organisation I worked with simply had three ‘temperature check’ questions it asked employees each month to keep track of how people were feeling. This was then segmented according to department and level in the organisation, meaning that any ‘hot spots’ could be targeted with specific support by HR, along with improving communication and engagement activity.

5. Resistance to change is complex – it’s silence you should be worried about

Research in the Academy of Management Review led to the development of a new theoretical model of how we can understand reactions to change.

The researchers suggest four behavioural reactions to change:

  1. Change acceptance – positive emotional reaction, with little to no activity.
  2. Change disengagement – negative emotional reaction, with little to no activity.
  3. Change resistance – negative emotional reaction, with high activity.
  4. Change proactivity – positive emotional reaction, with high activity.

While the model is, as yet, untested it provides a helpful way of looking at and responding to resistance. In particular, the fact it challenges the simplistic notion that resistance is bad, providing some subtle nuances for those leading change to be aware of. For example, change acceptance while positive is seen as passive in this model, and hence means those leading change are unlikely to get much in the way of ideas for implementing change from people in this quadrant. Likewise, just because people are silent doesn’t mean they are on-board. Change disengagement is seen as the most dangerous territory in this model – silent fury which could well cause problems further down the line.

This model has potential uses particularly in helping organisations think a bit more carefully about how they go about communicating and engaging with employees during change. It offers a slightly different way to develop any stakeholder maps.

If you’ve led a merger, what were the main lessons you can share with others based on your experience? And if you’ve been on the receiving end of a merger, what was your experience like and what would you advise those leading future mergers? Leave a comment in the box below.

 

2 comments

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.