We’ve written previously about this topic – when two firms come together through merger or acquisition. And given the increase in such activities over the past few years, we had hoped that our earlier perspective had been improved upon and businesses had got better in bringing two sides together. So that 1 + 1 = 3.

Unfortunately, our hopes have been dashed, as it seems for many, the race to purchase, inorganically grow through acquisition or to simply create the oft spoken synergistic benefits of bigger businesses is taking longer to realise.

Recent surveys of staff* who have been intimately impacted by a merger/acquisition have revealed disappointment, confusion and anger – the integration of the businesses had not gone according to the plan! Staff comments referred to an ‘us and them’ environment, ‘favouritism’ and ‘lack of clarity’, ‘broken promises’ and ‘lack of team’. You get the drift.

*Confidential Staff Survey service, conducted confidentially and independently by Business Health.

The situation is exacerbated by the fact that many staff are working in a hybrid (home and office) environment, with team interaction and general communication being conducted almost exclusively on a virtual basis. It’s not easy to ‘read the room’ when there’s no one physically in it!

In digging a little deeper into the reasons underpinning these sentiments, we identified the following as the major drivers of such poor feedback:

  • The leaders of these businesses had failed to sell to their staff the vision of what the new merged business was going to achieve.
  • Their middle management were simply ill-equipped to manage the integration, due to a lack of suitable training and the tools needed to implement.
  • Their implementation timeframes were unrealistic, given the magnitude of the changes they were seeking. No doubt driven by the financial rationale behind the merger.

There are a variety of strategies to minimise the potential damage;

1. Through your due diligence process, learn what you’re getting in terms of people and culture (“cultural assessment”), before finalising the merger. Sometimes you just can’t get square pegs into round holes!

2. At the time of the merger announcement, hold an ‘all staff’ meeting to introduce everyone (both tribes), overview the rationale for the merger, the expectation for its success (the plan) and encourage questions. This will provide the platform for your future success.

Thereafter, schedule regular training to bring people up to speed with new systems, standards, policies and even the language used etc. Use teams drawn from both sides to address specific areas and to share knowledge and ideas.

Team events bring the whole team together. This can be the perfect platform for training, team building, celebrating and acknowledging important milestones and achievements. And yes, even a little fun. There are costs involved, but it may be far less expensive than the cost of replacing staff who decide to leave.

3. Consider sending a ‘welcome and hi’ note/gift basket to the spouses of new staff – not a bad way to kick off a new relationship.

4. Recognise that there could very well be differences in remuneration levels and structures between the staff of merger parties and while you will be looking to achieve consistency and equity over time, be aware of the potential disharmony this might cause at the outset. Could there be scope for one off integration styled bonuses to level this field up?

5. Thereafter, communication becomes the proverbial non-negotiable – it should be regular, relevant and meaningful. For example:

  • Regular updates to staff on how the merged business is tracking to its key integration goals and projects, lessons learnt, wins achieved. Teams, Zoom, Instagram, What’s App and video can be very useful allies.
  • Your business’ intranet platform – to allow you to communicate business as well as people ’stuff’, recognise milestones, birthdays and achievements.
    • Schedule time for one-on-ones with staff (both old and new), a ‘how are you feeling/any questions?’ call or coffee can work wonders. be on the lookout for early warning signs that the merger isn’t going to plan.
    • Regularly checking with staff through an annual staff survey will allow you to tap into any prevailing sentiments and get ahead of any lingering post-merger issues.

6. Ensure everyone (both teams) has role clarity with an up to date PD which clearly addresses goals and objectives for the role. Unfortunately people management has been a weak spot for many Australian practices over the years, where, for example, almost half of all staff don’t have up to date job descriptions or clearly defined objectives for their role.***

7. If someone isn’t working out, act quickly. Don’t risk lingering animosity and a deleterious hit to team morale.

At a time when the race to attract, retain and develop good staff is well and truly ‘on’, we strongly urge every owner to invest a little more time to regularly seek feedback from their staff**.

Yours in best practice,

Terry Bell, Business Health Pty Ltd.

**Sadly, Business Health’s latest research shows that just over one in four practices have not sought feedback from their staff over the past two years while of those that had, a meagre 5% had used an external party to confidentially conduct and benchmark. Source: Future Ready IX: Insights into the Australian advisory profession.