Post-merger blues

LIVERPOOL/CAMBRIDGE – Analysis of mergers shows that they often don’t improve performance and value over the long run. Any of us who have experienced one will know that the mere process can bring enough stresses to cause operational difficulties to even an effective organisation.

The reasons for the failure to deliver the perceived benefit are commonly reported as unrealistic expectations or an inability to integrate cultures and ways of working. The issues are complex and often feel intangible, as different professional rationale, languages and histories compete within the new entity.

However mergers also represent an excellent opportunity to challenge traditional ways of working and address latent limitation which may have existed in either or both parties prior to merger. If this opportunity can be grasped, then the process of building new company together can be one that develops unity and resilience for the road ahead.

How then can boards and management teams improve the chances of merger benefits being realised? Is it possible to intentionally hasten the blending of cultures such that improvements to the bottom-line are delivered?

Experience shows that key relationships are critical to an effective merger, whether they are departmental, divisional, corporate or individual. The difficulty for those planning mergers is that they rarely have the tools to assess those crucial relationships and find ways to maintain or build them to make a merged organisation ‘great’.

Whilst there are many books about improving inter-personal and corporate relationships, none are actually improved by merely reading a book! The core to relational improvement, whether corporate or inter-personal, is that the parties engage with one another. Companies struggling with post-merger relationships do not need a report about how to improve the relevant relationships but rather assistance (preferably informed by both insight and the facts) to commit to actionable changes.

Tools now exist that have been specifically designed to identify and assess the Relational dynamic of organisations. Where a merger has taken place it is possible to forensically analyse the different aspects of group relationships. This allows potentially dysfunctional groups to build consensus around what is positive in their relationship, address weaknesses in a non-emotive way and deal with fundamental differences in perspective. Undertaking such an analysis will enable teams, by giving language and actionable information, to improve their interaction and performance.

Of course, as well as dealing with relational issues post-merger, it is possible to predict the relational impact that a merger may have on operations and service lines. In this way pro-active measures can be taken to make it a positive change for all involved!

This article was republished with permission of our Member Organization, Renuma Consulting.