It is a sad fact that the vast majority of mergers, acquisitions, and reorganizations don’t deliver on the promises envisioned by their creators. The quality of leadership and the value of optimizing human potential leads to ultimate results.
Having led teams through nine mergers and acquisitions during my 26 years in the corporate world, I’ve experienced the good, the bad, and the ugly that comes from these major transitions.
Here is a brief tale of two mergers with vastly different results, and what it looked like along the way. Names have been changed to protect the innocent and the guilty.
A + B = C
In the successful merger, top executives clearly outlined a vision for what the merged company would look like. The goal was to blend the best features of Company A, which had innovative management and quick implementation, with Company B’s long-standing reputation and vast resources.
Senior executives kept communicating the simple phrase “A plus B equals C” to every employee. Instructions were given to view each person, process, and product from this angle. This sounds cold-hearted, but people are resilient and resourceful when treated fairly and told the truth about a transition that must be made.
Employees had the opportunity to share their thoughts in live meetings and teleconferences. Questions were answered honestly. There was still plenty of commotion as we made this transition, but having a clear goal for decisions and action led to a stronger company that produced excellent results.
B is better than A, except it wasn’t
In the unsuccessful merger, senior executives were either blind or willfully ignorant about the truth of the company they acquired.
Company A was successful in a specific market segment and had the desire to grow it quickly and visibly. Senior leaders decided to acquire Company B, which had been a leader in the segment in earlier times.
The due diligence team that perused Company B could see that operations and sales processes did not line up with senior staff’s proclamations. When this team reported findings to senior management, they were ignored.
The acquisition was made, and concerns about Company B were validated through bitter experience. The combined business lost tens of millions in profits. Productivity at Company A declined and senior executives from Company B cashed out. This left Company A holding an empty bag.
Although this brief analysis can only express a few key points, some key lessons stand out about how to lead major change initiatives:
- Top leaders must deeply understand the underlying facts in a situation before making major decisions. Also, they must trust the input of experienced employees;
- Knowing when to say NO to contemplated change is as fundamental to success as saying yes. This must come from senior leaders’ shared values and vision for the company;
- Clarity from the top is essential. This helps team members at every level accept, digest, and engage in making organizational change successful.
Susan Blais is a leadership coach and business strategist, with a mission to optimize human potential in the workplace. She and her international network of coaches and consultants help leaders at every level maximize strengths, unleash potential and achieve breakthrough results with joy.
Listen to Optimizing Human Potential in the World and the Workplace. Susan shares information and strategies on optimizing human potential in the workplace. She gives business leaders insight on how to lead teams through radical change.