USP Creative

How to ensure post-merger employee morale

20/08/2015
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Morale post-merger

Acquisition and mergers invariably start out with enthusiasm. There is a lot of talk of synergies, strengthening market share and excited forecasts; however in the rush to ‘get the deal’ done, scant attention is paid to engaging with key stakeholders and the post-merger integration of employees.

Astonishingly 50% of all M&A deals fail to realise the anticipated returns that were expected. The common theme for this failure is too much short term focus on the financial and legal aspects, and not enough emphasis on communication and securing the goodwill of staff across both companies.

It is natural that employees are fearful about potential changes within an organisation, it is very challenging to keep morale high and employees engaged during that time; however organisations need to move staff engagement higher up the priority list if they truly want to realise the potential from a merger or acquisition.

There is both research as well as anecdotal evidence, of the psychological effects on employee’s wellbeing post a merger or acquisition; which often has a negative impact on behaviour resulting in counterproductive practices, low morale and absenteeism. All research in this area suggests that open, timely and accurate communication will reduce employee’s anxiety and uncertainty. It can never be eradicated completely, particularly when resistance is invariably found throughout both organisations from the top down.

But what happens once the legal team have left and the merger completed? Often it’s considered ‘job done’ but we know from our experience in helping companies with effective internal communications that employee engagement never does stop!

The importance of taking the human factor into account is gaining respect in the world of corporate mergers, because the negative impact of failing to address communication to stakeholders always results in a hefty cost – loss of key staff and the share price dropping as the joint venture efficiencies fail to materialise.

When two companies merge, there is an assumption that there are natural synergies in attitude and approach, a general presumption that culturally they will be compatible. How often are families completely harmonious? The concept that two entities of separately trained staff, working in their own unique environment under different circumstances will automatically become a harmonious merged workforce is rather unrealistic.

Embedding the vision, identifying the cultural values, desired behaviour and ethos of the merged organisation needs to be a priority for every CEO. The senior leadership team need to decide how things should be done and then set about making sure everyone is clear about their role and responsibility in doing them! Everyone should understand the journey the new company is on, what the key milestones are and crucially how they all fit into that. Complex visions and strategies can easily be articulated in compelling and dynamic ways that engender a sense of belonging and partnerships. A lot of organisations make the fundamental error of focusing on getting the structure in place and ignoring the emotional elements of culture and hope that it sorts itself out naturally.

Our experience shows that organisations can face a number of challenges when trying to embed a new system of behavioural values following a merger. The most common are that the senior leadership have not understood the importance of a unified and aspirational culture and therefore inadvertently are undermining the process by not being a role model to the desired behaviours; that the values have been decided by a ‘top-down’ approach and without the collaboration from employees; and finally the implementation is not taken seriously and hampered by lack of initiative and enthusiasm.

Implementation through creativity means that values have a higher probability of being deeply ingrained, as their introduction was impactful, dynamic and therefore likely to leave a lasting impression. Ensuring resonance across the entire business and having collective brand advocates is essential to the success of the new entity and needs to be taken as seriously as all other elements of a merger to truly see the results that were originally envisaged. If more weight was needed to the argument, then significant studies show that there is a direct correlation between a culture of strong values and company performance. Live, breath and demonstrate the values – don’t laminate them and hope staff will eventually find them in the back of their handbook.