Survival Kit for Mergers & Acquisitions:  Same Bed, Different Dreams

Posted by Paula Alsher on Thu, Oct 27, 2016 @ 10:57 AM

Another “mega-merger” hit the headlines this week when AT&T agreed to purchase Time Warner for a whopping $85.4 billion dollars.  If the deal is approved, it will be the largest acquisition of 2016.  Whether we’re talking about a massive transformation such as this one, or a smaller scale situation, Mergers and Acquisitions require the bringing together of two cultures. And culture change is not a quick or simple task. Mergers & Acquisitions

As change management experts, we know companies going through a merger cannot afford to just sit back and let the changes “happen.” If they do, the change will manage them, rather than the other way around. There are plenty of examples of cultural mis-matches that ultimately brought down the new organization. Years later, the struggle between the organizations continues to dilute performance. In fact, many organizations still experience a “we-they” mentality, even years later.


Policies, Systems, and Structural Integration Isn’t Enough

So how does an organization survive after an M&A?  Even if the strategic fit is right, and the deal is structured and priced appropriately, the coupling of two organizations is about more than just merging assets and streamlining operations.  While you only need to integrate each company’s processes and technology once, managing all the human elements of the integration requires a structured, repeatable process and constant attention to the constantly changing risks on the human-side.  

The first step in a sound integration plan is to have a unified approach and language—a change management methodology that crosses both organizations {Tweet This}. Because IMA’s proprietary Accelerating Implementation Methodology (AIM) is focused on a process for human-side implementation – the stage that can make or break a merger – the framework lends itself ideally to successful integration.

Organizations often don’t apply business-discipline and rigor for managing the human elements of complex, large-scale change such as a merger or acquisition. But, achieving the potential synergies and financial benefits is unlikely if the people-side of these M&A’s is not given sufficient attention.


Merger Survival Tips & Tools 

With over 30 years of experience working with both large and small integrations, our change management consulting experts have developed the following list of best practices to survive a merger.


Speed is key.
Creeping changes, uncertainty, and anxiety that lasts for months is debilitating and immediately drains value from an acquisition. Instead, try to integrate quickly, while remembering to target key cultural and human barriers.


Understand the purpose/rationale for the deal and align management actions with that purpose.
Integrating diverse cultures, i.e. patterns of values, behaviors and unwritten rules, is messy and time consuming. Determine where on the integration continuum you need/want to be both functionally and culturally, and then develop a clear definition of your desired future state.


Senior management must model commitment to the change.
This commitment must cascade down to every manager in the organization, from senior management down to the line managers. Without perceived management commitment, implementation success will be severely compromised.


Be prepared for resistance to change.
Resistance to change is natural and inevitable. If not immediately and properly managed, resistance will fester and act as a barrier to your implementation. Respond quickly to concerns, rumors and questions.


Pay particular attention to the efficacy of reinforcement systems (rewards and consequences) to effectively motivate people to work toward the desired goal.
Reinforcement is the power lever for any implementation. Create a strategy to ensure behavior change is in the desired direction, and discontinuance of current patterns occurs.


Develop an effective communication plan.
Make communications two-way and constituent/stakeholder focused (in their frame of reference). Use a variety of communication channels, with an emphasis on the face-to-face.


Employ full-time Change Agents.
Integration management is a full-time job. Train a group of key people through change management certification to handle the incredible volume of questions and issues that will emerge during times of high uncertainty. While the senior executives must continue to lead the process and maintain business momentum, another group can act as a reliable source of information and provide quick, tactical decision-making.


Be prepared for surprises.
This type of implementation will be harder than you can ever imagine vis-a-vis politics, emotions, time, effort and resources. In short, ignoring the human factors will ensure disaster.


“Same bed, different dreams.” That sums up what you face after the deal is signed. Each side comes to the table with very different preferred outcomes.  Successful “integration” requires much more than the integration of policies, systems, and structures. In the AT&T/Time Warner example there are over 325,000 employees who will be affected by the change.  Will senior management devote sufficient rigor, discipline and resources to the human side of the change? Only time will tell.

Mergers & Acquisitions Tip Sheet

Topics: Transformational Change, Culture, Mergers & Acquisitions