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How to manage the people side of a merger.

By Ruth Tearle

You are involved in a merger or acquistion. Once the financial arrangements have been finalised, how do you ensure that you achieve the benefits out of the merger that you expected?

This article shows the different stages of a merger or acquisition and the problems that need to be resolved during each stage. Use this article to guide your merger team in planning a successful merger or acquisition.

1. After the merger announcement.


stopTypical problems

  • People stop!
  • A feeling of being in a void. There is no point in making new plans or doing anything until they know what is going to happen.
  • There is a vacuum of information.
  • People feel they are on an emotional roller coaster.
  • Competitors talk negatively about your merger.
  • Sales people struggle to make sales as clients want to know what is happening first before they commit.
  • Specialists attempt to get to know their counterparts in the other company, but don’t trust them.
  • The ‘threat of the merger’ results in a team bonding within each company. The beginning of an ‘us and them’ mentality.
  • Staff and the market keep asking "what’s happening."


Company led interventions

  • Set up a communications committee comprising credible people from both companies.
  • Find out what people’s concerns are. Listen.
  • Try to stop the rumors by communicating honestly what you know AND what you don’t know.
  • Publish a ‘state of the merger’ newsletter.
  • Don’t make any rash promises you may not be able to keep to in the future. E.g. ‘there will be no retrenchments.’

Consultant led interventions

  • External consultants could be used to help design the new structures and select people for key positions.

2. Creating a structure for the merged company.


Typical problems

  • A feeling of loss as teams are split up and merged into new team.
  • Distrust of new team members.
  • about-me
  • The new leadership team is not working effectively.
  • Unclear roles.
  • Resignations of key people.
  • Some people who did not get the positions they expected feel resentful.
  • Low morale.
  • Rumors.
  • The market responds negatively to the loss of key people.


Company led interventions.

  • Clarify structures.
  • Clarify roles.
  • Continue and intensify your communication program.

Consultant led interventions.

3. Gather information about each company.


People feel more confident when they know what to expect from each stage of the merger.

Typical problems

  • Lower levels still feel in a vacuum.
  • They begin to jockey for position.
  • Them and us feelings intensify.
  • Customers begin to ask for combined products and services.
  • Competitors exploit the ‘confusion’.

Company led interventions

  • Set up project teams to investigate what you have in each company in each functional area with regard to:
    • Policies & procedures.
    • Products & services.
    • Systems.
    • Structures.
    • Brands.
    • Staff benefits.
    • IT.
  • Project teams look at what both companies offer, compared to what the 'World’s Best' are doing. They then develop proposals for systems/policies/procedures for the new merged company.
  • Once agreed, develop a program for implementing your new policies, procedures and structures.
  • Keep communicating progress.

Consultant led interventions.

  • Consult with specialists on what the 'World’s Best' are doing in terms of each project. (A merger is a good opportunity to start afresh.)

4. Merging the operations.


Typical problems

  • Stress (operational plus integration tasks have to be done simultaneously.)
  • People complain the old was better. People long for the past.
  • Them and us continues.

Company led interventions.

  • Project managing the changes.
  • Ensure ‘hot button' issues are addressed.
  • An integrated salary and benefit structure should be implemented as soon as possible.

5. Creating a new unified company.

directionTypical problems.

  • Internal issues have been resolved. The company is ready to look outwards.
  • Lack of a focused strategy.
  • Lack of direction.
  • Need to build a new culture distinct from the past cultures of both companies.
  • Need to build new brands.

Company or consultant led solutions.

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