Multibillion-dollar mega-mergers like the recent AOL/Time Warner deal can easily turn sour when not enough attention is paid to the "people" side of the deal. So say the authors of The Complete Guide to Mergers and Acquisitions (Jossey-Bass Publishers, 1999). According to co-authors Mark Herndon and Timothy J. Galpin, meetings often can help.
"Communication," says Herndon, "is key to ensuring that once a merger is undertaken, every employee knows precisely what to expect when the deal is finally approved. Face-to-face meetings with top executives are the best way to make this happen."
Such meetings are important, notes Herndon, because few organizations pay much attention to "cultural integration"--the successful merging of human assets as well as material assets--when pending mergers and acquisitions are in the due-diligence stage. He cites seven major studies pointing to people issues and cultural issues as primary causes of merger failures.
"The same type of analysis that's focused on financial operations and information technology should also be focused on cultural integration, but few organizations tackle any kind of cultural integration. Many say they're aware of the potential problems, but they don't seem to do anything about them or don't know how to."
If it is logistically impossible to hold face-to-face meetings with all employees, then top executives should at least meet with senior managers, who will pass essential information on to lower levels, Herndon advises. Even then, he adds, staff meetings should feature video presentations of top executives to ensure that employees feel fully informed and secure in a merger's aftermath.