Common Post Merger Integration Challenges Companies Face
These post merger integration challenges can quickly suck the life out of new business cultures coming together.
Morale is one of the most common post merger challenges any CEO is going to face. This is true not only with your own organization, but also with the new organization that you’re trying to add to your portfolio.
When you’re creating a new entity from two merged organizations, remember: both cultures have distinct values, distinct business processes, and they’re used to doing things in a particular way. Loss of morale, loss of productivity, and anxiety and stress levels of the people in both organizations are going to be running at an all time high.
Smart CEOs are thinking about ways to integrate both cultures together and create a flourishing third culture that has the best of both worlds.
Common post merger integration challenges companies face
Loss of morale
When combining two separate entities into one, both of which have many moving parts, the change causes a large sense of uncertainty in the workplace. Fear of job loss and worry can turn into bitterness quickly, and with that, loss of interest in the job itself. Both parties will suffer if you don’t focus on communicating with employees openly about changes and integrating the two cultures effectively.
Loss of productivity
It’s not uncommon to see cases of lowered productivity during a company merger. Lowered morale has a direct effect on the ability of your employees to focus or find interest in work, at least until they feel secure. Post merger integration challenges like loss of productivity can have a large negative effect on company earnings.
This proves especially difficult while trying to work with new balance sheets and re-analyze quarterly and yearly sales goals. If organizations don’t integrate properly, don’t be surprised to see a high rate of sick days, long weekends and tardiness.
Post merger integration challenges can range to the polar opposite of lowered productivity. Your business loves to see hard-working, competitive, enthusiastic employees. During a merger integration, however, the motivations for working extra hard change.
People are in fear of losing their jobs, which fuels them to try and compete with everyone else. The environment can turn hostile if employees are left in the dark about their futures.
High stress and anxiety levels
Both organizations will be functioning at very high-stress levels during merger integrations. They’re wondering about their job security, if they want to stay with the company, and how the work environment will change.
High stress is one of the post merger integration challenges that is nearly unavoidable. It’s just a matter of containing those stress levels, so they don’t bleed out into worse behavior.
What would a smart CEO do?
A smart CEO will focus on integrating both organizations to create a more dynamic third culture. But being tasked with the responsibility of integrating two different cultures is a serious undertaking.
Post merger integration challenges like the ones listed above are especially difficult to resolve and often require assistance from a third party. A mergers and acquisitions consultant will know the intricacies of getting people to come together and blend their cultures. If done correctly, the challenges of merger integrations can be controlled and turned into positive experiences for both parties.
The goal is ambitious, but it can be done–you just need to execute the right plan.
If you’re business is in the middle of a merger/acquisition, don’t wait until people start quitting before you reach out for help with this transition. Let’s schedule a FREE no-obligation call.