Uncertainty is the New Normal

Submitted by Melanie Endert on Thu, 08/27/2015 - 10:00

An Excerpt from "The Employee Handbook for Navigating Mergers and Acquisitions"
by Mitchell Lee Marks

Editor’s Note: Several factors figure into the eventual success or failure of mergers and acquisitions—including the depth of due diligence, the financial details of the transaction, the process through which integration decisions are made and implemented, and even the timing of the deal. Our personal experience—and what we consistently hear from our seminar attendees—also points to the human and cultural dynamics impacting the achievement of a deal’s financial and strategic goals. That’s why we recently published “The Employee Handbook for Navigating Mergers and Acquisitions.”

Below is the second in a series of brief excerpts from the handbook. Learn more details about the book HERE. Request your FREE copy, learn more about pricing, or place your order through the M&A Leadership Council; please call our offices at 214-689-3800.

Navigating the Transition

In a merger or acquisition, some uncertainty will reign as your organization is no longer what it was, but not yet what it intends to be. People are not sure how and where they fit in, largely because the organization has yet to settle into place and a new culture emerges. Systems and procedures that were designed for the old regime may not be relevant in the new organization. New work teams have not yet been formed or settled into a routine.

The transition can be tough on employees, to be sure. What most strains people during a merger or acquisition is a loss of control over their working lives and futures. No matter how well they have performed on the job in the past, they fear that their track record can be meaningless, or that their employment will be taken away—if not in the combination, then in a subsequent downsizing.

You probably have more control over your fate than you think. Let’s take a look at what to expect and how to manage those expectations effectively.

What to Expect Between Announcement and Close

The “holding pattern” between the announcement of a deal and its eventual approval and legal close can last several weeks, several months or even over a year! In the meantime, here is some of the information you can expect to get (and should look for).

Why the deal is being done: Leadership can share the strategic intent of the partners and provide a clear rationale for why this combination makes good business sense.
How the M&A process works: Leadership is not permitted—due to government regulations—to tell you many specifics or details early on, but can educate you on the M&A process (and that may be one reason you’ve received this book).
What to expect going forward: Leadership cannot make promises about job security or what might happen to your work team—remember, they still have more questions than answers themselves—but they can tell you things like how they intend to manage the integration and how decisions affecting people will get made.

It May Be Business . . . But Certainly Not As Usual!

We often hear executives claim that the merger will be “business as usual.” We don’t think that is what they really mean because, let’s face it, it’s not. There is more uncertainty and often less communication than usual. What leaders mean to say is “keep doing your work as usual.”

That’s good advice.

First of all, there is some possibility that the deal may not receive the required regulatory approvals.

Second, even if the deal does go through, there is the probability that you will continue to do your job in exactly the same way as before the combination—the buyer or merger partner may like what they see and not have big plans for major changes.

Third, doing high quality work is a healthy way to manage stress and anxiety—it sure beats the alternative of worrying about something over which you have little control.

Fourth, but certainly not least important, your customers (both internal and external to the company) will be hoping to experience as little combination-related disruption as possible.

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About the Author: Mitchell Lee Marks is Professor of Leadership at the College of Business at San Francisco State University and leads the change management consulting firm JoiningForces.org. Over the past 25 years, he has been involved in over 100 mergers and acquisitions as a researcher or advisor. He is the author of seven books on organizational change—most recently the second edition of “Joining Forces: Making One Plus One Equal Three in Mergers, Acquisitions and Alliances”—and has published articles in the Harvard Business Review, MIT Sloan Management Review and other prominent practitioner and scholarly journals. Dr. Marks is a member of the Advisory Board of the M&A Leadership Council. He can be reached at [email protected]