Administer Ajankohtaista Blogi 5 key points that illustrate why the success or failure of a merger depends on people

5 key points that illustrate why the success or failure of a merger depends on people

5 key points that illustrate why the success or failure of a merger depends on people

Good communication and management are keys to building trust after a merger or acquisition.

Whenever a merger or acquisition involves the transfer of employees, their role is critical to the success of the deal. The integration of the acquired company requires effort: you need to take care of your new employees and colleagues from day one.

In small businesses, acquisitions often turn out well compared with enterprises. According to statistics by Finnvera, more than 90 percent of small businesses are still in business three years after the acquisition and more than 80 percent after five years. The Change of Ownership Survey by The Federation of Finnish Enterprises indicates similar results.

Key points to a successful acquisition are strategy, communication and management. Here are five tips that help you nail those.

1. Make new employees feel welcome

One of the biggest challenges for the buyer is to win over the new employees’ trust. Trust can only be built through good management and communication.

“For many employees, the change may come as quite a shock as employees often feel disappointed by the fact that the company has been sold. The buyer needs to create an uplifting team-spirit and help people recognize new opportunities,” says Jenni Halme, head of personnel development at Administer.

The first hundred days are critical. The buyer should be introduced to the staff at the acquired company as soon as the deal has been made. It’s in the buyer’s best interest that the employees are motivated to continue working in the new situation.

“The first meeting and the first impression are very important. You need to send the message that we’ll get through this together and that employees are wanted and welcome, ” as Peter Aho, CEO at Administer, writes in his blog.

2. Be prepared to answer questions

Inevitably, any major change evokes a sense of insecurity. Employees at the acquired company need information about the extent, content and schedule of the changes to come. Management should figure out the answers to these questions in advance and communicate them swiftly.

“People are experts at detecting vain words. What they want is a practical approach,” says Halme.

To have your answers ready, it might be a good idea to prepare an extensive FAQ.

3. Communicate regularly and openly

Don’t leave new employees hanging. Communicate regularly and openly in the weeks following the deal as a period of uncertainty may lead to diminished employee performance.

“If communication is delayed, it’s hard for the employees to feel like they are a part of “us”, and that feeling should be cultivated from the get-go,” says Halme.

The sense of belonging can be reinforced, for example, by creating new internal communication channels or e-mail groups or by granting new employees immediate access to the company intranet.

Halme points out that successful communication during mergers is always a challenge.

“Big changes never happen overnight. People need time to digest things. It’s important to understand that not everybody is jumping with joy from day one.”

4. Provide a familiar face

The buyer needs to specify the person in charge of the integration and takeover and who to contact if questions arise.

In Halme’s experience, a familiar face encourages people to get in touch. Thus, the contact person should try to visit new employees as often as necessary during the critical first weeks and months.

5. Plan carefully

Combining different organizational cultures can be difficult. In the worst-case scenario, the differences can undermine the expected benefits of the acquisition. You need to be prepared to handle this from the very beginning. The buyer must listen, communicate openly and show that differing opinions are taken into account.

A successful merger is the result of a solid strategy and people management skills. Even before the acquisition is final, you need to clarify, who communicates and how about the acquisition both internally and to the acquired company.