Managing the organization

It is important to select and agree a change process that matches the challenges posed by the specific merger and acquisition. If the most important challenge is to achieve cost-cutting goals, then project management techniques can be applied and the changes made swiftly. This may mean the use of a task force to make recommendations, and the agreement of a linear process for delivering the cost-cutting goals. However, if the most important challenges are integration issues or cultural issues, then the ideas of both Bridges and Senge are relevant. Attention must be paid to managing endings, transitions and beginnings for specific teams involved in significant processes. Other teams may remain untouched.

We have used the Kotter model, introduced in Chapter 3, to illustrate the steps from initial news of the deal to full integration. This model is useful because it combines a range of different assumptions about change, so tackles the widest range of possible challenges.

Establish a sense of urgency. This is a tough balancing act for management. They must start to raise the issues that have led to the merger or acquisition without revealing the deal itself. For instance if the company is currently in a dwindling marketplace, then managers should highlight the need to do something about this, without necessarily revealing any intentions to buy or to merge. People will be suspicious and resentful of a deal that does not make any sense. ‘Why are we diversifying now? I thought the plan was to buy the competition!’
Form a powerful guiding coalition. Managers of both companies need to begin working together as soon as they can. They need to spend time together and build a bit of trust. When the deal is announced, managers will then be able to work together at speed.

Create a new vision. A top-level vision for the new company must be built by the new top management team. This vision will be used to guide the integration effort and to develop clear strategies for achieving this. The integration effort needs to be targeted in specific areas rather than be a blanket process, and clear timescales for implementation must be given.

The new structure needs to be put quickly into place, a level at a time, ensuring that customers are well managed throughout. The new sales and customer service structure is therefore also a priority. New values and ways of working should also be discussed and identified.

Communicate the vision. Kotter emphasizes the need to communicate at least 10 times the amount you expect to have to communicate. In addition, all the research about mergers and acquisitions indicates that it is impossible to over-communicate. Managers need to be creative with their communication strategies, and remember to work hard at getting the two companies to build relationships at all levels.

The vision and accompanying strategies and new behaviours will need to be communicated in a variety of different ways: formal communications, role modelling, recruitment decisions and promotion decisions. The guiding coalition should be the first to role model new behaviours.

Empower others to act on the vision. The management team now need to focus on removing obstacles to change such as structures that are not working, or cultural issues, or non-integrated systems. At this stage people are encouraged to experiment with new relationships and new ways of doing things.

Plan for and create short-term wins. Managers should look for and advertise short-term visible improvements such as joint innovation projects, or the day-to-day achievements of joint teams. Anything that demonstrates progress towards the initial aims of the merger or acquisition is newsworthy. It is important to reward people publicly for merger-related improvements.

Consolidate improvements and produce still more change. Top managers should make a point of promoting and rewarding those able to advocate and work towards the new vision. At this point it is important to energize the process of change with new joint projects, new resources, change agents.

Institutionalize new approaches. It is vital to ensure that people see the links between the merger or acquisition and success. If they have had to work hard to make this initiative happen, they need to see that it has all been worthwhile.