What do I belong to? The belonging challenge after mergers and integration

“Of course the merger was a success.
Neither company could have lost that much money on its own.”
This is how Steve Case, Former Chairman of the Board at AOL/Time Warner, was quoted after the merger failed to deliver the big promises of the deal.

Over 80% of mergers and acquisitions fail to create the value promised when the deal was announced; around 50% actually destroy value. And the prime cause? A failure to merge cultures, leading to irreparable damage caused by internal conflict and warring tribes.

Mergers, acquisitions and integration can completely change an organisation’s sense of belonging and create some of the most tricky belonging challenges. The impact can harm, much more than help, your business.

 In the run-up to a deal, while all the pros and cons are being aired in public, employees undergo private angst. In the aftermath, once the deal is sealed, the immediate question might be “Do I still have a job?” Or “Do I still want this job?”

 But before the dust settles, the confusion of identity and clash of tribes leads quickly to the fundamental belonging challenge:

“What do I belong to?”

We often hear employees telling us, as they point over their shoulder to the past

“Oh no, we’re different, we used to be Xxxxx [old company name]”

And then we’ll hear their CEO and board, pointing forward to the future, exasperated:

“Why don’t they get it? Now we’re Yyyyy [new company name]”

This disconnection is where M&A or integration cause harm.
Human beings are not keen on change. We like familiarity, predicability, the road well-trodden. Our sense of belonging is an important part of this.

In her excellent new book, ‘Neuroscience for Organisational Change’, Hilary Scarlett gives a clear insight into what happens inside our brains during times of organisational change

“We have hugely underestimated human beings’ need to feel that they belong and are connected to others.
This need increases during times of uncertainty.
Our ability to think clearly and perform effectively is reduced, stress levels rise.”

Hilary Scarlett
‘Neuroscience for Organisational Change’

At exactly the time that the company needs everybody to share a clear focus towards new opportunities its people can be bewildered by change, or distracted by culture clash between several tribes coming together.

Senior, junior, makes no difference: it’s simple human response. And the symptoms may be all too familiar:

Symptoms of Culture Clash

  • Mistrust
  • Refusal to cooperate or share
  • Isolationism
  • Victor and vanquished
  • Inconsistent standards of service or safety
  • Haemorrhage of talent
  • Internal focus, ignoring customers
  • Constipated decision-making

Happily, there are ways to reduce the risk and smooth out the process.
It takes careful planning and consideration to overcome.

One of the main ingredients for success is active involvement.
Early on in discussions you may not be able to share much detail, but do make sure your own business is the trusted source of information, rather than gossip.
Once a deal is struck, get people together as early as possible. Smaller groups are better than large: even better if this is more informal and less intimidating. Teams working between the different companies, or across disciplines, forges connection: make this active, work on a real challenge, not a hypothetical one.

Most important, involve people in the statement of shared ethos and purpose of the new organisation, don’t just bundle a list of values together.

For more of our thoughts on mergers and acquisitions, see our piece on post-merger success here.

We’ve found many commonalities, and good practice that works across sectors and scale of business: but the application, specific approach and the pace of change, is unique to every company.

 

Belonging Space helps organisations create a sense of belonging.
www.belongingspace.com

Join our next seminar on 21 April and 19 May
What do I Belong to?
How to overcome the belonging challenges of mergers, acquisition and integration

There’s only a few places left, email Francis to reserve yours.

Or call to arrange a chat through your belonging challenges
We’ll get the kettle on and Jaffa Cakes ready
0207 833 6434