Coming off a record year for mergers and acquisitions, an overwhelming majority of executives at U.S. corporations and private equity firms forecast that deal activity will stay strong or even ramp up this year.
And this is certainly true with banks of all sizes, as well as other financial institutions.
To ensure the success of these new organizations, the team members of both companies need to work well together. The only way team members will be enthusiastic about collaborating is to openly talk through their cultural differences, as well as their respective organizations’ values and beliefs. This will not be an easy conversation, nor a short one, given the number of differences standing in the way.
How can organizations best handle these issues?
Let’s start with the rumor mill. The prospect of a merger or acquisition automatically stirs fears among employees on both sides of the consolidation. Both companies need to think about messages that address and allay those fears, while acting in a manner that is as proactive and transparent as possible. Some strategies to achieve this while communicating with employees include holding town hall meetings, video conferences or HR roundtables to address questions. Additionally, distributing communications that keep employees up to date regarding what is transpiring and dates that things are happening will go a long way toward alleviating some of the fears and anxieties of not knowing while the merger or acquisition is taking place.
Once the transaction is a done deal, other concerns and issues might come to light. The Harvard Business Review article, “Three Answers Every Employee Needs,” provides some advice from Betty Jane Hess, the former head of Arrow’s acquisition integration team. “When we make an acquisition,” she said, “every employee has just three questions: 1) Do I have a job? 2) Who do I report to? and 3) How will I get paid? Until they get answers, nothing else matters.”
Charters For Newly Formed Teams
In light of this advice, it is imperative that communication and messaging not stop once the transaction is complete. In fact, it should now be even greater and more focused. Company leaders and managers, as well as HR representatives, need to make the time to talk with the individual employees the merger/acquisition has affected the most. Again, they should focus on being consistent, being proactive and being transparent.
One of the biggest challenges in a merger or acquisition is for managers and team members of teams that have been pulled apart, reassigned, merged or disbanded. In situations like this, it is inevitable that the “new” team is really coming together as a group of individuals – not a team. People are often fearful, angry, frustrated and confused. The manager or leader must embrace the task put in front of them: to bring these individuals together and form a team. It’s not unusual in this situation that conversations that were at first respectful quickly devolve into uncomfortable exchanges that reflect mounting frustrations and distrust. Cultures are colliding and people are confused – trust is not the foundation of the team.
At this point, the manager of the team may want to create a team charter to help guide the transition. A team charter acts as roadmap by which team members can see where they’re headed and how they want to get there by defining the purpose of the team, how it will work and the expected outcomes. It can be a great way to integrate two separate teams or a group of individuals into one cohesive unit, all focused in the same direction. The process for creating the charter will help to answer questions that result from a merger/acquisition and will begin to build trust among the team members, ultimately alleviating many of the questions and concerns that arise when two organizations merge.
The precise format of team charters varies from situation to situation and from team to team. And while the actual charter can take on many forms, much of the value of the charter comes from thinking through, discussing and agreeing on the various elements, as a team.
When developing the charter, the team leader should help the team focus on moving in the same direction. He or she should plan time over several days to discuss and work on the components. The team leader should help the group understand what’s really behind their differences and use the charter to pave the way for the team to create its own path and direction that blends the best of both cultures and organizations, and brings a group of individuals together as a team.
The environments of organizations after a merger or acquisition can be rather unsettling. But through clear communication and straightforward effort to help employees understand what’s going on and how they can work with one another, the newly formed organization can be positioned to be much more than the sum of its parts.