Like two sets of quarrelling in-laws forced to spend Christmas together at the couple’s house, the period after a merger can be awkward.

 

Two distinct sets of people are suddenly forced to set aside their competitive urges, their mistrust and their cultural differences and sit side by side. The hope is that they will find sufficient synergy to become a single family, with a shared culture, goal and set of behaviours.

 

In corporate terms, it’s a big ask. It’s not a question of knitting two cultures together and hoping no-one sees the join – it’s the difference between building a new car and welding two halves together. One stands a chance, the other is doomed.

 

“Most organisations overlook the people element of the merger or acquisition,” says Clare Latham, senior internal communications consultant at communications agency scarlettabbott. “They are too focused on the books and fulfilling the financial promises they have made their shareholders, forgetting that achieving them is dependent on an engaged, motivated workforce.

 

“Best in class organisations understand that people are a fundamental part of the process and that truly engaging people and winning hearts and minds can have a significant positive impact on the future value of the combined entity.

 

The problem, says Scott McKenzie, head of change and internal communications at Hill & Knowlton and chair of CIPR Inside, is that each organisation will bring different cultures, systems and ways of working. “So you are asking employees to adapt and in some cases compromise. Communications can play a key part in smoothing out some of these differences. Some employees will associate themselves with the brand identity pre-merger – so where possible you must try to give them a flavour of the benefits of being part of the new organisation”

 

The characteristics of the two companies and the merger itself will prove crucial, he argues. “You need to decide early how to describe the transaction. Is it a merger, an acquisition, a combination? This can set the tone for remaining communications. If you say this is an equal partnership with both parties contributing, you need to be able to follow through on that. Employees will be looking to see if one party is more dominant than the other: who is taking the leadership positions in the new organisation? What systems and processes will we now be using? Which buildings will we be located in?”

 

Eliminating that negativity is essential. According to Paul Sweetman, who leads the Employee Engagement team at Fishburn Hedges, the merged organisation has to build a sense of common purpose, across all employees groups, and help enthuse people about the future rather than let them dwell on the past. “The organisation also has to go further and help teams and individuals understand what being part of the newlymerged organisation means to them, and how they are expected to behave on a day-to-day basis in order to bring that common purpose to life.”

 

There are certain golden rules when trying to bed down a newly merged workforces, he counsels. “The main thing is not to underestimate the importance of managing cultural integration so that a new, effective, successful organisation is born. Any integration process can join up systems, strategies, and balance sheets, but it’s essential to have engaged, enthused and committed people to deliver plans in practice.”

 

The golden rule is that the post-merger communications must be led from the top. In a time of flux, strong leadership with clear communication is more important than ever.

 

“Ensure your leadership team is visible,” says Latham. “People want to hear information from the horse’s mouth. It also ensures consistency and accuracy of message. Get your leadership team out and about in the business, talking to people about the rationale for the merger and listening to their hopes and fears.”

 

She cites the example of a global oil acquisition, in which the leadership team made time to get out and about to talk to employees from both organisations and understand the issues. “The CEO posted a weekly blog on the integration site that was an honest and upfront account of his personal experience of the integration.” Similarly, she points to a recent merger of two energy companies. Here, the entire executive team cleared its diary and took to the road to host live question and answer sessions at every location. It’s at this level that the big ideas need to be communicated, says H&K’s McKenzie.

 

“Provide practical and responsible reassurance,” he says. “Start by painting the ‘big picture’ so that subsequent messages will fit into this context. Then focus on one or two key priorities that people will understand readily and be able to act upon quickly. Try to communicate messages as clearly and directly as possible. Employees perceive “woolly” talk about vision, mission and values cynically.

 

But communication should be two way – both vertically up and down the corporate hierarchy and bridging the new merged divide. “Involve the communication manager of the acquired organisation,” says Latham. “They know what works and what doesn’t in their business. But keep the team small – small teams move faster – and work closely with other communication groups such as external affairs, industrial and government relations to ensure consistency of internal and external messages.”

 

And keep seeking views and checking the understanding of employees across the organisation. “If there are misunderstandings about the merged organisation’s vision, or what’s changed from the past, these can easily seep through to customers or stakeholders,” says Sweetman. “Lack of employee understanding of, or confidence in, the merged organisation’s vision or strategy can also undermine performance and productivity.”

 

As touchy-feely as it might sound, the personal approach can prove pivotal in a post-merger environment, he adds. So make sure employees understand what is not changing as much as what is. “We all need some familiarity in our surroundings,” he says. “So, it’s important that employees understand what elements of the role, structure, and environment will remain in place. These become ‘enabling structures’ for the wider process of change.”

 

It’s important because change for employees is emotional and rather than rational, says McKenzie. “But try to remind them that healthy organisations adapt to change and always examine and challenge how they work. Accept that uncertainty will affect people differently and aim your communication at those most likely to be concerned, unfocused or unproductive.”

 

At the same time, he suggests finding opportunities to bring people from both legacy organisations together. This could mean cross-functional projects or face-to-face meetings. “The sooner that people realise that they are working with other human beings with similar challenges the better.”

 

That approach should be seen not only in the tenor but the chosen channel of communication. “People want to talk to someone at times like this not read a magazine or an intranet page,” says Latham. “Focus your efforts on face-to-face channels – events, briefings, Q&A sessions, business breakfasts with the leadership team and road shows.”

 

 

Many suggest the creation of positive ambassadors by converting visible cynics into champions or by making use of existing mouthpieces. Treat managers as a key audience, says Sweetman. “Line managers play a pivotal role in situations like this. The way they reflect the merged organisation’s vision and ethos, adjusting the way their teams work or are supported, holds the key to whether anything actually changes on the ground. But managers need to be helped to understand their role, and be equipped to stimulate and support the behaviours that companies are seeking from employees.”

 

It may seem like a collection of no-brainers and commonly accepted rules, but there remain pitfalls which are frequently overlooked amid the bankslapping and high-fiving of a successful merger. “I think one of the major pitfalls is to assume that effective integration will simply happen on its own,” says Sweetman, “that employees across the newlymerged organisation will immediately grasp what the change means to them and understand, as if by osmosis, what goals they are now working towards and how they are expected to behave.” Another major danger, he says, is to be halfhearted about the engagement effort. “There must be a clear commitment and a concerted effort to engage employees in what the new organisation means, what is needed from them on a day-to-day basis.”

 

Of course, it’s not just the over-arching corporate culture that needs attention. “Don’t under-estimate the small stuff,” says Latham, citing the overnight removal of bowls of fruit and free newspapers in one global giant’s acquisition of a small but dynamic player. The small but perceptible cultural shift “sent strong, aggressive signals and set the tone for a tricky and not entirely successful integration”.

 

But the most common bugbear has to be ineffective planning. Pip Peel is VP of PIPC, a specialist in project and programme management consultancy which was behind the successful integration of RBS and Natwest in 2000. He says that companies can often underestimate the challenges of bringing together two disparate sets of systems, processes and workforces. “If a newly merged organisation fails to turn its attentions to its people quickly, an inherently stressful situation can be exacerbated; leading to an increased culture shock and even trench warfare.”

 

“At PIPC, we see, far too often, conversations around planning and communications which start only after the deal is signed,” he says. “It goes without saying that post-merger integration strategies, including workforce strategy issues, should be part of the pre-deal and deal-making phases of a transaction. In an ideal world, implementation can then start on day one, as the sooner the new workforce strategy is designed and implemented, the sooner it starts to capture the value.

 

“Whilst there can be common strategic approaches, no two workforces, or companies are the same. Every new transaction brings with it its own set of challenging circumstances, and whilst you can learn from previous experiences, what worked before may not work again.”