FREE online courses on Mergers & Acquisitions - Chapter 6 - People Issues

 

Productivity and performance will usually drop once a merger is announced. The reason is simple; people are concerned about what will happen. In the book The Complete Guide to Mergers and Acquisitions, the authors note that "at least 360,000 hours of lost productivity can be lost during an acquisition of just a thousand person operation."

 

Quick and open communication is essential for managing people issues. Constant communication is required for addressing the rumors and questions that arise within PMI. People must know what is going on if they are expected to remain focused on their jobs. Communication should be deep and broad, reaching out to as many people as possible. Face to face communication works best since there is an opportunity for feedback. Even cursory communication is better than no communication at all.

 

"Get all the facts out. Give people the rationale for change, laying it out in the clearest, most dramatic terms. When everybody gets the same facts, they'll generally come to the same conclusion. Only after everyone agrees on the reality and resistance is lowered can you get buy-in to the needed changes." - Jack Welch, CEO, General Electric

 

It is also a good idea to train people in change management. Most people will lack the knowledge and skills required for PMI. Immediately after the merger is announced, key personnel should receive training in how to manage change and make quick decisions. People must feel competent about their abilities to pull off the integration.