Rory James-Duff: the perils of overlooking people during an acquisition

Among the ‘top tips’ and ‘high profile failures’ written and featured about mergers are estimations that as many survive as marriages – roughly 50 per cent.

Businesses are fond of declaring that their ‘people are their greatest asset’ and that is often true. Upon a merger, completed or pending, corporate PR machines go into overdrive announcing, once they’ve signposted the headline commercial rationale, the ‘shared ambitions’, ‘complimentary principles’, ‘aligned values’ and ‘common cultures’.

Countless examples and the experiences of employees show us that while merging entities invest heavily in the optics (PR and internal communications), some stop there. Those boards, executives and investors hold their collective breath, hope that integration is smooth and that teams adapt.

Meanwhile, employees are faced with a seismic shift – new colleagues, characters, management and structure. New policies, procedures, software and systems. An empowering, collaborative and trusting management style may yield to something more autocratic and transactional, or vice versa. Changes, which may involve saying goodbye to people and premises, can be extremely unsettling. It is too often forgotten that ‘employees’ have human reactions to big changes. Productivity can be the loser.

Increased employee engagement is known to boost productivity and profitability. The ingredients of engagement are workplace-based but are clearly rooted in human needs – trust, valuing one’s work, opportunity, recognition, role clarity etc. Organisations are getting better at listening, but it is absolutely incumbent on the leadership of merging businesses to check-in on their ‘greatest assets’ before, during and after M&A. Boards should insist on formal and informal information gathering, human interaction, and the provision of an independent channel for employees (and other stakeholders) to share their views and concerns around any merger.

Mergers are marriages. Some need more work than others. Few survive significant impact without excellent communication, and the people involved being at the very heart of the discussion.

Rory James-Duff is a director of Orwell Independent Ltd.