More and more companies are relying on mergers & acquisitions (M&A) as a competitive growth strategy. Since 2012, M&A activity has increased dramatically in both number of deals and size of transaction, with the yearly value of global M&A deals tracking above $4.5 trillion for the past four years. These are heady numbers and 2018 is expected to continue apace. Yet when mergers are not done correctly, the end result can be at best uncomfortable, and at worst devastating to both companies.
After a Merger, Don’t Let “Us vs. Them” Thinking Ruin the Company
When a merger or acquisition is announced, people instinctively wonder who “they” are — “they” being the company on the other side. Whether the company is known or not, there’s an instinctive reaction to regard “them” with a wary eye. Cultural differences can emerge, particularly if the companies have been at different ends of the spectrum in the marketplace. What makes sense on paper — i.e. a high-end product-line company merging with a low-end product-line company — can devolve into an us versus them dynamic as the companies’ different approaches and cultures inevitably conflict. While us-versus-them thinking can undermine deal success, it doesn’t have to. Managers can minimize the downside potential by focusing on creating a cohesive culture, by communicating consistently, and by committing to a smooth transition in both words and actions. Focusing on what’s best for the customer will go a long way toward positioning the new organization for success.