Get access to the exclusive HR Resources you need to succeed in 2018.
Sign up for free email newsletters and get more SHRM content delivered to your inbox.
Is your employee handbook keeping up with the changing world of work? With SHRM's Employee Handbook Builder get peace of mind that your handbook is up-to-date.
Build competencies, establish credibility and advance your career—while earning PDCs—at SHRM Seminars in 14 cities across the U.S. this fall.
Gain the skills you need to rise to the next level in your career. Jon us at SHRM's Leadership Development Forum, October 2-3 in Boston.
Members may download one copy of our sample forms and templates for your personal use within your organization. Please note that all such forms and policies should be reviewed by your legal counsel for compliance with applicable law, and should be modified to suit your organization’s culture, industry, and practices. Neither members nor non-members may reproduce such samples in any other way (e.g., to republish in a book or use for a commercial purpose) without SHRM’s permission. To request permission for specific items, click on the “reuse permissions” button on the page where you find the item.
Mergers and acquisitions (M&A) are on the rise in 2011, and industry analysts predict more than $3 trillion in global M&A activity for the year. Too bad that most of the deals will fail.
By all accounts, 70 percent of M&A deals fail to create value. And, according to one recent study, half even destroy value. An abysmal record.
So, why do the majority of M&As fail? Simple: the people side of the deal—so critical to success—is too often ignored or overlooked. Executives focus on the business and financial issues but not the human issues. As a result, employees—who, at best, feel marginalized—lose trust in leadership. An us-against-them mentality ensues, and workers withhold the talent and energy required for a successful merger.
The good news is that merging executives can circumvent the most common mistakes—trust-busting failures of leadership during M&As. Here are seven such failures and how to avoid them:
1. Failure to acknowledge what’s happening.
Pay attention to red flags—the warning signs of broken or eroded trust. Are workers disengaged? Are teams missing targets? Are business units operating in silos? Also, acknowledge, preferably in a public way, that you know that the situation hasn’t been easy, from untold uncertainties to clashing cultures. Tune in to how people respond, and show them that their views matter. A little acknowledgment can go a long way in helping employees feel better.
2. Failure to hear people out.
Provide employees with nonthreatening environments to express their feelings so emotions don’t go underground. Regular feedback sessions at all levels can help people reflect on where they’re at; how they lost their confidence, commitment and energy; and what it will take to regain it. Additionally, employee surveys and focus groups can be beneficial.
3. Failure to provide information.
Make sure no one is moving ahead blindly. Help employees feel involved and in the know by sharing as much information as possible. Also, by tuning in and really listening to people, you’ll be able to communicate in ways that are most relevant to their primary needs and concerns.
4. Failure to put the situation into a larger context.
Help workers see the bigger picture by sharing the business reasons behind the merger or acquisition—why it’s happening, what makes it the best course of action, and how the company will be better as a result. In addition, encourage people to look at how their individual choices can help—or hinder—their own situation.
5. Failure to take responsibility.
Own up to your mistakes and, by creating a safe, open environment, help employees do the same. Acknowledge lessons learned. As an organization, commit to concentrating on problem solving, not blaming.
6. Failure to help people move on.
Challenge employees to buy into the company’s future, starting with the new opportunities it offers them. They might not forget the present perils and pitfalls, but, with some encouragement, they can choose to look forward rather than stay stuck in the past. A key ingredient here is engagement—helping people re-energize and recommit.
7. Failure to walk the talk.
Finally, successful M&As demand artful, authentic leadership, and that starts with consistently walking your talk. If your actions and behaviors don’t match the vision and values you claim for yourself and the company, your credibility as a leader is lost, and, especially for employees, the merger’s mission is nothing more than meaningless words.
Dennis and Michelle Reina, Ph.D.s, are experts on workplace trust and co-authors of Rebuilding Trust in the Workplace (Berrett-Koehler) and Trust and Betrayal in the Workplace (Berrett-Koehler). They are co-founders of the Reina Trust Building Institute, a global enterprise specializing in measuring, developing and restoring workplace trust. Contact them at reinatrustbuilding.com.
You have successfully saved this page as a bookmark.
Please confirm that you want to proceed with deleting bookmark.
You have successfully removed bookmark.
Please log in as a SHRM member before saving bookmarks.
Please sign in as a SHRM member before saving bookmarks.
Please purchase a SHRM membership before saving bookmarks.
An error has occurred
Recommended for you
Choose from dozens of free webcasts on the most timely HR topics.
SHRM’s HR Vendor Directory contains over 10,000 companies