The journey of merging workforces can be complicated and full of surprises. Studies show that only about one-third of all mergers succeed, which means two-thirds fail. When merging companies, it is important to evaluate and determine how to integrate systems: financial, operational, technological. The systems that often get overlooked—and sometimes completely ignored—despite being vital to merger success are people systems.
Here are five mistakes to avoid if you are thinking of merging or have recently been part of a merger:
- Not investigating reality. Most leaders think they know how people feel about their company, the culture, and the customer experience and base merger decisions on those assumptions. Being wrong can be costly. Make sure to explore:
- The work culture: What is it like to work for each company? How are the people, processes, behaviors, experiences similar and how are they different? What are the strengths and what are some obstacles that must be addressed?
- The customer experience: What is it like to do business with each company? Why are customers loyal? What do customers desire in a relationship with each company? Are these requirements met, missed, or exceeded?
- Branding for the neighborhood. Often times, merging companies spend a lot of time and energy on external marketing activity: logos, taglines, brochures, new web design, advertising, etc., without setting up the internal systems to support the promises being made. They create the “curbside appeal” and the house looks great—from the outside. Employees can’t or won’t deliver on the promises made because the time and attention was not spent setting them up for success.
- Lacking a belief system. When merging companies, the parties are not merging with the system of beliefs. Rather, they’re merging with people. People who have their own belief systems. Beliefs are powerful. If the combined company doesn’t define the beliefs that everyone in the organization should think and feel, employees will use their own. Beliefs drive behaviors and leaving this up to the individual means that the experience being delivered is guaranteed to be inconsistent and perhaps not in line with what the company wants to be known for.
- Not forming a guiding coalition. People are naturally uncomfortable with change and leaders can underestimate how hard it is to move people out of their comfort zones. Forming a guiding coalition of leaders and influencers from both companies can help build trust and create the environment for engaging employees’ hearts and minds. This group can help alleviate pushback, negativity, and doubt that could prevent the company from achieving alignment and making necessary change happen.
- Poor resource allocation. Part of dedicating attention to the people systems is budgeting for it. Leadership should apply resources and set expectations for the vision, beliefs, and behaviors and then communicate those expectations through hiring systems, performance evaluations, and strategic recognition. Be wary of providing lip service—rather, budget, plan, and prepare for human integration activities.
Avoid these mistakes to move beyond announcing your culture to focusing on the beliefs and behaviors that create an aligned workforce and enable delivery of consistently great customer experiences.
Heather Rudes is the Senior Director of Human Resources based out of our Rochester, NY office.