If your company is involved in a merger, there is one certainty.  Everything will change.  Regardless of the carefully crafted words in the press release.  (Unless of course your company is being purchased by Warren Buffett, who is famous for only buying well-running companies and leaving them alone to run well.)

During the past few days, I talked with two associates going through mergers in very different industries, and both were attempting to convince themselves that things would be fine following the merger.  They both cited the "no expectations for layoffs"  verbiage in the press releases announcing their deal, and both engaged in some self-rationalization about the importance and "safety" of their respective departments.  My instinct was that neither individual truly believed what they were saying.  They should trust their gut on this issue.   

The statistics on merger success are frightening.  Depending on the study that you cite, it is likely that you have a better chance of getting and staying married than you do of participating in a merger that creates value for the stakeholders.  The "Why Mergers Fail" is a great topic with a solid body of research and many books and consultants offering their perspectives on how to make them work.  Perhaps I’m jaundiced by exposure to some horrendous processes and outcomes , but it seems like the people orchestrating these anticipated 1+1=3 events should pay closer attention.  That’s a big topic for many other days, so I’ll stay focused on the issue of the moment: as an employee of a company involved in a merger, you should anticipate that your world will change and probably dramatically. 

Why Everything Changes:

  • A merger is the single most politically-charged event that most people will ever participate in over the course of their career.  Rational behavior goes out the window in favor of blatant posturing.  Most of this goes on in the company being acquired, where anxiety tends to be the highest, but rest assured, the power-brokers in the acquiring company are planning their land grabs in the new world as well.   Sorry to be cynical, but I’ve never seen it occur in a different fashion. 
  • The people that orchestrate the mergers generally have little stake in creating value post-acquisition.  They have financial, legal and administrative duties with success being defined as a closed-deal.  All of their hard work has nothing to do with serving customers–that gets sorted out in post-merger integration. 
  • Integration planning activities are often managed as an attempt to provide the pretense of bi-partisan cooperation.  If you’ve been through this experience, you can sense it in the behavior and treatment that the acquired company’s employees receives from their counterparts. 
  • There are no mergers of equals.  Get over it, it is not the way of the world.
  • From the school of the obvious, the two cultures are different, and lacking shared values, individuals from both organizations will look at the same issues with very different perspectives. 
  • Valued associates of one organization are rarely valued as highly by the other.  A tremendous amount of professional equity evaporates during a merger, forcing accomplished professionals to re-justify their existence.  This inevitably feeds the political fires.
  • Someone will be in charge of making things work in the new, combined organization.  Sales plans will be combined, redundant tasks eliminated and new systems, processes and ways of doing business established.  This requires significant change.
  • There must be changes to make the numbers work. Every deal is backed by assumptions on revenue and expense numbers, and actions will be taken to move towards the targets. 

While my comments might indicate that I am anti-merger, I am not.  There are many good reasons to buy or combine businesses, and they can be remarkable opportunities for the growth of many individuals.  I am however, opposed to the empty rhetoric and false promises that often precede an event.  "Significant layoffs are not anticipated," "The two companies will continue to run essentially as they are," "This will be a merger of equals," are just a few of the disingenuous phrases that populate deal announcements and are thrown into visiting CEO speeches. 

Fear of losing employment is second only to facing one’s mortality for many people.  The pre-close period of a merger is a frightening, disorienting time for many, and lousy PR tactics don’t help, they hurt. I am certain that some companies and some mergers  get it right, but I’m confident that most don’t.  This is a leadership failure at the top, at a time when top leaders need to get it right. 

If you are living through a merger right now, or expect one in the future, it pays to be prepared.  Don’t spend unproductive time rationalizing something you cannot control.  Work hard, do your best to show value, cooperate and be a positive active participant.  And tune-up your resume, reinvigorate your professional network and update your career plan.  Trust your gut, not the press release.