Bringing people with differing viewpoints, backgrounds, cultures, behaviors and communication styles together in the workplace, conflict is likely to rear its head. Conflict can manifest and fester in the likeness of bullying, non-cooperation, back-stabling, insulting remarks and innuendos. Results of these acts appear in low productivity, absenteeism, increased stress, illness, and failed projects. Organizational change adds even more disruptions.
Mergers and acquisitions often lead to the most conflict. A few decades ago, organizational change was rare. In the past decade, the story is different as mergers and acquisitions have increased at a rapid pace. Organizational changes are not just for large organizations anymore. At times, over 80% of small organizations will make large changes. When one considers that, only an estimated 50% of mergers are successful in the UK and that the US has an even lower success rate of 23%, it becomes glaringly clear how important it is to understand how to manage change. Here are a few guidelines.
Begin with a culture based on fairness and mutual respect. This will be the foundation on which to structure and implement change. Integrity, honesty and transparency form the basis of a fair culture. Transparency is the order of the day, not hidden agendas. Encouraging consistent, timely, private and consequential feedback is essential for fairness. Establish accountability in all areas and value keeping commitments. Inspire confidence in colleagues and co-workers.
Take time to understand cultures. A study of two merging banks illustrates the psychological traumas that affect the success of the merger and employee performance. Through pre and post interviews, observations and surveys, it was discovered that the employees of Bank A merging with Bank B experienced the feelings that they were being invaded or even conquered! During conflicts, Bank A employees would “pine” over the culture left behind and the old bank. Despite better pay and benefit with Bank B, feelings of low commitment and job satisfaction ran high. It is imperative to understand that while people may intellectually understand the reasons for a merger; there is a human limit for the capacity and rate of change that can be absorbed in a limited amount of time. People will miss customs, traditions and the way things were done. They will also miss artifacts such as material products or the more subjective ideations of their previous culture. Therefore, the greater number of shared experiences that can be reproduced, the more quickly a new culture will emerge. Thoroughly understanding the cultures of two organizations and carefully planning on the merging the two will help reduce misunderstandings, unfounded perceptions and mistrust. Unfortunately, with the rapid changes in business today, planning may be an elusive luxury. However, taking the time to plan a merger or acquisition will garner big dividends.
Communication is key. Failure to communicate information about a large change leads to a less than successful outcome. When employees do not have the information needed to make accurate judgments, the rumor mill becomes the solution of choice. This leads to uncertainty, mistrust, fear, counterproductive behaviors and ultimately poor performance. Poor performance facilities the failure of the merger and puts your bottom line in jeopardy.
Review Your Planning: The more people, the more complex organizations become. When mergers occur, every aspect of planning comes into play and bears reviewing. Both external and internal factors affect the strategic positioning of the organization. External factors may not always be easy to control or plan around. However, it is essential to have strong management in place to ensure internal high performance. Indeed studies indicate that the level of management can make the difference in profitability. Further, as a business grows in size and complexity, it is imperative to address planning around both costs and revenue.
While growth is essential and inevitable, preparation and planning can help reduce many of the conflicts that plague merger failures. Beginning with a foundation of good values, studying the cultures to be merged, developing and implementing a strong communication system and reviewing your planning process will assist in reducing counter-productive behaviors and leading your organization to a successful merger.