Fortis buys Escorts Hospital, Kingfisher Airlines takes a 26% stake in Air
Decan, Jet buys Sahara Airlines. Idea, Aircel and Spice plan to merge and create
a pan-India presence. With all these mergers and acquisitions happening, the
post-merger scenario can be a roller-coaster ride if people issues are not
addressed properly. At the same time, we have heard how Mark Hurd handled the
merger of HP and Compaq, once considered a huge mistake by industry experts, and
turned it into a huge success story for other merger candidates to model.
So, what could be some of the typical problems employees face after a merger?
There could be several: a feeling of loss as teams are split up and are merged
into a new team; distrust of new team members; unclear roles; resignations of
key people; low morale; rumours and also the fact that the market responds
negatively to the loss of key people.
What is it that as a chief executive officer or human resource head, one could
do to reduce the pain of change? One could take a few steps such as clarify
structures and roles; continue and intensify your communication programme as
organisations are faced with the problem that when people do not know what is
happening, they make up stories or spread rumours.
It would also be useful to engage a consultant to work at the team-building
sessions with the objective of creating collective goals and understanding each
team member. Another initiative that can be of use is change management exercise
across the organisation to help people understand and anticipate what to expect
and how to cope with feelings and emotions at each stage of the merger. This
intervention can also reduce the feeling of ‘them and us’.
Once this stage is over, the organisation could look at creating a new culture
and future goals and the usual problem at this stage would be: lack of a focused
strategy; lack of direction and the need to build a new culture distinct from
the past cultures of both companies.
At this stage, a strategic planning exercise to create a new vision, mission and
organisation values would be highly useful. This will help the organisation
create a new identity, involve everyone in planning and create a goal.
What is important is having a focused and strategic approach that identifies and
deals effectively with people issues during and after the merger phase. The
problems faced may vary according to cultural differences but the pain of
transition will always be there and it is important to address this issue to
create an effective new identity.
Written by Santhosh Babu
Published in The Financial Express: Saturday, June 09, 2007.
Written by Santhosh Babu
Published in The Financial Express: Saturday, June 09, 2007.
