A merger is one of the greatest fears of employees, often more so than being laid off. The perception of the merged employees, and often of the initiating company, is that it is a takeover. There are many horror stories on the subject and it is estimated that 70 per cent of mergers fail to achieve their financial or strategic goals or deliver promised synergies.

Analysts attach much of the success or failure of a merger to the fit between the two companies, in terms of goals, resources and culture. Culture clashes and poor communication feature high on Accenture’s list of CEOs’ most commonly mentioned reasons for merger difficulty. Companies that assess cultural fit, and plan around it, have far fewer problems. Some of the issues companies might face include a clash between bureaucratic and entrepreneurial cultures, conflicting reward systems and management styles, or contrasting national cultures.

A well-thought-out and expertly executed business move in this arena can bring real rewards for the parties involved. But it can also bring substantial headaches if the process isn’t handled well – particularly on the human capital front.

The best results arise when those responsible on both sides gel rapidly into a single team and take advantage of the diversity of cultures (whether corporate or national). The longer that takes to happen, the more chaos and miscommunication is likely to occur. By developing three key areas – confidence, purpose and values – companies are more likely to succeed; if they go ‘straight in’ with the new vision without building trust, they will not have the credibility to get employees to buy into that vision. Celebrating the achievements of both companies, and emphasising that the newly merged organisation will be adopting the best features of both, will help overcome the very real fears that many employees have at this stage of the process.

Many high-profile mergers are in the spotlight long before they become a reality and, by the time the participants do become an amalgamated organisation, the senior leaders are often feeling burned out by the journey. However, this is where leaders should focus their energies: building the internal relationships that will make the change process a successful one.

Key to success in this most delicate and complicated area of change management is establishing a comprehensive communication plan. It is easy to plan your first stages of communication when enthusiasm is rampant among senior management, but keep repeating your vision until the core changes are complete and people tell you that the past is history.

As important as relevance is timing: work out when each part of the message should be conveyed. Don’t give away too much too early because people need time to come to terms with the new big picture.

If you’d like to find out more about how individual companies deal with mergers or acquisitions, turn to p48 where Valerie Garrow, Vanessa Georgiou and Jeremy Day look at some of the key factors involved in the successful merger of Alliance Unichem with the Boots Group. On p43, Andreas Schnurr, of HeidelbergCement, discusses some of the intercultural problems encountered during its recent acquisition of building materials supplier Hanson.

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