3 Key Reasons Why Mergers Fail, and What You Can Do About It

While mergers are becoming more and more prevalent, they aren’t any easier get right. A 2019 Deloitte study indicated that 79% of respondents expect the number of deals they close in the next 12 months to increase, up from 70% percent last year. Still, many mergers fail to deliver as expected.

Issue #1: Your employees become unmotivated.

According to QFinance, one of the reasons mergers fail is because of the demotivation of employees. When people are uncertain, they aren’t invested in their jobs, and their productivity decreases.

“In the moment” coaching skills equip managers to help people deal with the emotional side of change. While they may not be able to give definitive answers to some questions, they can coach people to use the challenges that the merger presents—like building a new shared function or helping their teammates acclimate to their new environment—to build their own skills. Encouraging people look for ways to enhance their abilities keeps people engaged—and increases their confidence that they will have a brighter future, wherever they end up.

Issue #2: Your most valuable employees leave.

From the moment a merger is announced, employees start to worry. The uncertainty of their job status combined with the lack of communication that typically follows a merger announcement forces them to ask themselves the questions: Will I lose my job? Will I have to move jobs? What will happen next? When their fears are not addressed, they may feel that the most practical step is to look for new jobs. And when they’re your most valuable employees, they won’t have a hard time finding new opportunities.

When leaders are confident in their “in the moment” coaching and feedback skills, they are better able to recognize the different ways that people express their fears and concerns. Rather than reacting when people complain or disengage, they recognize that these behaviors often indicate that people are struggling or uncertain. Coaching-based leaders respond to these situations by creating “coaching moments” to help people surface and address their fears in practical ways, even when they can’t alleviate all of the uncertainty.

Coaching-based leaders are also likely to communicate more frequently to address questions and concerns before they have a chance to morph into the kinds of stories that cause people to run for the doors. If you want to keep you people, you have to continue coaching them throughout the transition process.

Issue #3: People underestimate the challenge of creating a shared culture.

Many sources attribute at least part of the problem to underestimating the difficulty of merging cultures. When two organizations join, most leaders bank on the financial opportunities, but few factor in the cost of not creating a shared culture.

When the new culture is divisive, people tend to view the company through an “us” versus “them” lens. As such, collaboration decreases, connection points are lost, and the change process can stall out. Ultimately, this distrust grows into a culture of silence, that drains much of the value out of the merger.

You can avoid this all too frequent outcome by equipping people with “in the moment” coaching skills that enable them to appreciate the unique perspectives their new teammates bring. Conversations begin when people get curious about how “the other side” sees situations. When disconnects are greeted with curiosity on both sides, people are better able to discover unique ways to move forward by building upon everyone’s strengths.

“In the moment” coaching skills equip people to create a new, shared culture, together. When these kinds of conversations become a way of life they translate to a culture built on trust and collaboration—creating a Change-Able® coaching culture that will enable your merger to flourish. As an extra dividend, when the merger is complete, the coaching culture will remain, enabling your organization to navigate any kind of change—including future mergers and acquisitions—with greater ease and success. That’s an investment that will return value for years to come.

Download White Paper

When you’re thinking about navigating this kind of change, read how “in the moment” coaching and feedback skills have impacted organizations in our new white paper, “The Resounding Cost of a Silent Culture.”

2 thoughts on “3 Key Reasons Why Mergers Fail, and What You Can Do About It

    merrill says: September 10, 2019 at 1:09 pm

    I liked your post and was reminded with my work at a consumer products POS insurance company. They bought a similar company five years prior to my engagement with them . . . and the cultures still had not meshed! The numbers were telling the tale (going south). Working with the in-house OD team (stellar by the way) we were able to turn the tide. Our feelings of success were tempered with the losses of five years of neglect.

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