It is widely acknowledged that mergers often fail because of people and cultural issues. But are employers giving this enough thought soon enough?

A deeper analysis of the picture illustrates that it is not generally the regulation or structure issues that go wrong, it is the ‘people’ aspects. Getting this wrong affects staff morale, resulting in poor working relationships, higher sickness levels, more disciplinary and grievance issues, increased staff turnover and lower productivity.

Not getting the ‘people’ aspect right means staff may well not buy in to the change, possibly leading to the merger failing altogether or the newly merged organisation having to battle in its early years against a background of residual personnel issues.

Mergers are often complicated and can fail for a variety of reasons but, drawing on our experience, here we offer some key points to reduce the risk of failure and achieve the desired benefits.

  1. Remember that a successful merger depends on factors such as culture and size, and can take years to achieve the expected results – so be realistic in your expectations.
  2. Senior staff need to focus as much on the people issues of merger proposals as on the technical and financial aspects. Forgetting the people angle, at any stage, is to invite disaster.
  3. Senior staff need to be aware that they may adjust to changes quicker than other staff as they have a higher level of information. This can lead to them having a different view of progress and may result in complacency over the concerns of frontline staff – a dangerous situation at any time, but especially in a merger scenario.
  4. You can’t ‘wing’ this. You need a communication plan that will:
  1. Set out all the information, including the why, how and when you are merging and what impact it will have on staff
  2. Be clear on what information you will convey, who and how it will be given and how often
  3. Be open and honest. Whether good or bad news, it needs to be said. If there is nothing to say then say so, but do not leave a communications vacuum for detractors to affect views
  4. Make sure staff are not left feeling uncertain for long periods – make decisions and communicate them quickly.
  1. Leaders need to remain visible in this change process and need to answer questions or concerns as honestly as possible, ideally on a one-to-one basis.
  2. Provide opportunities for employees from both organisations to work together and make sure that they hit the ground running as soon as possible.
  3. After the merger, remember that conflicts can still arise – be clear about respective roles and responsibilities.
  4. Staff will be expecting further changes post-merger and it is important that the good practice of these communication principles continues to be applied.

It is widely acknowledged that mergers often fail because of people and cultural issues. But are employers giving this enough thought soon enough?

A deeper analysis of the picture illustrates that it is not generally the regulation or structure issues that go wrong, it is the ‘people’ aspects. Getting this wrong affects staff morale, resulting in poor working relationships, higher sickness levels, more disciplinary and grievance issues, increased staff turnover and lower productivity.

Not getting the ‘people’ aspect right means staff may well not buy in to the change, possibly leading to the merger failing altogether or the newly merged organisation having to battle in its early years against a background of residual personnel issues.

Mergers are often complicated and can fail for a variety of reasons but, drawing on our experience, here we offer some key points to reduce the risk of failure and achieve the desired benefits.

  1. Remember that a successful merger depends on factors such as culture and size, and can take years to achieve the expected results – so be realistic in your expectations.
  2. Senior staff need to focus as much on the people issues of merger proposals as on the technical and financial aspects. Forgetting the people angle, at any stage, is to invite disaster.
  3. Senior staff need to be aware that they may adjust to changes quicker than other staff as they have a higher level of information. This can lead to them having a different view of progress and may result in complacency over the concerns of frontline staff – a dangerous situation at any time, but especially in a merger scenario.
  4. You can’t ‘wing’ this. You need a communication plan that will:
  1. Set out all the information, including the why, how and when you are merging and what impact it will have on staff
  2. Be clear on what information you will convey, who and how it will be given and how often
  3. Be open and honest. Whether good or bad news, it needs to be said. If there is nothing to say then say so, but do not leave a communications vacuum for detractors to affect views
  4. Make sure staff are not left feeling uncertain for long periods – make decisions and communicate them quickly.
  1. Leaders need to remain visible in this change process and need to answer questions or concerns as honestly as possible, ideally on a one-to-one basis.
  2. Provide opportunities for employees from both organisations to work together and make sure that they hit the ground running as soon as possible.
  3. After the merger, remember that conflicts can still arise – be clear about respective roles and responsibilities.
  4. Staff will be expecting further changes post-merger and it is important that the good practice of these communication principles continues to be applied.

We have much experience of helping housing organisations with mergers, so we can advise and help you to reach the right conclusion on whether to proceed and on how best to deliver the benefits.

Anne Elliott, Managing Director at EMA