It is an understatement and an underlying truth that organizational changes have “serious impacts on the organizations and their employees” (Appelbaum, Lefrancois, Tonna & Shapira, 2007, p.191). Mergers and acquisitions exemplify perhaps the worst kind of change in any employee’s mind (Petersen, 2009).
It needs to be understood that managers, by definition, are responsible for an employee’s adaptability (Caproni, 2005, pp. 223-224; Petersen, 2009).
Even early rumors and hints of mergers or acquisitions foretell a time of instability, uncertainty, stress, and change in the workplace. Such passages touch on the lives of an entire workforce, from the most recent entry-level employee to veteran senior managers (Petersen, 2009). From the first announcement and well into the future of any newly merged operations, the responsibility of a manager will also change. Each person will have to adapt.
Employees may view downsizing during a time of economic turmoil as a manmade disaster. “The resulting disruptions have rippled across supply chains, shaken entire industries and taken their toll on employee, customer and partner relations” (The Human Side of Business Continuity Planning, n.d.). Thus, it is crucial that a manager be prepared to intelligently present the changes, be sensitive to the impending personal adjustments required, and be aware of the many human capital risks that could impede desired corporate results.
The interior circle in Figure 1 points to three troublesome corporate challenges that could grow out of human capital risks:
Managers can limit or eliminate any negative side effects through effective communication. “People want purpose and meaning in their day-to-day work lives” and this focus may be skewed during mergers and acquisitions (Caproni, 2005, p.221).
Uncertainty can be reduced by meeting with the workforce often during the change, providing answers to questions. This will help in “motivating and retaining key staff in the event” (Kummer, 2008, p.5). Reassuring high-performers of the value they provide will also maintain motivation levels. People will naturally arrive at conclusions themselves, but will be satisfied that their questions have been answered.
In this toolkit, you will learn guidelines for effective communication, guidelines for active listening, suggestions for delivering bad news to employees, guidelines for dealing with emotional employees and suggestions for self-motivation and healing.
Guidelines for Effective Communication
“There is no such thing as too much communication when dealing with employees, especially when the timeline is short and they are required to make decisions affecting their careers with very little notice” (Charland, 2008, p.11). The workforce needs “a sense of predictability and control” with a clear mission, consistency, high involvement, and adaptability (Caproni, 2005, p. 221). During mergers and acquisitions, a person’s culture or “people issues” remain one of the most difficult tasks to accomplish successfully” (Kummer, 2008, p.5). “People bring their culture to an organization,” making adaptability a vital organizational survival skill (Fisher, 1999, p. 12). This can be done by following these effective communication guidelines (Szpekman, 2004, p.9):
- Talk less and listen more,
- Tell the workforce everything,
- Ensure messages are “clear, simple statements,”
- Reduce uncertainty instilling a new sense of control,
- “Let people arrive at conclusions themselves,”
- “Reassure high-performing employees of their value,”
- “Measure performance outcomes and monitor employee reaction” and allow senior management to be visible.
If you are dealing with difficult issues such as down-sizing be sure to communicate “squarely and candidly” (Roach, 2007, p.8). Always tell the workforce everything with clear and simple language. Communications should be unambiguous, dealing with “quantifiable facts openly” and achieved by confronting reality, setting objectives, and simply being there for the employees at this time when they need managers most (Valant, 2008, p.15).
Continue to measure performance outcomes and monitor employee reactions to keep you in touch with the reality of the workforce impact and allow you to change your communication strategy if needed. Most importantly, being visible during this stressful time will show that you have empathy and that you support the people. The uncertainty and stress during a merger and acquisition can be reduced so “employees have faith in the success of the transition” (Charland, 2008, p.11).
Guidelines for Active Listening
During the merger and acquisition process, managers need to allow employees to express concerns about their future. Managers should be able to listen to current employees and address these concerns.
Employees, regardless whether they stay or leave, will suffer less and hold the company in higher esteem if employees are treated with compassion and respect. A good start is to look people in the eye, answer their questions, listen to their concerns, and warmly thank the people for sharing these concerns (Fryer, 2009).
The following are guidelines and suggestions for active listening as a manager (Caproni, 2005, pp. 117-118):
- Learn to listen with intensity and give the person speaking your full attention.
- Don’t get distracted. Turn off your cell phone and ignore the computer screen in front of you;
- Don’t assume that the issue is uninteresting or unimportant;
- Don’t listen only for what you want to hear;
- Don’t think ahead to what you plan to say next;
- Don’t interrupt, talk too much, or finish people’s sentences for them;
- Don’t engage in fake listening techniques such as nodding your head;
- And, don’t let the person’s status, appearance, or speaking style distract you.
Also, learn to listen with empathy. Understand, or attempt to understand, the message from the speaker’s point of view. Don’t relate everything you hear to your experience and pay attention to body language providing clues to the speaker’s concerns and emotional state.
Demonstrate acceptance and show that you are listening with an open mind. Avoid killer phrases such as “You have got to be kidding, that will never work,” and “Yes, but…” Also, avoid judgmental body language. Condescending grins and rolling one’s eyes can have the same effect as killer phrases.
Additionally, take responsibility for completeness and encourage the speaker, whether it is your manager or your employee, to give complete information. And, be yourself. Be sincere and do not come across as compulsive artificial, or overly trained as an active listener (Robbins & Hunsaker, 1989).
Most importantly, be aware of cultural diversity issues if you have visible minority subordinates. Identify the culture traits of your employees and adjust your communication style and listening style accordingly.
Guidelines for Delivering Negative Information to Employees
Informing an employee the organizational culture is changing, their job is changing, or they may be losing a job because of a merger or acquisition is challenging. In this section, consider suggestions how to deliver the “bad news.” Remain supportive of the corporate strategy; how you can maintain business operations; and how you can deliver critical information in the process. The following describes guidelines for delivering negative information prior to, during, and after a merger or acquisition.
First, be aware of what you can communicate based on legal constraints (IABC.COM). If your company involves both employees and consumers, recognize that the communication with employees will have an impact on the consumer. Downward communication is what your focus, as a manager, will be (Timm & Peterson, 2000, p. 128). Then, as suggested in the previous section, be prepared to listen as a vital part of upward communication (Timm & Peterson, 2000, p. 128). The sooner you have clearance to communicate, the more efficient the implementation will be. By nature, people tend to resist change and they see threats in the unknown (Timm & Peterson, 2000, p. 132). Make every effort to be able to explain if the merger and acquisition is makes sense from a strategic, financial, human resource, and individual employee perspective.
Once it is absolutely necessary to change the structure of the organization, follow these suggested guidelines (Bossidy & Charan, 2004; Caproni, 2005; IABC.COM; Timm & Peterson, 2000; and Petersen, 2009):
- Make sure you understand and embrace the reasons for the change. You are likely to be asked.
- Know what you can and cannot say.
- It may be appropriate to have a representative from Human Resources with you, both to witness and field related questions.
- Directly and succinctly present what exactly will happen.
- Explain to the employee that the company, or the division within the company, simply has to “confront reality.”
- Approach employees by sharing your own feelings. Suggested wording includes, “I, as you, thought we would be on solid ground, but I did not account for the possibility of what is now clear.” You may also say, “I have had to digest it, how it affects you, how it can affect our supervisors, and me.”
- Ensure employees have a chance to be part of the change management team if the bad news you are delivering is not that they will be losing their job. Explain that their job function might be changed.
- Recognize the employees’ achievements and acknowledge their success. Reassure them they can continue their achievement toward a “new success” under the guidelines and values of the new company.
- Open the opportunity for question and be honest, while not answering questions you cannot answer. Promise to inquire and tell the employee you will return with information when you have it, and then actually do it.
- Ask the employees for suggestions on how they think the company can adjust under the new circumstances.
- Give the employee time to digest the information, but thank them for their initial response.
- Tell them that you are available to address their concerns, and keep it that way.
Remain aware of the trade-offs that come from productivity once organizational change is made. It is possible that the employee who is laid-off could initially react positively but return with negative emotions the following day (Caproni, 2005, pp. 121-122). “Voice your understanding how difficult, even sad, this is for them and for their families” (Petersen, 2009). If necessary, have a crisis team available to answer any questions or offer emotional support (The human side, n.d.).
Knowing How to Deal with Emotional Employees
Today’s economic condition has made the job environment even more stressful than usual. On a scale of life events, those associated with job loss or change in work environment rate in the top ten (Swan, 2008). This influx of change in the workplace will significantly increase emotional stress on an employee, which a manager needs to be prepared to manage effectively.
Managers dealing with employees need to deal with emotional issues in addition to daily work activities. The manager who possesses developed emotional intelligence will be able to cope with the merger and the emotional reactions coming from employees like anxiety, uncertainty, conflicts and the challenge to continue to motivate (Caproni, 2005). In order to manage a group of employees faced with the prospect of a merger, there are some core principles to keep in mind to achieve success. These principles include (Stockdale, 2006):
- Be in constant, honest communication with employees.
- Provide resources for those who will be displaced or have significant changes to their job duties. It is critical to show employees that you, as their manager, have their interests in mind during the merger.
- Give assurances about change to the employee’s role in the organization. Ensure that the employee will still play a part in the department and its achieving set goals.
- Employ active listening techniques to hear employees. Work to take discernable action to address their concerns.
These key concepts will work to reassure employees while also providing a level of stability from their direct manager. A manager must be prepared for the employee emotions to run the spectrum from being scared to confused to angry (Stockdale, 2006). From an employee point of view, the sudden change brought about by a merger will call into question their role in company as well as the reciprocal loyalty element between employee and employer. There is a strong emotional attachment to a company’s culture and the employee expects some level of reciprocation of this relationship through a stable work environment and a semblance of loyalty (Siegal et al, 2006). Once this relationship is changed or perceived as broken by the employee, a manager needs to step in and act as an arbitrator to keep the employee-company relationship stable. It is at this moment the manager needs to remember the core principles mentioned heretofore in order to provide the needed reassurances to the employee to keep them focused on performing their job.
Guidelines for Managerial Motivation and Healing
Within a merger or acquisition a manager may come across conflict within his or herself. Their ability to lead a team during transition is key. Both before and during the transition it is important for a manager to spend time on self-reflection and analyzing their own role and performance (Tracy, 2009). Managers need to find ways to educate themselves (Zatz, 2009).
The foundation for a manager’s ability to self-coach should be rooted in the following principles (Tracy, 2009):
- Use upward feedback. Create an open channel for your subordinates to give both anonymous and specific feedback.
- Acquire self-coaching skills by incorporating a written exercise to visually see daily activities and the outcomes of each. For example (Tracy, 2009):
- Outline your goals and future plans ahead of time.
- Log daily activities and the outcomes you intent.
- Review the outcomes and the reasons for each.
- Critique yourself and analyze what changes could have been made to create a more effective solution.
- Seek advice from your direct subordinates as well as your own direct supervisors.
- Also, learn to delegate tasks to other employees. Delegating tasks can promote trust within your department (Caproni, 2005).
- Obtain education. Seek out courses that can help enhance your experience. Or, team with other managers who have experienced a merger in the past. Consult your network to educate yourself on their strengths and weaknesses.
- Analyze yourself. Have the ability to step back and examine your own abilities. Spend time each day reviewing your positive and negative traits.
The ability to deal with the rapid changes of a merger can greatly depend on the ability for self-evaluation. In order to effectively coach others, you must be able to educate yourself. A manager’s role within the company can change just as much as that of an employee. The ability to adapt is key to a successful transition. The adaptation comes when a manager can analyze their own performance and promote communication as an opportunity to further the newly acquired skills.
Follow these guidelines to communicating change and your organization is sure to maintain the support and loyalty from the people who are the powerhouse to the organization’s success during a merger or acquisition. A merger represents a significant organizational change that makes many employees react in an emotional manner. Managers need to recognize the unique issues during this time and work to stabilize the environment and employee emotions. Following these guidelines will build organizational credibility from management to the employees and keep the performance of the impacted employees at the same, or a better level prior to the merger or acquisition.
Applebaum, S., Lefrancois, F., Tonna, R., and Shapiro, B. (2007) Mergers 101 (part two): Training managers for culture, stress, and change challenges. [Electronic Version] ABI/INFORM. Industrial and Commercial Training. Guilsborough. Vol. 39. 4., p. 191
Bossidy, L. & Charan, R. (2004) Confronting Reality: Doing What Matters to Get Things Right. Crown Business [From Notes Taken February 2009]
Caproni, P. (2005) Management Skills for Everyday Life: The Practical Coach (2nd Edition). Upper Saddle River, NJ: Pearson/Prentice Hall
Charland, M. Brent. (2008) Innovapost executes on high-speed merger and acquisition activities. [Electronic Version.] ABI/INFORM Strategic HR Review. Chicago. Vol. 7. 6., p. 11
Fisher, J. R. Jr. (1999) Merging Cultures. [Electronic Version.] ABI/INFORM. Executive Excellence. Provo. Vol 16, 4., p. 12
Fryer, B. (2009) The Layoff: What’s the Best Strategy for Astrigio. HBR Case Study and Commentary. Harvard Business Review, pp. 2-7
IABC.COM (2009) Communication’s Role in the Merger Process. Retrieved November 2009 from: IABC.COM
Kummer, C. (2008) Motivation and retention of key people in mergers and acquisitions. [Electronic Version]. ABI/INFORM. Strategic HR Review. Chicago, Vol. 7, 6., p. 5
Michelman, P. (2005) Methodology: An Outsourcing Checklist. Harvard Business School Publishing Corporation.
Petersen, R. (November 26, 2009) Personal Communication with former Newspaper Editor with Managerial Experience on Management and Communicating Change During Mergers and Acquisitions. Escondido, CA.
Roach, C. (2007) Taking the Lead During a Merger. [Electronic Version] ABI/INFORM. Strategic Communication Management. Chicago. Vol. 11, 1., p. 8
Robbins, S. and Hunsaker, P. (1989) Training in Interpersonal Skills: Tips for Managing People at Work. Upper Saddle River, NJ: Prentice Hall
Siegal, D. and Simmons, K. (2006) Assessing the Effects of Mergers and Acquisitions on Firm Performance, Plant Productivity, and Workers: New Evidence from Matched Employer- Employee Data. Renssealaer Polytechnic Institute. Troy, NY.
Stockdale, D. (2007) Helping Employees through a Merger or Acquisition. Retrieved on November 23, 2009 from: http://www.myarticlearchive.com/articles/6/042.htm
Stone, D., Patton, B., & Heen, S. (1999) Difficult Conversations: How to Discuss What Matters Most. New York, NY: Penguin Books
Swan, P. (2008) The Top Six Stressor Areas in Life: How to Recognize and Handle the Stress. Retrieved on November 25, 2009 from: http://www.sixwise.com/newsletters/05/05/17/the-top-six-stressor-areas-in-life-how-to- recognize–amp-handle-the-stress.htm.
Szpekman, A. (2004) Guiding Principles During a Merger. [Electronic Version]. ABI/INFORM. Strategic Communication Management. Chicago. Vol. 8, 4., p. 9
The Human Side of Business Continuity Planning. (n.d.) Continuity Central. Retrieved February 13, 2009 from www.continuitycentral.com
Timm, P. and Peterson, B. (2000) People at Work: Human Behavior in Organizations. (5th Edition). Cincinnati, OH: South-Western College Publishing
Tracey, B.J. (2009) Helping Managers Help Themselves. Cornell Hospitality Quarterly. Cornell University
Valant, L. (2008) Why Do Both Marriages and Business Mergers Have a 50% Failure Rate? [Electronic Version.] ABI/INFORM. The CPA Journal. New York. Vol. 78, 8., p. 15
Zatz, D. (2009) An HR Manager’s Guide to Mergers and Acquisitions. Toolpack Information. Retrieved November 27, 2009 from: from www.toolpack.info/how-to/hr-managers- guide-to-mergers.html
Eric Tse, Richmond Hill, Toronto
Tse and Tse Consulting -Security, Identity Access Management, Solution Architect, Consulting