Four steps to a successful merger
Four essential steps contribute to a successful merger:
- Define ‘the prize’
The prize is the vision of a merged organisation, for example assisting more people, mounting stronger campaigns and providing better quality and more integrated services. The prize should become the touchstone which everyone can hold on to when negotiations become difficult. - Establish a process and timescale for negotiations
Timescales are important. They should be neither too long nor too short. The ideal is 4 – 6 months. Organisations should identify all the issues that might arise at the first meeting and then agree which ones need to be solved before the merger can proceed. The proposed process should anticipate that there will be difficulties and should therefore include a mechanism for resolving insuperable obstacles.
- Address the biggest obstacles early on in the process
Two common difficulties are the name of the merged organisation and who fills the key roles of Chair and Chief Executive. Inability to agree on any of these can bring the whole process to a grinding halt. These issues need to be raised early in the process, but not before good personal relationships have been established. - Recognise that cultural integration is the greatest challenge
There is ample evidence that a significant reason why mergers fail is the inability of the two organisations to integrate at a cultural level. People bring their own organisation cultures to the negotiating table and expect others to share their point of view, not realising that their organisation has different beliefs and norms.
Managers negotiating a merger need to be acutely aware of different ‘ways we do things’, to surface those differences and encourage discussion about what might be best for the newly merged organisation.