Lessons for a Successful Merger or Acquisition by Jill Sweatman

Lessons for a Successful Merger or Acquisition by Jill Sweatman


There are some important lessons companies who wish to improve their profits, or simply stay in business, cannot afford to ignore. Especially if they are involved in a merger or acquisition. These lessons were brought sharply into focus recently while I was preparing a company for its float.

The organisation had plans to expand rapidly, by buying related Australian and foreign owned companies. Ten companies in total, combined to create cross selling and other strategic benefits.

To be able to fund the preparations for the float, they needed to raise venture capital. People who supply such funds are fondly called ‘business angels’. They fly in not only with money but loads of experience.  Sometimes they can mentor the company in which they invest. We were delighted to see these company directors loved the concept of being mentored and were impressed with the other plans. We were, however, puzzled that the dollars stayed in the pockets of these ‘angels’, covered securely by their tightly folded wings.

A little research revealed the reason – the investors were scared that the ten companies would each pull in opposite directions. In other words, that the cultures would clash.

In reality, could the promised benefits possibly come to fruition?  Tough questions were asked of the consortium:

  • Would these companies be at all willing to work together?
  • Could they see past their own practiced ways of viewing business to utilise the potential of internal synergies?
  • Would they be able to let go of their own protective egos and competitive natures to cross-sell within the group?
  • How would all this happen?

Our celestial friends were unwilling to part with any capital until they were satisfied that cooperation would be as transparent as the space inside any halo.

To support this objective, I was contracted as their corporate culture engineer. Here are some of my recommendations.  These, I believe, are useful to all companies to contract people to pull together.

  1. Plan a diverse internal communications strategy
    Many different forms of communication are needed to promote the ‘new order’ within groups. For example, a variety of newsletters, videos, breakfast discussions, seminars are worthwhile. To rely on only one or two forms of communication risks not having all people on board. People need a message repeated, often more than once, in a way that is meaningful to them. And, when you think you’ve communicated enough, communicate some more.
  2. Protect your change agents
    There are always a few people in any organisation who are leaders and work to make the changes. Their position is often a seemingly thankless one: people are quick to be critical and resistance to the message can be strong. Some may even think that these change agents betray what made the company great in the past.It is not always that the critics want to be difficult, it’s just that the mind and the heart engage at different rates.Sure, we can rationalise the change, but the change means doing different things. Or doing things differently, therefore, we have to actively think differently.

    The change agents must be given full support by senior management. This same management team may, themselves, be struggling with the memories of the past. It takes time to create a compelling vision and have it digested by a critical mass.

  3. Encourage challenge and opposition!
    As bold as it sounds, please read on.  Being cooperative and participative do not, in themselves, guarantee a productive workplace. Examine this saying, “If two people in a meeting agree, one of them is redundant.” Think about that.Maybe ‘opposition’ is a strong word. Yet for what I suggest, it is the opposite of ‘group-think’ and the promotion of ‘yes’ men and ‘yes’ women. What I suggest is the open, vital, spirited evaluation of a project by each individual concerned. Encourage high discussion of those varying views. It is far better to get things out on the table, off chests and examine things from different perspectives. Good healthy debate of all ideas. Engagement invites debate, critical thought and supportive behaviours.Challenge and opposition, done well, for fair reasons and with respect, may be some of your greatest achievements in developing your people and your business.

Allow the Stimulation of Conflict in Debate

Organisations must be aware of the pressures that come into force when significant decisions need to be made.

Allow your people the license and the latitude to experience a degree of stimulating conflict. The kind of conflict that promotes a sense of urgency, the necessity to look for alternative ways of behaving and thinking. Healthy conflict, in other words. This will help people move away from only thinking about product and move towards different ways of working.

Regardless of how long a company has been in business, it should look to think constantly about questioning itself in order to be the very best it can be.

Surround yourself with people who will challenge you to be better, justify your thoughts and actions and expect you to rise to the occasion, on every occasion.  They are your coaches. Expect more from their challenges and expect more of yourself.  Stay sharp and at the edge, rather than slip back into complacency and thinking old ways.

The High Cost Of Failure – A Case Study.
Failure to understand and escalate ‘challenge and opposition’ in appropriate ways cost one organisation seven lives and hundreds of millions of dollars.  Loss of faith, integrity, delays, abandonment of frontier exploration.The organisation? NASA. They got it wrong – very wrong, when on the morning of 8th January 1986, the space shuttle ‘Challenger’ exploded 72 seconds into its flight. Under inflated and pressured expectations from the public and the NASA teams themselves, disaster struck.  One entity suggested the focus was more on the social identity of NASA, rather than ensuring critical evaluations necessary for high quality decisions. Quality decisions of the calibre that should never be compromised. Compromised they were, at the immediate expense of precious lives and a tarnished reputation indelibly printed on the pages of history.

Can you afford just one cent of this assault on your reputation?
Then invite challenge and seek differences of opinion.
It may save your company…or a life.

Written by Jill Sweatman


+61 (0)411 11 55 99

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