By Dennis and Michelle Reina
Mergers and acquisitions ("M&As") are on the rise in 2011, and industry analysts now predict more than $3 trillion in global M&A activity for the year. By all accounts, 70 percent of M&A deals fail to create value and, according to one recent study, half even destroy value.
So, why do the majority of M&As fail?
Simply: the people side of the deal is often ignored or overlooked. As a result, employees—who, at best, feel marginalized—lose all trust in leadership. An us-against-them mentality ensues and workers withhold the very talent and energy required for success.
The good news is that executives can easily circumvent the trust-busting failures of leadership during M&As. Here are seven such failures and how to avoid them:
1. Failure to acknowledge what’s happening
Pay attention to the warning signs of broken or eroded trust. Are workers disengaged? Are teams missing targets? Are business units operating in silos? Acknowledge that you know the situation hasn’t been easy. Tune in to how people respond, and show them that their views matter.
Provide employees with non-threatening environments to express their feelings so emotions don’t go underground. Regular feedback sessions at all levels can help people reflect on where they’re at; their confidence, commitment, and energy, and what it will take to regain it. Additionally, employee surveys and focus groups can be beneficial.
3. Failure to provide information
Make sure no one is moving ahead blindly. Help employees feel involved and in the know by sharing as much as information as possible. By tuning in and really listening to people, you’ll be able to communicate in ways that are most relevant to their primary needs and concerns.
4. Failure to put the situation into a larger context
Help workers see the bigger picture by sharing the business reasons behind the merger or acquisition—why it’s happening, what makes it the best course of action, and how the company will be better as a result. In addition, encourage people to look at how their individual choices can help their own situation.
5. Failure to take responsibility
Own up to your mistakes and, by creating a safe, open environment. Acknowledge lessons learned and commit to concentrating on problem solving, not blaming.
6. Failure to help people move on
Challenge employees to buy into the company’s future, starting with the new opportunities it offers them. With some encouragement, they can choose to look forward rather than stay stuck in the past. A key ingredient here is engagement—helping people reenergize and recommit.
7. Failure to walk the talk
Successful M&As demand artful, authentic leadership that consistently walks its talk. If your actions and behaviors don’t match the vision and values you claim for yourself and the company, your credibility as a leader is lost and the combined corporate mission is nothing more than meaningless words.
Dennis and Michelle Reina, PhDs, are experts on workplace trust and co-authors of "Rebuilding Trust in the Workplace" (Berrett-Koehler) and "Trust and Betrayal in the Workplace" (Berrett-Koehler). They are co-founders of the Reina Trust Building Institute, a global enterprise specializing in measuring, developing, and restoring workplace trust. Contact them at www.reinatrustbuilding.com.
Dennis S Reina: Rebuilding Trust in the Workplace: Seven Steps to Renew Confidence, Commitment, and Energy
Meagan Johnson: Generations, Inc.: From Boomers to Linksters--Managing the Friction Between Generations at Work
Vanessa Hall: The Truth About Trust in Business: How to Enrich the Bottom Line, Improve Retention, and Build Valuable Relationships for Success