Change management in mergers and acquisitions: why and how

Mergers and acquisitions (M&A) can lead to an exciting, yet tense time for a company. Capabilities may be increased, and products and services can be diversified. However, the transition can cause stress and uncertainty for employees and decrease productivity for businesses.

A change management plan or strategy can help ensure you stay focused on top priorities, engage and empower employees, and reduce disturbances in the workplace. Many M&A fail because, although employees and company culture are highly valued by business leaders, these assets are not prioritized during a change. Learning how to effectively integrate and manage the change process enables organizations to be successful and gain a competitive edge in the market.

Benefits of a change management strategy

Company benefits

• Improved leadership and stakeholder alignment since silos are broken down and conflict is reduced

• Better assessment of change impact and potential challenges

• Less time required for implementation and adaptation

• Maintained organizational effectiveness and efficiency

• Reduced risk that the change will be unsuccessful

• Increased productivity and minimized issues during implementation of plan

• Decreased turnover since employees feel more valued

Employee benefits 

• Increased morale and positivity

• Improved cooperation, collaboration, and communication

• Reduced stress and anxiety, plus greater loyalty to the organization

• Greater support from management when raising concerns about changes

• Less disruption of daily responsibilities

Change management steps for mergers and acquisitions

Being prepared with a change management strategy can help organizations and their employees reap the maximum benefits from a successful merger or acquisition. Following change management best practices when creating a strategy can lead to smoother transitions.

The top 5 change management steps include:

1. Establish a change management team.

Organizations may assume that change management can easily fall under their human resources team’s current responsibilities. However, distracting your HR department from their other duties dealing with company basics can create collateral chaos. A separate, cross-functional team should be established that focuses on managing and leading all change related efforts in order to get the most out of a change management strategy.

2. Develop a change agent network.

Build a group of stakeholders who volunteer to use their passions and skills to help the change management team guide the adoption of change. They will serve as liaisons between their leadership, peers, and direct reports. They can help create and communicate a clear vision for the change. This will free up executive leadership to concentrate on other details of the merger or acquisition.

3. Create a plan.

Develop a comprehensive communications plan for your organization that will take your from announcing the merger, through completion of the transition. It should include a cadence around communications, training, and other important dates. Make sure this plan is openly communicated to all employees.

4. Develop training.

Once new business processes have been determined, it’s key to provide employees with training on any changes to their current role. By describing exactly what is expected of employees, or any new relationships in the new organization, companies can greatly reduce anxiety during the transition and setup employees for success in new roles.

5. Invest now.

Companies that are willing to spend the initial time and money on change management will see the higher return on investment after the merger or acquisition is completed. A workforce with high morale, correct training, and clear and consistent communication will be more efficient and effective. It will also prevent costly turnover of employees which is common during M&A.

The two goals of having a change management strategy are to minimize disruption and maximize profitability for all companies involved. By establishing and following a plan, empowering employees, and maintaining open and honest communication. All this, plus a change management team and change agent network to lead the change, will ensure the transition is as smooth as possible. Following the transition, you can begin integrating data.