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Mergers, takeovers and human sacrifices

Mergers, takeovers and human sacrifices

I am not a big fan of merging two financially viable organizations because it ultimately means the merging of two strong cultures.  There is an economic and human side to a merger.  Typically, the economic arguments win in spite of the human costs. You can merge two companies from a legal and financial perspective in just a few weeks.  The human side of a merger can take several months, if not years.

The finance group will focus on combining synergistic activities to take advantage of the economic savings by running two companies from one entity.  Meanwhile, the battle of two company cultures will have begun.  The intensity of the battle will increase when jobs are on the line.  The expense of a culture war will not have been accounted for in the merger’s financial forecast.  A culture war can get very messy – ugly – nasty – cutthroat – toxic – especially when the two companies both have strong cultures. The customer is not an employee’s number one priority when caught in the middle of a job-threatening culture war.

Eventually the dominant culture will win the battle – not necessarily the best culture.

The long-term financial success of an organization – the best companies in America – focus on creating positive company cultures. A dominant culture may win the internal battle yet lose the external, long-term, financial war.

My advice: If you are involved in a merger, reassess the human side of the transaction.

 

Kevin Kennemer is founder of The People Group based in Tulsa, Oklahoma. Kevin is driven by his passion for company owners and their need to earn a profit, employees' desire for a positive and fulfilling work experience, and the community that benefits when both groups do well.

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