Increase Chances of Success with Mergers and Acquisitions (M&A)

Mergers and acquisitions (M&A) are complex and risky business deals. Studies show that up to 90% of M&A deals fail to deliver the desired outcomes. However, companies can increase their chances of success during M&A by empowering their teams. Empowered employees are more motivated, productive, and adaptable to change. In this article, we'll explore some best practices for empowering teams during M&A and provide real-life examples of how these strategies have led to successful outcomes.

The Importance of Team Empowerment During M&A

M&A deals can create uncertainty and anxiety among employees, which can lead to decreased morale and productivity. However, research shows that deals that prioritize employee morale and productivity are more likely to succeed. When employees feel empowered and engaged, they are more likely to remain productive and motivated, even during times of change and uncertainty.

Best Practices for Empowering Teams During M&A

Communication and Transparency

During times of change, employees crave information and certainty. By keeping them informed about the M&A process and the potential impacts on their roles, businesses can help to ease anxiety and increase engagement. Communication and transparency are key. It is important to address employee concerns and answer their questions truthfully and completely.

Verizon's acquisition of AOL in 2015 was driven by the telecommunications giant's desire to expand its digital advertising capabilities. However, the two companies had very different cultures and ways of working, which presented a challenge for the integration process.

To overcome this challenge, Verizon implemented a program called "One AOL," which focused on bringing together employees from both companies and creating a more collaborative and integrated work environment. The program included a number of initiatives designed to encourage collaboration, including:

1. Cross-functional teams: Verizon and AOL employees were organized into cross-functional teams focused on specific business objectives. These teams were made up of employees from both companies and were tasked with working together to achieve their goals.
2. Mentorship program: The "One AOL" program also included a mentorship program, which paired employees from both companies with mentors who could provide guidance and support as they worked through the integration process.
3. Regular town hall meetings: Verizon and AOL held regular town hall meetings to update employees on the integration process and provide an opportunity for employees to ask questions and share feedback.

By implementing these initiatives, Verizon was able to create a more collaborative and integrated work environment that enabled employees from both companies to work together effectively. This, in turn, helped to ensure a smooth integration process and positioned the combined company for future success.

Addressing Employee Concerns

Identifying and addressing employee concerns is critical during M&A. Encouraging open and honest communication can help to identify potential roadblocks and issues that may arise during the M&A process. By addressing these concerns proactively, businesses can minimize disruptions and ensure a smoother transition.

When Disney acquired Pixar in 2006, it faced the challenge of integrating two distinct cultures with different ways of working. However, instead of imposing its own culture on Pixar, Disney recognized the importance of preserving Pixar's unique creative culture, which was seen as critical to its success.

To do this, Disney implemented a number of initiatives designed to encourage collaboration and teamwork between the two companies. Some of these initiatives included:

1. Maintaining Pixar's autonomy: Disney recognized the importance of Pixar's unique culture and creative process and allowed the company to maintain its autonomy within the larger organization. Pixar's leadership was also allowed to maintain a high degree of control over the creative direction of its films.
2. Creating cross-functional teams: Disney and Pixar employees were organized into cross-functional teams focused on specific projects. These teams were made up of employees from both companies and were tasked with working together to achieve their goals.
3. Regular communication: Disney and Pixar leadership held regular meetings and conference calls to discuss the integration process and ensure that both companies were aligned on their goals and objectives.

By implementing these initiatives, Disney was able to successfully integrate Pixar into its organization while preserving the unique culture and creative process that had made Pixar successful. The collaboration and teamwork between the two companies also helped to drive the success of films such as "Toy Story 3," which became one of the highest-grossing animated films of all time.

Providing Training and Resources

Providing training and resources is another important strategy for team empowerment during M&A. Training can help employees to adapt to new processes and technologies, while resources such as tools and software can help to streamline workflows and increase efficiency.

Dell's acquisition of EMC in 2016 was one of the largest tech mergers in history. To ensure a smooth transition for employees, Dell implemented a program called "Leadership Expectations and Actions Program" (LEAP), which focused on leadership development, training, and mentoring opportunities for employees.

Under LEAP, Dell and EMC employees were given access to a variety of leadership development opportunities, including training sessions, coaching, and mentorship programs. These programs were designed to help employees develop the skills and knowledge they needed to succeed in their new roles and work effectively as part of the newly merged organization.

LEAP also emphasized the importance of collaboration and teamwork, with a focus on breaking down silos and encouraging cross-functional collaboration. This was achieved through initiatives such as regular team-building activities and communication forums where employees could share ideas and feedback.

By implementing LEAP, Dell was able to create a more engaged and motivated workforce that was better equipped to handle the challenges of the integration process. The focus on leadership development and collaboration also helped to create a strong and unified culture within the newly merged organization, which has contributed to its ongoing success.

Encouraging Collaboration and Teamwork

Encouraging collaboration and teamwork is key during times of change. Employees may feel isolated or disconnected from their colleagues during M&A. By promoting collaboration and teamwork, businesses can foster a sense of unity and shared purpose among their teams.

When AT&T acquired DirecTV in 2015, they faced the challenge of integrating two large and distinct companies with different cultures and business models. To ensure a smooth transition, they implemented a program called "Team of Teams," which encouraged collaboration and teamwork across the newly merged organization.

Under the program, AT&T and DirecTV employees were divided into small, cross-functional teams with representatives from both companies. These teams were tasked with working together to solve complex problems and complete strategic initiatives. The teams were also encouraged to communicate and collaborate regularly, which helped to break down silos and foster a culture of collaboration across the organization.

The "Team of Teams" program proved to be highly successful. According to reports, it helped to increase productivity, reduce costs, and improve customer satisfaction.

Celebrating Successes and Milestones

Celebrating successes and milestones can help to boost morale and motivation. By recognizing and rewarding employees for their hard work and achievements, businesses can help to create a positive and supportive work environment.

When Microsoft acquired LinkedIn in 2016, one of the key challenges was integrating two very different company cultures. To help overcome this challenge and foster a positive work environment, Microsoft implemented a program to celebrate successes along the way.

This program recognized and rewarded employees for their hard work and achievements throughout the integration process. This included recognizing teams and individuals who had achieved significant milestones or made key contributions to the integration effort.

Celebrating successes helped to create a positive and supportive work environment, which in turn helped to drive engagement and collaboration between employees from both companies. This was particularly important given the differences in culture between Microsoft and LinkedIn, as it helped to build trust and create a sense of common purpose.

In addition to celebrating successes, Microsoft also implemented a number of other initiatives to encourage collaboration and teamwork. For example, they created cross-functional integration teams that included employees from both companies, and provided training and development opportunities to help employees develop the skills they needed to work effectively as part of the new organization.

By implementing these initiatives, Microsoft was able to successfully integrate LinkedIn into its organization while preserving the unique culture and identity of the company. The focus on celebrating successes and creating a positive work environment helped to build trust and collaboration between employees from both companies, which has contributed to the ongoing success of the combined organization.

Conclusion

Empowering your team during M&A is crucial for success. By prioritizing communication, addressing employee concerns, providing training and resources, promoting collaboration, and celebrating successes, businesses can create a positive and supportive work environment that sets the stage for a successful M&A deal. The real-life examples we've discussed demonstrate how these strategies can lead to successful outcomes. By prioritizing team empowerment, businesses can not only improve their chances of success during M&A, but also create a strong, motivated, and engaged workforce that can thrive even in times of uncertainty and change. As such, it's essential for businesses to focus on team empowerment as a key element of their M&A strategy.