In the previous chapter, before merger and premerger stages were discussed. Now we move on to the during merger and postmerger stages of the time-line model of merger process.
During the Merger Stage
The “during merger” stage is the most chaotic, as at this stage reality hits home. Communication and consultation started at the premerger stage, continues. The executives manage a transformational change while trying to keep the disruption to customer services to a minimum. Senior executives convene meetings with staff groups to explain the decision and to reassure them about the quality and consistency of customer services. At the same time, the senior executives have to deal with staff morale and convince them to carry on offering the same high-quality service. Staff morale is lowest at this stage of the merger.
Communication in some cases becomes a mechanism to vent the frustration and to allay the fears. Both sides, senior management implementing the change and staff affected by the change, feel that their message is not being heard. Senior executives continue reminding staff that they are aware of the disruption and change is necessary for the organization. They make themselves available to answer questions. Staff find that the answers to the questions asked fall short of reassurance. For the questions, like “will my job profile change,” “will I have to relocate,” “will I even have a job at the end of this integration process?” Management clearly are not in a position to answer these questions. If the questions are not answered in a satisfactory manner, the concerned staff members sometimes conclude that the “management has something to hide.” They may see the staff consultation and engagement exercise as sham.
Senior executives understand the stress and uncertainty experienced by staff members, but they maintain that some of the questions relate to the postmerger restructure, which will be finalized at a later stage in consultation with the merger partners. Therefore, even the executives may not know the answers to those questions. This can lead to all sorts of interpretations and rumors. In addition, the nature and frequency of questions can change on a daily basis depending on what staff members hear from each other and who they choose to believe. Senior executives have to concentrate on the merger process and cannot engage in staff consultation on a daily basis. The unanswered questions and the inherent uncertainty add to the mistrust between staff and senior executives.
Operational managers are rarely consulted in the merger process, but are made responsible and accountable for the standard of service without providing additional resources, in most cases with fewer resources. As staff take early retirement or resign to move on to other jobs, the vacancies are not filled straight away because the postmerger organization structure is not finalized. Customers expect more but organizations fail to adapt business practices to shifting expectations and this sends out a wrong message. Some experienced staff members who do not want to go through the uncertainty take early retirement or change jobs. New staff members are not recruited because of the time delay in finalizing postmerger organizational structure. Some staff members go on stress-related sick leave.
Some organizations bring a team of experienced professionals to handle the integration process. Operational managers report to these integration specialists. To some extent this allows operational managers to focus on day-to-day running of their departments while the change-related issues are handled by specialists. However, these specialists are seen as “parachuters” with little knowledge or understanding of the work and contribution of individual staff members. Nevertheless involving specialists does bring some order and normality to the otherwise disruptive and chaotic environment.
Coffee machines, photocopiers, and quiet corners in the staff canteen are used to share the gossip and rumors as well as an opportunity by managers to provide some between the lines reassurance to key staff members. Words to the effect “you should not worry,” “I think your job is safe,” and so on are whispered to some staff members. Nevertheless, these reassuring messages come with a caveat “of course, I am not in a position to offer 100% guarantee, because it depends on the final restructure.” As these “quiet words” do not provide cast iron guarantee, staff remain anxious and nervous. However, this constant communication is important to avoid paralysis and to maintain morale.
As postmerger structures are finalized in various departments, surplus staff start leaving. Senior executives and operational managers must treat these staff members with dignity, respect, and support they deserve. These people are not only losing their jobs but also long-standing friendships and social connectedness are affected. The leavers go through a range of emotions, including anger, pain, confusion, and disillusionment. Unless they are in a position to find an alternative employment fairly quickly, their self-esteem becomes precarious leading to powerlessness, depression, and fear. Therefore, senior management have to adopt a caring and considerate approach. Not only because this approach is the humane thing to do but also to send a positive message to other staff that their friends and former colleagues are respected and supported.
Coaching or mentoring during the merger process stage are not used for the following reasons: (a) staff availability: fewer, overworked, stressed staff members are responsible for delivering day-to-day services, hence cannot be made available to attend coaching or mentoring sessions, (b) the element of mistrust discussed earlier, (c) the focus of the management is to deliver the merger within a set timescale, so staff development at this stage is not a priority, and (d) coaching or mentoring might not provide the answers sought by staff members.
Postmerger Stage
Coaching and mentoring in various forms can be used by the organizations at the postmerger stage. One-to-one coaching and executive mentoring for the development of first time directors following the postmerger restructure, confidence coaching for senior executives wishing to implement a new organizational culture, team coaching to foster joined-up thinking and to manage emotional sensitivity, induction mentoring to infuse organizational values, peer mentoring to support staff through the changeover and a combination of coaching and mentoring interventions as part of transformational change programs. For a merger to be successful, the executives must have a clear understanding of their customers and clients, develop procedures, and train staff to serve the customers.
To implement rearranged reporting and redesigned business processes, it is vital that staff are fully trained and have the supervisory support mechanism for the prompt resolution of any teething problems. There is a risk that staff might revert to the old way of working because of lack of clarity, cumbersome procedures, training deficiencies and inadequate follow up, and postimplementation audit. Staff members can be given the ownership of change, by involving them in developing new processes and reporting mechanisms. Developmental needs identified can be met through training, development, coaching, mentoring, and other interventions. However, at the end of this process, all staff members have to take responsibility for the implementation of the changes, relevant to their job profile. Root causes for any noncompliance must be established and swift corrective action must be taken.
Human resources departments have a role to play as well. With the new organizational structure, new job profiles, and specifications should be created to reflect the new structure. Staff appraisals, annual reviews, and other performance evaluation criteria should be aligned. Human resources department should articulate the strategy and cultural values of the newly merged organization, up and down its corporate structure. Effective implementation of processes and procedures can prevent merger failures.
The difference between a full merger failure and partial merger failure can be influenced by the level of postmerger integration. If the merged organizations keep running their premerger operational systems in parallel for logistical or technological reasons, then postmerger integration is minimal. Running premerger operational systems in parallel does not deliver cost savings and anticipated synergies but it does give the management strategic flexibility of a smooth and nondisruptive demerger in future. On the other hand, if the motive or circumstances of the merger do not require demerger flexibility, then postmerger integration at all levels is vital. Without that, merger or acquisition will be a failure. Therefore, a greater focus on postmerger integration can reduce merger failures.
The importance of cultural differences and the distinctiveness of the social identities of employee groups pose a potential threat to the success of a merger. Coaching and mentoring play an important role in the initiation, execution and management of acquisitions, mergers and transformational changes. Coaching and mentoring can have an impact on the success or failure of a transformational change if it is used for staff and systems integration at the postmerger stage. Coaching and mentoring can lead to smooth postmerger staff integration. Confidence coaching can help in creating a new shared identity for the merged organizations. One-to-one executive coaching and executive mentoring are used by the chief executives to explore viable alternatives, potential merger partners, and the impact of the merger on customers.
Mergers and transformational changes intensify emotional sensitivity among staff at all levels but this affects individuals in different ways. Team coaching is used to deal with contrasting emotional situations that result from the mergers. It is not unusual for staff to try to suppress their emotions, stick together with their premerger colleagues, and not fully embrace the postmerger team structure. At the same time, some staff members can become oversensitive and avoid full and frank discussions on thorny issues such as postmerger team structures and budgetary allocations.
A symbolic yet emotionally powerful strategy is the creation of a new group identity for all the merged organizations within the group. A new group name and a new group logo jointly developed and adopted by the merged organizations can ease the postmerger integration. Yet, at the same time, premerger names and logos are also kept and installed side by side with the new logo. By maintaining the existing identity of all staff by keeping the names and logos, it is ensured that their social identity is not lost, while at the same time, a new group identity is introduced. This “dual identity” or “an identity within an identity,” contributes to the success of the merger. Therefore, success of a merger can be linked to the swift transition and effective management of human factors.
Team coaching is used to overcome these different situations that result from emotional sensitivity. In some departments of the same organization, team coaching might be used to bring different team members together, to enable them to see things from each other’s perspective, and to work together as a team. Whereas in another department, the team coaching might be used to encourage healthy confrontation and challenge, if emotional sensitivity is seen as restraining innovation.
Team coaching in the merged organizations facilitate repeated interactions among staff. Repeated interactions are crucial elements of the theory of dynamic team leadership. However, these interactions are hard to accomplish soon after the merger, because it is common for organizations from different cities, states, or even countries to merge. It takes time to move to a central postmerger group head office because of the logistics, the contractual obligations such as leases, and the amount of time taken to establish a new organizational structure.
Team coaching can bring senior managers from different departments into physical proximity, enabling face-to-face meetings with their counterparts when attending team coaching sessions. This helps in discussing some issues face-to-face rather than over the phone or via e-mail. Therefore, team coaching sessions can provide repeated interactions for geographically dispersed teams. Furthermore, members of multiple teams can be coached together to enhance joint accountability and cohesiveness by being provided with reflective space in a supportive environment. It enhances team effectiveness; empowers teams to generate results; and adopts appropriate approach for creating lasting change. Team coaching can be used to mollify emotionally charged situations as well as to kindle difficult conversations among team members after a merger.
On a practical level, the diverse range of human emotions following the merger needs to be recognized by senior executives. The issues underlying emotional sensitivity should be explored and addressed in a compassionate and supportive environment by professional coaches. However, there is generally an air of caution regarding organizationwide programs. Senior executives have to pay attention and balance the training and development needs of staff while ensuring the provision of a consistent high-quality service to customers. Since the transformational change programs are normally delivered during working hours, that would mean providing a skeleton service structure for customers while staff are on training courses, is a challenge. In addition, chief finance officers might think mergers to be a business decision, driven by the organizations’ strategic vision. The “cost” of providing coaching and mentoring must justify the “value” it adds to the merged organizations.
Managing a transformational change program for all the management and leadership teams is a real balancing act for the coaches too. The coaches would like to provide as much help and support as required by the coachees, but they have to make a decision about face-to-face contact time versus other modes of support. One option can be to deliver one-to-one coaching for the executive team and face-to-face vocational qualification workshops for junior to middle managers, whereas additional coaching support via virtual means.
Magnitude and frequency of changes in many organizations is fascinating. The transformational change programs discussed in this book do not show individual growth in isolation or without making a mark on an organization itself. Therefore, the transformational change programs have the attributes of both transformational change and transformative learning.
A coach and a mentor understand the importance of human factors and the stress and anxiety caused by the mergers. However, it is easy to underestimate the intensity of human emotions at play during the merger process. On the one hand the emotional sensitivity brings employees closer together, but on the other hand the commissioning of coaching and mentoring can be seen by staff with mistrust and called a “management gimmick.”
This time-line model provides the practitioners (coaches, mentors, and trainers) with evidence on which to base their services and provides researchers with an opportunity to develop a formal theory. This model enables coaches to reflect on their own practice, how coaching and mentoring are used in organizational mergers and acquisitions and how the time-line model can be integrated into their coaching and mentoring services.