What are the problems that organisations face due to merger and acquisition? originally appeared on Quora: the place to gain and share knowledge, empowering people to learn from others and better understand the world.
The problems an organization faces due to merger and acquisition can be relatively minor, involving structural and cultural adjustments that don't feel seismic. But sometimes, the results are devastating.
I was relatively young and had no warning. I imagined that our startup getting acquired would be a dream. But , it led to the end of everything we had worked for.
The loss of team mentality
Today's employees care a great deal about company culture. When you work at a relatively small startup, that culture is usually about a sense of being a team. That mentality keeps you going as you do the hard work of building the brand. If your organization becomes attractive enough to be , it's usually because you've spent years pouring heart and soul into it.
Acquisitions change all that. In a buyout, it's generally just the owners who become rich. Despite common misconceptions, most employees don't receive a life-changing amount of money.
So acquisition talks can erase the team mentality almost overnight. You no longer feel that you're working for something you all have a stake in. Now, you're working to make your founders rich.
The dangers of inflating value
This gets worse if your business looks to quickly ramp up sales and erase expenses to an unrealistic extent. Doing so can inflate the perceived value, making the organization look like it's worth more than it really is. But inside your organization, that means exhaustive, stressful extra work for all your employees - with no end to it in sight.
As VP of sales, I was told to push extra hard on all our metrics. Our teams started working around the clock. Formerly happy, engaged employees were quickly becoming miserable. They wanted out.
Triggering dishonesty in relationships
is important in the workplace. It can make or break relationships. But our bosses instructed us to pretend our suddenly higher metrics were accurate projections for the long-term future. As head of sales, I was to take the lead in conveying that message.
So when I met with a top official at the corporation looking to buy us out, I stuck to the script. My body language probably made clear how uncomfortable I was. The executive later told my founders that he didn't have a good feeling about me. When that news was then passed on to me, I felt like a casualty and started to grow a chip on my shoulder. That was the beginning of the end for me.
The biggest problem many organizations face in mergers and acquisitions is a lack of planning around integration.
When our buyout went through, I was tasked with integrating our sales operations with those of the larger company. That's when I discovered that in all the behind-the-scenes negotiations, no one had even considered what it would actually take to mesh these two very different business operations.
We used different technologies, and there was no plan to merge them. There was no centralized database of information for us to access. The corporation didn't even have accurate client lists available. I worked hard to create systems we could all follow, but I was operating alone with no support.
The bigger problems with integration were cultural. We operated at a different pace. Our startup got projects done and out the door in days; the larger corporation took months. Their longtime employees also had no incentive to coordinate with us.
When the early post-acquisition sales results weren't impressive, I was blamed. I was offered a demotion but turned it down. I had to accept that the startup I had loved didn't exist anymore. Driving home, I pulled over to cry in a parking lot.
Ultimately, for me it worked out for the best. A great new opportunity came right up, and I kicked off a as a sales trainer. But the acquisition did not work out well for our startup or for the corporation.
For leaders of startups and enterprises who are considering acquisitions, some advice: Always have a point person on each end who is involved in the process and focused on integration. These two people together must be empowered with the authority to get things done.
Also, top officials at both companies must get frequent updates about the challenges they're facing. And amid the process, be sure to keep your employees - your team - updated and in the know. Listen to their concerns. Work with them. In short, don't forget the people who got you there.
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