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A journalist who is writing an article on mergers and acquisitions, asked me "What should middle managers do when their company is being acquired?"

Knowing that merger and acquisition situations are uncertain, dangerous, and often frightening to employees, my first response was, "Keep your head down". The journalist replied that most people had suggested that employees keep a high profile and offer their help.

That was better advice, partly because it probably is worth advertising yourself to the new managers so you will be noticed, but more important is the offer of help, because the incoming managers truly don't know what to do.

In the best of times managing a complex company is filled with uncertainty. It's the rare manager who understands how to read, and then interpret, the forces shaping the cultural currents that sweep the company in one direction or another. This leadership problem is magnified for managers facing a newly acquired company, of which they know practically nothing. They need help, and it should come from the place of most knowledge—from the managers in the acquired company. Here is an example.

In 1999 I was working with the Northern California warehousing and distribution managers of Fortune (name changed), a retail chain, when it was acquired by a competitor, Allied (name changed). Anticipating what would happen if they did not act, I urged the Fortune managers to take control of the merger process before the Allied team came on-site. They were apprehensive, "What could we do? Do we have the authority to do anything? What if we do something and they change it? Who should we ask? etc., etc."

But they were a sophisticated leadership group, that over three years had built open communications and strong relationships at all levels of their Division. So they agreed to meet regularly to discuss the acquisition, the likely consequences, and what they might do.

The early discussions, often about details, evolved into a realization that they could best serve the merger process by acting as facilitators between the two companies. They planned a series of meetings and invited the leadership from both companies to meet, identify issues, and make decisions. They also decided to present the same open and inviting stance they had learned while working with Meridian Group, not the defensive or protective one they had left behind.

It was well known that Allied had a very centralized leadership style, concentrated in their mid-west headquarters. Their middle management was used to taking orders and giving orders. They did not use, nor understand, participatory decision-making.

The incoming Allied management team accepted the Fortune manager’s invitation to meet, but at the initial meeting I could tell from the Allied manager’s words and faces that they found the experience confusing. Understandably, they had expected to meet people like themselves, managers who acted defensively, withholding information, jockeying for position, and highly deferential to superior authority. Instead they met a deliberately relaxed, friendly, open, candid, and non-deferential management team.

I was concerned by this because I know that authoritarians usually interpret open behavior as weak. It tempts them to go for the jugular. Indeed a few of the younger managers from Allied were provoked by what they thought was vulnerability in the Fortune managers, and became openly hostile and aggressive. But the Fortune managers knew better than to react to this. While they were concerned about the hostility, they controlled their impulses and maintained the open dialog, which, over several meetings persuaded most, though not all, of the Allied team to act similarly.

After several meetings I felt that the Allied vice president recognized the maturity of the Fortune managers, the sophistication of the process they had initiated, and the major benefits it was bringing to the merger. But he had another problem. Above him was Allied’s top management that tolerated no challenge to their decrees. He rightly saw the dialogue of the joint meetings as a potential problem if it moved in a direction that conflicted with directives from his bosses, or with his own plans.

These joint planning meetings, conducted over several months, had many rough spots but when the dust settled the Allied vice president said that the Northern California Division merger process had been the smoothest and most successful of the many Divisions under his authority.

Mergers, acquisitions, restructuring, downsizing, and off-shoring, have a similar effect on all managers and employees. They can introduce a barely tolerable level of uncertainty. But when people know that their voice will be heard, that their experience and concerns will be included in the decision process, they will most likely stay engaged, accept the outcome, and be motivated to make it work.

The experience for the acquired managers and employees will be very different if the acquiring company has an open and participative culture, versus if its culture is autocratic. When an autocratic company is acquired by a participatory company the acquired managers are often pleasantly surprised. And visa-versa.

To me the Fortune/Allied Northern California merger was yet another example of how the right process leads to the best outcomes.

I hope you find the newsletters interesting and useful. If you have comments or questions, please email me barry@meridiangrp.net

If you want new tools to improve your workplace, you will find them in this book. A 187 page toolkit of practical information and examples. For more information on the book, click on the Amazon logo.



	Site Map \| FAQ \| Search A Better Workplace --- Meridian Group's Newsletter, Number 44, 5-15-05
	__________________________________________________________ Mergers and Middle Management A journalist who is writing an article on mergers and acquisitions, asked me "What should middle managers do when their company is being acquired?" Knowing that merger and acquisition situations are uncertain, dangerous, and often frightening to employees, my first response was, "Keep your head down". The journalist replied that most people had suggested that employees keep a high profile and offer their help. That was better advice, partly because it probably is worth advertising yourself to the new managers so you will be noticed, but more important is the offer of help, because the incoming managers truly don't know what to do. In the best of times managing a complex company is filled with uncertainty. It's the rare manager who understands how to read, and then interpret, the forces shaping the cultural currents that sweep the company in one direction or another. This leadership problem is magnified for managers facing a newly acquired company, of which they know practically nothing. They need help, and it should come from the place of most knowledge—from the managers in the acquired company. Here is an example. In 1999 I was working with the Northern California warehousing and distribution managers of Fortune (name changed), a retail chain, when it was acquired by a competitor, Allied (name changed). Anticipating what would happen if they did not act, I urged the Fortune managers to take control of the merger process before the Allied team came on-site. They were apprehensive, "What could we do? Do we have the authority to do anything? What if we do something and they change it? Who should we ask? etc., etc." The Acquired Managers Take Control of the Process But they were a sophisticated leadership group, that over three years had built open communications and strong relationships at all levels of their Division. So they agreed to meet regularly to discuss the acquisition, the likely consequences, and what they might do. The early discussions, often about details, evolved into a realization that they could best serve the merger process by acting as facilitators between the two companies. They planned a series of meetings and invited the leadership from both companies to meet, identify issues, and make decisions. They also decided to present the same open and inviting stance they had learned while working with Meridian Group, not the defensive or protective one they had left behind. When the Buyer is Autocratic It was well known that Allied had a very centralized leadership style, concentrated in their mid-west headquarters. Their middle management was used to taking orders and giving orders. They did not use, nor understand, participatory decision-making. The incoming Allied management team accepted the Fortune manager’s invitation to meet, but at the initial meeting I could tell from the Allied manager’s words and faces that they found the experience confusing. Understandably, they had expected to meet people like themselves, managers who acted defensively, withholding information, jockeying for position, and highly deferential to superior authority. Instead they met a deliberately relaxed, friendly, open, candid, and non-deferential management team. I was concerned by this because I know that authoritarians usually interpret open behavior as weak. It tempts them to go for the jugular. Indeed a few of the younger managers from Allied were provoked by what they thought was vulnerability in the Fortune managers, and became openly hostile and aggressive. But the Fortune managers knew better than to react to this. While they were concerned about the hostility, they controlled their impulses and maintained the open dialog, which, over several meetings persuaded most, though not all, of the Allied team to act similarly. After several meetings I felt that the Allied vice president recognized the maturity of the Fortune managers, the sophistication of the process they had initiated, and the major benefits it was bringing to the merger. But he had another problem. Above him was Allied’s top management that tolerated no challenge to their decrees. He rightly saw the dialogue of the joint meetings as a potential problem if it moved in a direction that conflicted with directives from his bosses, or with his own plans. These joint planning meetings, conducted over several months, had many rough spots but when the dust settled the Allied vice president said that the Northern California Division merger process had been the smoothest and most successful of the many Divisions under his authority. How Leaders Manage Power and Control Makes All the Difference Mergers, acquisitions, restructuring, downsizing, and off-shoring, have a similar effect on all managers and employees. They can introduce a barely tolerable level of uncertainty. But when people know that their voice will be heard, that their experience and concerns will be included in the decision process, they will most likely stay engaged, accept the outcome, and be motivated to make it work. The experience for the acquired managers and employees will be very different if the acquiring company has an open and participative culture, versus if its culture is autocratic. When an autocratic company is acquired by a participatory company the acquired managers are often pleasantly surprised. And visa-versa. To me the Fortune/Allied Northern California merger was yet another example of how the right process leads to the best outcomes. Barry Phegan I hope you find the newsletters interesting and useful. If you have comments or questions, please email me barry@meridiangrp.net If you want new tools to improve your workplace, you will find them in this book. A 187 page toolkit of practical information and examples. For more information on the book, click on the Amazon logo. ..



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