Company mergers can resemble a new marriage


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Mergers and acquisitions may be a fixture of modern business dealings, but when a company gets bought out, its employees rarely know what to expect from the new leadership.

In addition to the challenge of adapting to new practices comes a great deal of uncertainty, since layoffs and downsizing often accompany major corporate buyouts. And, worse, most studies place the failure rate of mergers and acquisitions somewhere between 70 and 90 percent.

Some of the businesses on this year's Top Workplaces list have dealt firsthand with the human resources issues that accompany an acquisition -- and their savvy approaches left employees content enough to rate their companies highly on the survey.

Monroeville-based auto dealership #1 Cochran has acquired two other dealerships in the past year, for a total of four acquisitions in the past decade. Aaron Herbick, the company's director of human resources, said part of the key to a successful merger is providing the employees of the acquired company with a face for the new leadership.

"There are three executives standing in front of the group, and they realize we're just normal people," Mr. Herbick said. "We have a sense of humor, we talk you through the process, we give you as much information as possible. It humanizes us."

David Zatz, an organizational development expert at the New Jersey consulting firm Toolpack Consulting, emphasized that transparency should be the single most important objective for a company taking over another firm. When employees lack information, the rumor mill takes over. Workers become unduly anxious that they will lose their jobs -- and productivity and morale quickly take a hit.

Of course, Mr. Zatz noted that companies often face too many unknowns to answer employees' questions during an acquisition, but he recommended executives be forthcoming about those they can answer, all the while explaining why they are unsure of the others.

"It's like starting a new marriage -- trust is important," said John Stunda, senior vice president for human resources at Ellwood City-based ESB Bank, which has acquired five other banks in its 19-year history.

Michael Brunner, who runs the Downtown ad agency Brunner Inc., said employees are inclined to respect and trust business executives who speak openly about the realities and challenges of a merger or acquisition.

Mr. Brunner said other strategies that companies could employ when letting the dust settle over an acquisition or merger include leading both staffs to work as one for a quick business win. Even if the victory is relatively inconsequential to the company's overall business dealings, he said, touting the benefits of teamwork and of the combined company boosts employee morale.

"A quick win says 'success' to me, and people like success -- they want to be successful and they want to be in successful organizations," Mr. Brunner said.

Mark Berns, a Connecticut consultant who helps businesses deal with change, said one of the worst things a company can do during a merger is maintain the us-versus-them split that inevitably arises between the acquiring company and the acquired one.

In an effort to foster teamwork, company executives could deliberately make their employees collaborate with colleagues from the acquired company.

Ultimately, Mr. Brunner said, the success of an acquisition depends in large part on whether the two companies fit together culturally. He said his company has not gone forward with some potential acquisitions because of cultural differences.

"It's like a new job -- everything is new to you, everything that was known is now unknown," he said. "It's either going to feel good or it's not."

topworkplaces2013

First Published September 12, 2013 4:00 AM


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