The “Soft” Side of Effective Mergers

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Mergers are an integral part of business life. They represent an important tool for corporate success by, among other things, helping companies diversify, add complementary offerings, and remain competitive through effective scaling. But having advised senior executives in transition for 20 years, I also regularly hear stories about how difficult it is to successfully merge organizations and how often mergers either fail or create less than optimal results because of missteps in the executions of how companies are integrated. Many if not most “mergers” are really acquisitions; part of the difficulty of integration is in the sensitivity of “adopting” a new group of employees, who had chosen to work in one environment and now are faced with working in another.

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Obviously, there are a lot of “hard” skills involved to bring about organizational integration, including financial systems, communications technology, and operations, all facilitated through intense project management. However, repeatedly I hear stories from executives of different functions involved in mergers, including Human Resources leaders, that it is the softer aspects that typically undercut an effective merger. The issues coalesce around several major themes.

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