Entrepreneur’s Guide to Successful Business Mergers
Mergers are becoming increasingly commonplace in the modern business world. For the consolidation to take place as smoothly as possible, it is imperative for management to focus not only on the financial aspects of business mergers, but also on how this major change affects the employees of both companies. Here are some things to keep in mind when dealing with the human aspect of mergers.
Eliminate Nonessential Personnel
Although ideally you would prefer to make all of your employees strategic partners in the newly forming business, redundancies are inevitable in the combining of personnel from both companies. It makes fiscal good sense to let employees go that you don’t really need. Be sure to look at the situation dispassionately, and retain personnel with the skills and talents most needed to help the business succeed, rather than those you are habitually used to working with. Be straightforwardly honest rather than evasive with those you have to let go.
Promote Employee Communication
At the earliest possible opportunity, get the employees from both companies together to explain the advantages of the business merger. Have personnel from complementary departments share their expertise with one another, so that they can each learn from the others’ strengths. Business mergers are more likely to thrive if they have the positive support of the personnel from both of the consolidating companies.
Give the Changeover Time
A modicum of stress and dysfunction is inevitable during business mergers due to the loss of former co-workers, changes in procedures and policies, and adaptation of a new company culture. Expect the workflow to be somewhat disrupted and for some employees to be temporarily less productive. You may even lose some people who are unable to fit in to the new organization. Priority must be put on integrating information technology departments as soon as possible, as these are essential for internal communication between employees and external communication with the public.
For more advice on business mergers, get in touch with Smart Capital Lending Group.