🤝 Is the saying 'the more the merrier' true for mergers?
There is no guidebook on the ideal amount of mergers a company should have, but there is one for how employees should handle them.
Whether a company should undergo a merger or M&A (Merger & Acquisition), depends on a lot of varying factors. Regardless, a decision to go ahead with this determining move would definitely cause waves of changes internally within the company, and externally for its industry.
Some will do it for survival, some might do it to execute their ambitious plans. Either way, one stakeholder that will be greatly impacted is the employees of both acquirer and acquiree. Will they take it as an opportunity or a threat? Well, it depends on the mindset of each impacted employee.
Two main types of internal changes
During the process of an M&A, employees will have their ways of work affected one way or another. The two inevitable adjustments would be in terms of:
Culture and ways of working, aka aligning on what the company stands for and how work gets done. Scope of changes include:
Management practices
Values
Leadership model
Working norms
Operating model, aka adapting to new ways of organizing a company and running a business (as a result of amalgamation between two entities), such as:
Organizational structure
Roles and responsibilities
Decision rights
Processes
In addition, to manage the combining of 2 cultures systematically, culture change will go through 4 stages: (1) Setting of direction, (2) Energizing organization, (3) Hardwiring the changes, and (4) Driving execution.
Learn more about internal changes during a merger in the McKinsey article here.
Two edges of a blade
Like every big make-or-break decision, an M&A has both its plus points and consequences. Interestingly, some of its pros and cons mirror one another.
(+) More Job Opportunities
In the condition that the acquirer is in a related, but different industry, the merger can bring multiple advantages to employees of the acquired company. Merging of departments will also birth new leader roles.
(+) Improved Organizational Structure
An M&A commonly brings new ideas and can breathe new life into a stagnant organization. The new company structure might also offer the chance to receive training and further individual career goals.
(-) Job Security Concerns
The acquirer, when it is in the same industry, might already have more than enough people that do the same job as the existing employees of the acquired company. In this case, make sure to highlight your USP (Unique Selling Proposition).
(-) Lower Employee Morale
With the instability of the situation, employees often lose the desire to give their best. Employees will be prone to feeling disengaged and disenchanted during the process — this is why “Energizing organization” is an important phase in culture change.
Read more about the ups and downs of an M&A for employees here.
Two mergers later, here I am
Before solidifying its position in Indonesia’s SaaS landscape, Mekari started from a quite unique background story.
Dubbed as the Avengers of SaaS, we’ve undergone quite a few M&As, in which our now Head of Segment Proposition Strategy, Jodi Wardhana, has been a part of all of them.
In an episode of “Career Journey” with Mekarians, Jodi shared his first-hand experience of M&As, including:
Cultural differences and similarities
Leadership in uncertainty
Unexpected job opportunities
Signs of a successful merger
Watch the full 30-minute chat on our Instagram Reels here.
Have you been a part of a company that undergoes an M&A? How was your experience like?
Even if you’ve never had exposure to an M&A before, this week’s Monday Mavens edition could be helpful for future references.
Leave a like and share this edition with your colleagues who might appreciate it.
We’ll see you next Monday!