Thus far it appears that the Disney acquisition of Pixar has worked well.  Brooks Barnes wrote an excellent article about it in today’s The New York Times entitled, “Disney and Pixar – The Power of the Prenup. “There is an insightful quote in the article made by Disney’s CEO Bob Iger. He says “There is an assumption in the corporate world that you need to integrate swiftly…my philosophy is exactly the opposite. You need to be respectful and patient.” Iger’s view reflects his recognition of one of the Post-Merger Traps that companies frequently fall into. We call it the “Urgency Trap.”

The Urgency Trap. When a merger first occurs, managers want to immediately hit the ground running. Task lists are generated and off to the races everyone goes. Part of this comes from anxiety. When we are anxious, cortisol, the fight or flight hormone, surges in our brains. Managers are nervous and want to quickly feel that they have proven themselves worthy of a seat on the ship. Far too often the urgent crowds out the important. If time isn’t invested in building relationships among the new team, trust, cooperation and esprit des corps never develop. Absent the bonds of relationship, the inevitable challenges faced by every organization will rupture weak relational links. When this happens, people become disengaged and stop putting in their best efforts. The leader who gets snared in the Urgency Trap will see the employees he is responsible for leading put less effort into their work or work against the organization’s objectives as a form of retaliation from feeling devalued.

A better approach is to make certain the leaders involved in a merger are aware of this feeling and that they understand it is necessary to think before acting in haste. The best antidote for post-merger stress is to engage in conversations with a trusted colleague or two about the decisions you must make. It actually reduces cortisol when you connect with other human beings and it will help you act with greater prudence.

In the first year following the merger, leaders need to take the time to help the organization’s members build relationships. This helps meet the human need for belonging. In the movie “Remember the Titans,” based on a true story, the head football coach played by actor Denzel Washington had to merge his African-American team with a cross-town Caucasian team. At the newly combined team’s pre-season camp, the coach paired up as roommates African-American players with their new Caucasian teammates. He also assigned them the task of learning each other’s personal stories so that they could relate them to the rest of the team at mealtimes. As the players got to know each other as human beings rather than just human doings, trust and cooperation begin to take root.Like the coach in Remember the Titans, corporate leaders need to find ways to bring the members of the two former teams together so that they get to know each other as human beings and begin to function as a new team. Dinners together, corporate retreats, Friday afternoon keggers, pizza parties, recreation outings (such as golf) all help build the relationships so that the foundation of trust and cooperation will develop that is necessary for every team to play at the top of its game.

In coming posts, I will describe several other traps that sabotage mergers and acquisitions. What mergers or acquisitions have you observed that worked or didn’t and what do you attribute the success or failures to? 

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