Over the course of my career I’ve had the good fortune to have been involved in several mergers. At first, I was fascinated by the process of identifying a compelling rationale for combining companies, negotiating the deal, planning the integration of people and systems and then executing the plan. The dizzying array of tasks that must be accomplished to complete a merger is challenging to say the least. In time, however, I learned that even greater challenges arose after the investment bankers and lawyers had packed up their briefcases and moved on to the next deal.

Building trust, cooperation and esprit de corps among the members of the newly combined organization is far and away the most underestimated challenge of mergers. The failure to plan and address cultural differences is why most mergers fail to meet the expectations of the parties going in. Unless leaders learn how to avoid the inevitable post-merger traps their efforts will be too late to repair the damage that has already been done.

Post-merger traps emerge when behaviors thwart the meeting of universal human needs for people to thrive, individually and collectively. These needs are respect, recognition, belonging, autonomy, personal growth and meaning. When these needs are not met in legitimate ways, people have a tendency to seek illegitimate ways to meet them. As individuals focus more on self-interest, they lose sight of the organization’s interest. In time, the downward performance spiral accelerates as individual performance declines, communication is stunted, decisions are made based on incorrect assumptions, financial performance suffers, and so on until survival is threatened.

The good news is that post-merger traps are largely predictable. Recently I wrote about the Urgency Trap.  Today, I would like to briefly describe another trap facing organizations following a merger or acquisition.

The Unfairness Trap.  Where there are overlapping or redundant positions in two organizations, one person’s position is usually eliminated. Leaders need to take the time to assess the talents and experience of the employees they have not previously worked with and they need to be as objective as possible in making people decisions. Communicating the process you are going through to make people retention decisions helps employees see that you made an effort to be fair. Being fair meets the human need for respect. If the process is perceived to be unfair and people are selected for positions based on anything other than merit, trust will be broken with the remaining employees. As a result, employee engagement will suffer and a few employees may actively sabotage leaders’ efforts as a form of retaliation.

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