I was reflecting on merger integration last night (I know, I have to get a life) recalling the “best” merger I have ever worked on (Fleet Boston/Bank of America) and the “worst” (MBNA/Bank of America) and what was the common factor. The best way I can put it is imagine two rowing clubs that have been competing for decades now having to become one, and oh – by the way – adopt all the aspects of the one club. I know most folks focus on the IT integration, but in the over 20 mergers I have been involved in or led the root cause for success or failure lies in two areas. Understanding the two cultures as they were and making conscious choices about what the new culture becomes and keeping all parties fully engaged. I was struggling to explain the “loss” that occurs until I ran across a gem… a study of ANZ mergers (aka Murder in Mergers).
Here’s a teaser:
A corporate merger, on the scale of a global order, is a ‘catastrophic change’ and depends on ‘killing off’ parts of the former organizations for its success. The act of annihilating parts of the former organizations is experienced as disengaged and murderous by organizational members. This arouses persecutory anxiety of an unbearable intensity amongst members from which they defend themselves by emotionally disconnecting from the psychic reality of the new organization. Several contentions underpin the hypothesis:
- That a merger involves a developmental process in the creation and growth of a new organization;
- The event of a merger causes disruptions to roles and relationships that are experienced as a loss of power, status and identity, and also as an emotional loss for what had been cherished and valued in the former organization/s;
- The emotional loss evokes the symbolic experience of the loss of a ‘loved object’, and an instinctual loss becomes attached thereby to the real losses; and thus,
- The process of merger involves a symbolic destruction of the ‘loved organizational object’ of the former organizations, as held in the minds of organizational members.
The real lesson: the synergy depends on winning the hearts and minds of the employees you need to get on your bus, and helping the others to quickly get to a different place. All too often PMO teams forget the above without focusing enough – especially folks that are customer facing (I am living this with the US Air/American merger – airlines I fly 90% of the time).