The popularity of mergers and acquisitions as a strategy to support and enhance growth cannot be ignored, yet more than half of total mergers are unsuccessful and fail to meet those objectives, something that attests to the volatile and complicated nature of this type of approaches. Mergers and acquisitions are much more than simply buying out another company or absorbing it into our own. These carefully planned transactions are meant to complement the strengths of an organization, address their weaknesses and further prepare it to be successful in the business world.

Those reasons are why not just culture is important, but also the vital roles that leadership plays in these transitions and how great leaders can be key to overcoming issues that may arise and helping find an almost perfect alignment with that culture we mentioned earlier.

Here in Suzzanne Uhland’s blog, we want to take a look at how leadership can be crucial to the success or failure of mergers and acquisitions and how this important factor can sometimes be overlooked but not without dealing with some serious consequences.

Leadership can be essential right from the beginning as decisions are being made, and great leaders will not be shy to questions about topics like the clarity of the reasons why the merger or acquisition are even being considered and what the benefits of the decision will be. Those benefits will be weight in by a leader not only by seeing how they benefit high-ranking employees but everyone in the organization in a direct or indirect way. It is also worth questioning if the merger or acquisition is the best way to go about further advancing the business, as perhaps an alliance with other partners can be not just more cost-efficient but also more advantageous for the company as it would be less invasive and drastic. Last but not least, a great leader would also take into account right from the beginning, how the geography, capabilities, and reach of the company can best be enhanced by the new acquisition, by the merger or by being the party that gets absorbed by the other partner. What we mean by this last point is having the insight to be able to start identifying resources right from the beginning and start setting strategies in place to best utilize those new tools that are being added to the shed.

If the leadership of a company is not actively involved in the process and have not properly engaged the transaction before, during and after it takes place, the chances of failure will grow exponentially. Leaders are particularly adept and ultimately responsible for motivating and influencing employees, helping build better relationships, assist in the developing of team members and serve as excellent examples of adaptability. What this means is that their influence in employee confidence when it comes to the transition is crucial to the success of the merger or acquisition.

The trust employees have on the situation is highly dependent on the way leadership is managing everything that is going on, not only by showing confidence in the decision but also by maintaining communication channels open and avoiding the creation of an environment that harnesses doubt and uncertainty about job security and continuity with the organization. Employees should know as soon as possible about their personal fate and possible future with the company and not left to wonder, as this can be truly devastating to the actual process.

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It is known that management is solely responsible for most of the failures associated with mergers and acquisitions and they usually boil down to their poor handling of information about the process itself.

It is the responsibility of great leaders to be clear and assertive about the priorities of the transaction and to set the right atmosphere of discipline and the chance to take maximum advantage of the situation for all parties involved; to give employees reasons to commit, engage and trust the merger or acquisition as the right move for the benefit of the company and all of those involved; and ultimately to inspire others into finding their own sense of purpose, community and to focus on the task at hand so they can also be architects of the change that has come to pass and that they should embrace to better seize the opportunities that will arise.

Change and disruption are something that will inevitably come with mergers and acquisitions, but that does not mean that one should look upon these situations with apprehension as transformational change can also reveal exciting new opportunities. Leaders are key on this part of the process and it is not simply what is expected of them, but also their ultimate responsibility to ensure these things happen with the goals of the company and the welfare of all employees in mind and those things should always be prioritized over everything else.

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