Over the past 15 years, I’ve had the opportunity to work for various companies where I’ve come across some exceptional leaders. Regardless of the industry, whether for-profit or nonprofit, public or private, two types of leaders always stand out. The first type are those who lead by sharing a compelling vision, always having the right answers and tackling tough challenges head-on. Then there are the leaders who focus on connecting with others, consistently gathering insights from multiple perspectives and spend time building relationships. Both are great leaders, but the glaring difference is that the latter are the leaders who gain genuine followership, fierce loyalty and a deep-seated trust among employees and peers. What makes the difference? It’s the ability to listen well. When thinking about mergers and acquisitions (M&As) and supporting people through change, this unique ability to listen well is a significant contributor to success or failure. Those who listen well create an environment that engages employees through challenging organizational transitions. Those who don’t encounter passive resistance to change.
The global pandemic challenged every company to re-evaluate the way they do business. Organizational leaders carefully reviewed their portfolios to reassess their strategies for growth. This led to strategic mergers and acquisitions that hit historic levels as companies sought to acquire capabilities and increase market share, profitability and competitive advantage. In the third and fourth quarters of 2020, the pace of M&A announcements hit a record of 1,250 global transactions, totaling more than one trillion dollars. Additionally, the PwC 4th Annual Global CEO Survey (2021) found that 76% of CEOs expect global economic growth to improve in the next 12 months.
With the pace of M&As exceeding expectations, it’s essential to recognize that most of them, up to 75%-83%, fail. In a study completed by KPMG, 80% of these failures were due to poor execution of change management strategies. A survey of Fortune 500 Chief Financial Officers found that 45% of leaders attributed the failures to “unexpected post-deal people problems.”
Research around change management in M&As has indicated that the driver of successful mergers centers around having a solid communication strategy. While I agree that communication is key, I want to emphasize that it is not simply the talking, sharing, presenting or painting the path forward aspects of communication that determine success. It is the listening well aspect. Theodore Roosevelt once said, “people don’t care how much you know until they know how much you care.” When it comes to M&As, the truth of this quote is magnified exponentially.
Why Mergers Fail
Whenever a significant change occurs, most organizations invite senior leaders to offer ‘shared vision’ tours. Their strategy is to overcommunicate why the change is happening, how it will benefit the organization and what to expect. It is assumed that the rest of the organization will hop on the bandwagon and embrace the change because there was a solid communication strategy before, during and after the change. They’re surprised when change is received poorly — when people simply refuse to adopt new ways of doing things or when top talent simply leaves the organization in droves. But looking back, did the company listen well to their employees?
The power of listening well — gathering multiple, and even competing perspectives — helps employees recognize that leaders do care, they want to understand and they truly appreciate everyone’s voice. Even if employees disagree with the decision to merge, their input is sought out, their concerns are heard and they now have a better understanding of everything involved in making the decision.
Establishing Your Listening Well Strategy
Here are some powerful listening well activities and questions to think through as you prepare your employees for a merger and acquisition.
Listening Well Before the Merger:
- Which departments or groups of employees might have the most difficult time adjusting to the change? What questions can I ask to understand their concerns?
- Which groups across the organization might be most excited about the change? How might their enthusiasm be leveraged?
- What are the most important communication channels to utilize when demonstrating that the ‘new organization’ truly wants to listen well?
- How might you circle back to those who have shared their input?
Listening Well During the Merger:
- Which groups seem to have adapted to the M&A initiatives well? Which groups are lagging? What factors contribute to these results?
- Which employees have most used communication channels during this M&A to share their perspectives? Which do they seem most comfortable with? How might more of those opportunities be created?
- What are the most common challenges and concerns voiced during the transition? How might those concerns be addressed transparently?
- How frequently have different perspectives been sought out? How has the organization made adaptations based on the feedback during the transitional period?
Listening Well Post Merger:
Continue to provide ‘listening well’ channels to employees to keep a pulse on how the merger has impacted employees. Ideas include:
- Scheduling virtual and in-person forums dedicated to discussing how the merger is going.
- Providing a company-wide anonymous feedback inbox regarding the transition.
- Encouraging managers to include questions about how the transition has impacted employees during check-ins.
- Creating a company blog dedicated to answering ongoing questions and sharing important information about the transition.
Organizations that listen well succeed. While a strong communication plan is an essential part of change management, the secret to success is to truly engage employees by listening well. Actions must demonstrate a sincere desire to understand employees’ thoughts, ideas and concerns. Listening well also requires follow-up to what was heard and creating space for a two-way conversation. If leaders practice some of the strategies listed above to listen well but fail to follow up, it risks becoming the ‘illusion of inclusion.’
Whether your organization is going through a merger, acquisition or implementing a new strategy, recognize that a foundational key to successful change management is listening well.