Transparency Saves the Day

‘Nothing is Going to Change’ (Hint: Something Will)

Heraclitus, the Ancient Greek philosopher, is credited with the line “the only thing that is constant is change.” In any aspect of our lives, he taught, we should expect things to evolve and change. But somehow, when it comes to Mergers & Acquisitions, the all-too-common refrain from the acquiring team is often “don’t worry – nothing is going to change!” 

It’s meant to be a source of comfort or a sign of good will – and in many cases, executives often think they mean it. But in fact, it’s a damaging line, and one teams should stop using. M&A done right is all about making (the right) changes, and even M&A done wrong will lead to changes, big or small, throughout organizations.

Small changes, big headaches

There are plenty of stories of egregious claims that “nothing will change” after an acquisition, Layoffs that happen despite promises that a combination was about more than just cost reductions. Wholesale org redesigns leaving teams under new management or star performers without an opportunity to prove themselves. The list goes on and on.

But in many cases the damage comes from much less obvious surprises. Recently, an acquisition took shape whose value and structure was contingent on the conversion to a new legal entity. As so often happens, the acquiring leadership reassured everyone from the back office to the front lines that nothing would change – the conversion was simply a formality.

From the back office perspective, it was just a simple entity conversion. But to execute the getting terminated (on paper), losing benefits (on paper), getting re-hired, and getting set up on new payroll, benefits, and internal systems. To front line employees, with limited context, this was not just an annoyance; it was a source of real stress (and by extension, real work for the HR team). And at the end of the day, simply executing this transition was a substantial amount of work. In the end, 5 people were hired onto the transition team for this task alone.

How transparency saves the day in Mergers & Acquisitions

Ultimately, this problem was solved (and Greenwood has helped many more companies avoid similar problems). But to save the headache, more teams would be wise to heed Heraclitus’ advice, and prepare everyone involved in a transaction for change. Maybe big, maybe small, but changes nonetheless.