If you have worked for a large corporation in the 21st century, chances are good that you have been, or will one day be a part of a merger or acquisition. With the volatile nature of the public stock market, companies are buying each other left and right like they are figurines at an estate sale. These multi-billion dollar transactions can have far-reaching consequences if you are an employee at either the company being purchased or the one doing the purchasing.
I have worked for two different large corporations that had a flare for acquisitions, and have been through the process multiple times. At the time that an acquisition is announced, there is typically a large amount of “synergies” between the two companies that will help offset the purchase cost. Translated, this means that the two companies will have a large number of people who will be doing the same job, and that half of those jobs will be redundant after the merger. To put it bluntly, people will be laid off. Knowing this, there are steps that you should take to position yourself well in the months leading up to closing date, to ensure that you are not one of those who become “synergized.”
Everything You Have Done.. Doesn’t Matter
I know, I know.. You are “the guy” (or gal) who understands the correct way to generate TPS reports for your company. The company sent you to training classes and you even wrote all of the documentation on
this process. But with the announcement of a merger or acquisition, you need to realize that the times they are a-changing. The fact that you are good at your current job is not a guarantee that your position is safe
in the company going forward. After the merger dust settles: teams will be combined, managers will take on new roles, and job functions can shift dramatically. After all, the new (combined) company may elect to not
use TPS reports at all.
Integration is the Buzzword
Chances are good that as the merger date gets closer and closer, old projects will start to get cancelled and resources will start to free up. The reason for this is that it doesn’t make sense for the business to continue to invest in the organizations and infrastructure of the past, when many of these things may not be a part of the future of the combined company.
However, in the midst of all of the cancellations, a whole new spectrum of projects will open up under the umbrella of “integration.” It is wise to try to get involved as much as possible in these integration projects, as they will be paving the way for the future. Ask to get invited to meetings, and try to reach out to employees in the other company to discuss the differences in procedures and processes, to make sure you will have a voice in the future direction. The more you know about the strengths and weaknesses of both methods of operation, the more valuable you will be. Tell your managers that you want to be a part of the integration effort and that you are willing and eager to branch into new roles and responsibilities, in order to get included.
It’s Time to Find It.. The Rainbow Connection
When two large companies come together, one of the first things that is done is a large assessment of the employees on both sides of the merger. The best way to position yourself for these meetings, is to have as many managers as possible know who you are, and be willing to speak up on your behalf. The old adage says that it isn’t what you know, it is who you know, and it is critical to have your name out there as somebody who can make things happen. You cannot simply bank on your own manager (and even his manager) to have your back, because you don’t know if their role will be changing in the new company.
I mentioned earlier that you should connect with folks doing similar jobs in the other company, and this is critical here as well. If you have people on both sides who bring up your name as a key contributor, you should absolutely find yourself on the right list coming out of those assessment meetings.
Reality Check: You Still Need to Prepare For the Worst
While the tips above were meant to give you some suggestions for how best to position yourself, every merger is going to be different. I have been through a merger where the company that I was working for acquired a huge competitor, and we all expected our worlds to change completely. But when all was said and done, there were no layoffs and our job functions remained unchanged for the most part. On the other hand, a different merger that I was involved with carried massive reorganizations, and many good people (and hard workers) lost their jobs.
In spite of your best efforts, this could potentially happen to you. News of a merger or acquisition by your company should at the very least be a wake-up call to get your resume up to speed, and to reach out to friends and former colleagues in the industry. The local market may soon be saturated with folks who are in the same boat as you, and if you start to see warning signs that you may not be a part of your company’s future plans, is would be wise to start looking around to see what else is out there.
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I’ve been in corporate world for 10 years and participate in 2 mergers. The problem is that in neither of the two the management kept us informed or gave the impression that they need us. When 40% of the employees left in 3 months they start to care. The best way to get over a merger is to be the buyer because 90% of those people stay and 75% of the new managers will be from there. Anyway the best thing to do is to always be in the market with your resume up to date in case you see the warning signs the you mentioned.
Getting good information isn’t always easy because management doesn’t want productivity to slip during the transition period. Everything will eventually work itself out, but it certainly pays to be proactive.
Great tips Jeff! I’ve never worked at a company that went through something like this but my mom is going through it.
It’s certainly a scary time for people and it presents a lot of unknowns. The tip about knowing managers is key. The reality of our world is that it’s not about what you know, it’s about who you know.
The unknowns are the biggest frustration about going through this scenario.. A lot of info is “need to know”, and there will always be rumors floating around, which may or may not be based in reality.
The great thing about working for yourself is you never have to worry about mergers. 🙂
Hah.. I am sure that this is right, Jai. I would love to one day work for myself.
Mergers and acquisitions dont’ necessarily have to be a bad thing but many people don’t like change so they take it as a bad thing. I think it depends on what side of the merger you are on! It’s easier for the receiving company than the merging company, I think. But you have some great tips here!
I agree with this statement, Daisy. Work environments often get stale and productivity starts to slip over time.. Introducing dramatic changes (as a merger will certainly do), can really reinvigorate a staff. I personally have no fear of change, and am always happy to ride the waves of change.
The problem is that staff will be cut during the progress, and my goal with the article was to try to show how to best position yourself to fall on the right side of the cut line.
Any type of shift in the work place is a scary thing. I like your advice on being pro-active, while also preparing for the worse. The worst thing you can do is deny that you are vulnerable.
In today’s work climate, keeping yourself plugged into the industry (and maintaining a solid network of contacts) is definitely the way to go.
Sounds like a very stressful experience to go through. I’ve always worked for smaller companies. So I’ve never had to go through something like that. Employees must be so paranoid about losing their jobs though. It’s either that or you just deny the likelihood and tell yourself how valuable an employee you are. Unfortunately even good employees get laid off in times like that. So your tips about being proactive and diversifying would be extremely important to set yourself apart.
Telling yourself how good and valuable won’t do any good unless you convince the powers that be. Uncertain times can be very trying on a workforce, but they can also bring out the best in folks. In a lot of ways, it is really an opportunity to show that you can step up and take on new and larger challenges.
I work for a big company and I haven’t been a part of a merger. Our company acquires smaller companies and I know those new people usually have a hard time. Being pro active is a good way to go. It also doesn’t hurt to start looking for a new job. 🙂
Even the large companies get bought up sometimes, Joe. Just look at what happened to our lovely All-American brewery here in St. Louis…
Every m&a activity is an opportunity for both parties to collaborate better and become more competitive in their industry. It’s really unfortunate about the possibility of being let go though. But at the same time, it’s an opportunity to prove your loyalty and worth. When the company I worked for was bought by a larger firm about 20% of my co-workers got a sign-on bonus. I wasn’t one of those lucky ones but I understand that for the most part those individuals worked very hard and put in a lot of over time so I think they deserved it, and I’m happy for them. I’m just glad I didn’t get laid off or anything. I did plan for the worst like you said though. You never know in today’s economy what might happen lol.
I haven’t heard of a company offering a large bonus to those that survive the inevitable cuts, but it doesn’t surprise me. I am sorry to hear that you were left outside of that. People should remind themselves that they are fortunate to have steady employment in an economy like this one, but you always need to be prepared in case your personal fortunes change.
I was working for LaSalle bank which was a part of ABN AMRO. They sold it off to Bank of America but there wasn’t much of a change because they were acquiring our group not merging us so no one lost their job.
Glad to hear that worked out for you, Sean. Acquired companies are not always so lucky, unfortunately.
I personally have never been through this situation, but I can only imagine that its a scary situation. The downside to a situation like this is that most don’t plan for it. Rather it just happens.
This is true, Eddie. It often does just kind of come out of nowhere, when market conditions allow for it all to come together.
I’ve never been through a merger or acquisition myself, but I can just imagine how scary and stressful it most be if you’re one of the unlucky ones.
Your tips are spot on, Jeff. I love the ideas of repositioning yourself by acquiring new marketable skills, and getting to know management. To add to the adage, “It’s not what you know or who you know, but who knows you.”
The scariest and most stressful part of the whole process is the uncertainty. Rumors can escalate quickly and only feed the paranoia of many employees.
I’ve only worked for a large corporation once so have never been through this, but think this advice is very useful! I especially think it’s good that you mention diversifying your skills and looking for ways to move the company’s future vision forward – this is good advice whether or not your company is merging!
Thanks Shannon… Yeah, that is why I mentioned getting involved with integration projects. It really markets yourself as a part of the company’s future vision.
Jeff-This article was on point. I’ve been involved in a bunch of acquisitions since I work for a huge Fortune 500. We eat up a lot of small companies, which is kinda sad, since I’ve seen many people laid off…with families and who have been with their companies for years. I’ve seen people get angry over switching jobs, losing jobs, climbing up the ladder for no reason, getting demoted for no reason. It really is a stressful time for everyone.
The biggest one was when we purchased a company that filed for bankruptcy. It was the biggest headache ever. Maybe I’ll write about it one day, but I was heavily involved since we were being investigated by the FTC (I work in legal). We won, but it was a long process and 2 years later, it still continues! We should all do our best to look at the big picture, the company’s future, and our job security/roles.
I have also been on the acquiring side more often than the acquired, but I have seen both. Depending on the size of the acquisition, both companies can be effected.
I would think that working in the legal department ends up forcing you to work a lot of long hours durting one of these mergers!
When I first read the title, I thought that I must be on the wrong blog. You raise a lot of great points, and I definitely see the relevanc after reading. I love how you hightlighted the “integration” buzzword.You are right. We should prepare for such changes.
roshawn.. we actually try to cover a lot of different angles on the personal finance world, and of my favorite topics to write about is careers and life in the corporate world. try clicking on the “job advice” link at the top of the page to check out some additional articles along this same vein.
I’ve worked for government for 10 years and long for the “sanity” of the corporate world. I work for people who would never survive a synergy action. That being said, I have traded job stability for sanity.
yeah, the public sector is a whole different ballpark, john.
i do wonder if the job security that comes along with public positions does breed some sort of complacency.
however, alot of public jobs have been cut in recent years do to budget shortfalls, so employees may have the same concerns
Oh boy, this post is SPOT ON! “Synergies” means “bye-bye” to lots of folks.
People have GOT to take matters into their own hands. Our lives and our livelihood are too important NOT to!
Best,
Sam
Well I do agree with the concept you have given here. I think you are right that to survive a merger it is better to be prepared. I think a far more better idea is to have your company so that you don’t have to worry about mergers.
I loved the TSP Reports reference! Takes me back a decade…haha! I work for a big firm and we’ve acquired smaller companies here and there. I do sympathize with those coming over because normally their past performance resets and it can be tough on their motivation. But I try to remember and mention the positive twists and benefits that they receive from the acquisition.
I’ve always avoided working for big companies and corporations. I do agree that the best way to survive a merger or acquisition is to be prepared and to make yourself useful. Even in smaller companies that may slow down or run out of funding, its far better to be the all-around “useful” guy than to be the person with their head down doing “their job”.