By Gabriela Vlasich*

M&A processes are characterized for a series of basic tensions and uncertainties. These may vary according to the each particular process, which is why it is necessary to properly understand each integration, in order to take effective decisions.

M&A generate changes in companies, creating uncertain and ambiguous contexts that may affect employees. Changes, of any kind, cause high levels of stress, as they implicate a need for adaptation. When such changes are of large proportions or unusual character, they may be particularly stressful.

Therefore, it is important to take into account a series of aspects in order to ease the development of M&A processes, especially in matters related to the people that are part of both companies. The three fundamental aspects are: culture, leadership and communication.

Every company has its own culture. This means that each company differs from another because it has a particular way of doing things and embraces a certain set of values. It is important to consider this as when one company buys another it must contemplate and study such company’s culture in order to understand it and align both companies’ cultures.

Leadership is a key element for a M&A process to develop successfully. Among the most important tasks that a leader must perform are: understanding the current business reality; identify the main goal; having a vision of future; and establishing values a rules in the new company.

Nevertheless, the main task of the high management during these kind of processes is to create a stable environment that promotes innovation and change, while guaranteeing the continuity of operations.

Last but not least, communication plays a fundamental role in any M&A process. It is important to sooth uncertainty and insecurity, by providing information that tends to cover expectations and calms anxiety among employees.

Leaders usually organize meeting where information is given to executives so that they pass that information to employees. The idea is to relax expectations and achieve a greater compromise from the employees. However, it is important to point out that integration among employees is complex, especially when a company has a large staff.

Other aspects that must not be disregarded are those related to motivation and policies that rule companies. Among the latter, it is important to quickly align the compensation schemes of both companies.

By carefully considering and studying the three aspects mentioned –communication, culture and leadership-, it is easier to develop M&A processes with a lower level of conflict. As these three aspects facilitate talent retention and reduction of avoidable costs, it can be said that the benefit can be observed not only through a Human Resources perspective but from a global business perspective as well.

*Anthropologist

Project Analyst

Trafwe LATAM HR Advisors