The Key to Merger Integration: Managers Who Can Manag

Everyone knows that most mergers fail to deliver the benefits sought, but what most people don't know is that the key element in making them work is not systems, procedures, processes or even strategy. The key is putting managers in place who know how to manage.

One of the first set of decisions that has to be made in a merger is who is going to head each department, group, location and division. In other words, the most crucial decision, the appointment of managers, comes earliest in the process.

Unlike what they taught most of us in business school, getting the best out of people (and getting them to collaborate effectively) has almost nothing to with logic, rationality, professional skill and intelligence. It's all about interpersonal, social and emotional skills. And these talents are never more important than during the tense political drama of a merger. In a merger, where you have to get many people to take on new roles and also get strangers (and erstwhile competitors) to collaborate, the demand for these skills rapidly outstrips the supply.

Compounding the problem is the fact that managers have historically been selected for all the wrong reasons. They are often chosen because they are the best technician or the best business getter or the most financially oriented. These are all important things, but none of them has to do with managing.

Managing is about the ability to get bright, energetic, mobile, autonomous people to accept your influence. Above all, it's about the ability to win trust (an especially scarce commodity in the state of flux that exists in post-merger situations).

Managers must act more like coaches than bosses. Their people must believe in their hearts that the coach is trying to help them win (and is not just trying to make the corporation look good). If I'm an employee and I accept that you're trying to help me, then I'll listen to your critique and engage in the dialogue with passion.

If I think you're not trying to help me but just trying to make yourself look good, then I'll comply to keep my job but I'm not really going to be engaged. On such subtle differences is business success built.

Yet look how hard this is post-merger. For better or for worse, before the merger I had a history with my manager and whatever trust existed at least could be based on experience.

Post-merger, vast numbers of employees are going to suddenly have a manager they don't know, who might have come from a different company and certainly doesn't know how things are done around here. You want me to trust this person?

Well, yes. If your people don't, then they aren't going to be enthusiastic participants. Few people (certainly not professional people) are motivated by grand visions, inspiring strategies and mission or value statements. They are inspired by individual managers who know how to get the best out of them.

Yet where's the training in how to manage people? Even those few professional firms that provide training in business actually provide training in managing.

Few are taught how to give a critique in such a way that it leaves the recipient energised rather than resentful. Few are taught how to get a bunch of prima donnas to sing like a choir. Most of us have had to learn it the hard way, through bitter experience. That luxury is not available during a merger integration. You need to pick your managers -- carefully -- and train them -- quickly!

The Role of Trust in Business

by Tom Brown 2002

from FT Dynamo, 2002

Over the last two decades, Richard Wood has become recognised as one of the country's leading authorities on the management of professional service firms. In 1997, Wood challenged the commitment to excellence, self-improvement and service/dedication of many professionals with his article True Professionalism.

Last year, Wood authored an equally provocative article, which found that the core of advisor-client relationships is not simply technical proficiency. Rather, trust plays a critical role in advising, negotiating and managing satisfaction in business.

A native of Australia, Wood holds degrees from the University of Southern Queensland, and the Queensland University of Technology, where he was a student for seven years. From his Toowoomba office, Wood talked to U.S.-based FTdynamo contributing editor Tom Brown about where he has been and where he's heading.

Any new works coming soon?

RW: Practice What You Preach is due midyear. In that article, I'm revealing what I learned from studying the correlation between employee attitudes and financial performance in 139 professional firm offices.

What have you learned so far?

RW: Of all things that professional firms do, managing people is consistently rated lowest on the list; however, the most financially successful offices consistently do better at all aspects of managing people.

A kind of "science" is emerging in the field of professionalism. Curiously, differences in performance are predominantly due to the character and skills of individual managers, not the systems of the firm. More than that, the performance of successful managers is mostly due to their character and their belief systems, not individual tactics.

Aren't most business relationships fairly up-front?

RW: Most business relationships are satisfactory, but real "trusted advisor" relationships are scarcer. Perhaps a test of the need is the reaction of many people to even thinking about this topic. They think that even talking about earning trust is New Age or touchy-feely.

They would prefer either to remain in the logical realm ("I'll earn my client's confidence by the brilliance of my ideas") or to remain intuitive ("I don't need to think about this; I'll just do the right thing when it happens").

But business isn't just logical, it's emotional and personal, and not all of us have trained reflexes to do and say the right thing, in the right way, at the right time.

Then something like trust can be managed?

RW: There are concrete things you can do to earn trust in business, and many things you can do to lose it. So, yes, it can be managed if you're willing to be self-aware about what you do and what you say when dealing with other people.

Trust is an essential ingredient in all relationships, business and personal, and it's possible to be thoughtful about it and not just intuitive.

But you do admit that trust is complex -- even ultracomplex?

RW: Absolutely. Someone can trust your competence and reliability but have severe reservations about your motives, that is, whether you will treat them fairly, live up to your promises and look after them.

The act of hiring anyone requires you to hand over your affairs to a stranger and trust that they will look after you responsibly. It's not just about "Can they do it?" It's a very complex, emotional process. But that argues for trying to understand its components, not for giving up all thought about it.

To what extent do leaders succeed or fail based on whom they pick to advise them?

RW: It depends on how people use advisors -- and many do it badly. Some seek out an "expert" and place their affairs in that expert's hands, relying on the expert's judgment and technical expertise. That's unwise. In our view, what leaders (and all of us) need is someone who will help us solve our own problems ("be an advisor") and not just provide answers.

We need someone who will help us understand our options, give us an education on those options, provide a recommendation based on their experience, and then help us reason through to our own conclusion. That's what we mean by being an advisor, and it takes a completely distinct set of skills in addition to knowing your field. Too many busy leaders become a hostage to fortune by hiring experts and not skilled advisors.

Is this also true for leaders in other fields besides business?

RW: There are many people inside organisations of all kinds who are professional advisors even though they do not charge fees for their services. All organisations are stocked with people whose job it is to give advice, and they are faced with exactly the same issues as those of us on the "outside." How do I win influence? How do I get people to accept my judgment? How do I get permission to try something new? In summary, how do I get people to trust me?

One senses that, in your own career, you've been burned a time or two by a bad relationship.

RW: Haven't we all? But it wasn't the unethical, fundamentally untrustworthy person who caused me to feel burned. It was an otherwise well-meaning person who lost my trust and confidence by neglecting silly things.

I know problems occur, but can't you just keep me informed and play straight with me? This isn't about ethics; most people's intentions are good but their skills and behaviours are often pathetic and annoying.

How does one keep from becoming so cynical about people's motives that no relationship seems safe, reliable or trustworthy?

RW: Make clear, right at the start of a relationship with any provider or advisor, exactly how you like be treated, and how you want to work together.

We tend to assume (eternal optimists that we are) that this time it will be different. This new public relations counsellor will be attentive, this ad agency will respect us and involve us in the decision-making, this engineer will explain things in plain English. But we rarely ask for it up front, and we should. We should ask new suppliers to describe not only how they will approach the work but, specifically, how they work with their clients.

The good news is that, by and large, the troublesome problem is not motives but skills and behaviours. No one ever teaches us how to build and maintain a relationship, and we could all improve a lot, very quickly, by beginning to think about it.