Something within each of us cries out for belonging…Like the tree that puts roots deep into the clay, each of us needs the anchor of belonging in order to bend with the storms and reach towards the light. – John O’Donohue
Image by Andrew Seaman
How can leaders manage this difficult and painful process with honesty and integrity and retain the respect and trust of the employees during this uncertain time?
This article aims to lay out the reality of M&As for Leaders and some thoughts and ideas on how to manage it with integrity. The purpose of a successful process is to minimise the unnecessary pain and create a good ending. This involves managing the space so everyone affected is able to honour what they contributed to the old organisation and be able to thrive after the process is complete, whether they join the new organisation or not.
Why does an M&A feel so big for employees?
The impact of a change of ownership can often be played down by leaders, particularly if they tend to focus on the positive potential and opportunities that come with it (access to a bigger market, potential new investment, benefits of scale, long term security etc).
The reality of an M&A though for employees can leave them with feelings of abandonment and betrayal by those in whom they place their trust, the leadership.
There’s a relationship between the employees, the organisation, its leaders and each other and this creates feelings of belonging. Any change of ownership (and / or authority) is seen as a potential threat to this relationship. It’s their everyday contact and connections that keeps them feeling safely attached and secure, so any disruption to their feelings of belonging can trigger fear, confusion and uncertainty. Employees can feel a heightened state of anxiety if this changes and so they’ll look to their leaders and management for clarity and direction.
What happens when employees see their own organisation as ‘family’?
If an Organisation is family owned or /and still has the original Founder, employees may unconsciously be attracted to join in order to find a place for themselves as part of the family, as one of its members.
They will pledge their (often, blind) loyalty to the family, in exchange for a job, salary and a place to belong. They may even lose sight that they are, in reality, an employee and it’s these employees who are often most deeply emotionally impacted by the M&A process.
Instead of potentially facing the realty of losing their job (which is replaceable), they experience the devastating consequences of losing their family (which is irreplaceable).
These ‘ties that bind’ can quickly start to come undone in a sale and M&A situation and will need more careful handling by the leadership.
How and why are some employees more attached to the organisation and how can this be a problem in an M&A?
There are a number of reasons why employees feel so deeply attached and loyal to an organisation and it can be different for each person.
Some research identifies that employees tend to be more attached to their managers, (rather than the organisation) and will choose to disengage or leave when their own manager moves on. However, humans attach for other reasons too. These could include, for example:
- Feelings of safety and security (it may be a warm and friendly culture)
- Friendships with colleagues and other family members who work there (mum, dad etc)
- A connection to the Organisations / Founders purpose and values
- The role they hold and the status that brings etc.
In my experience, the acquiring organisation can often fail to look at this before they purchase it. Instead they prefer to focus on whether its a financial fit or not. The danger is that the new owners may unconsciously destroy the heritage and potentially lose the inherent wisdom and goodwill that’s embodied in both its people and its culture.
If the culture of the new organisation is too different than the one they belonged to, it will have a big impact on whether the employees will find it easy to join.
If the cultural gap is too wide, it can lead to a painful, (and potentially very expensive) process.
How can leaders successfully manage and support employees through the process?
- Stay in Reality
Leaders will need to face the (above) realities both for themselves and the organisation’s employees. Too many employees are given false hope and unrealistic expectations, as leaders wrestle with the emotional overwhelm of such a big transition. Its not uncommon for the leaders to either quickly ‘jump ship’, so they don’t have to see the consequences of the decision or struggle to contain their own guilt and involvement in the process.
Inevitably some employees will feel betrayed and abandoned by the leadership.
Some employees may be able to quickly come to terms with what’s happened, whilst others will feel confused and struggle to forgive the leader(s) for what they’ve done.
After the initial announcement, there will undoubtedly be a process of reflection and a wondering as to who knew and who didn’t, which creates a split between the leaders and the employees – an us and them.
So for Leaders and Managers it’s going to be important to be honest about what’s happened and why. This is not the time to collude with a victim / perpetrator narrative, as this will only disempower employees. What they will need now is help to navigate this ‘liminal space’ and find their own agency through the transitionary process.
Being focused on the reality (e.g. what the new culture really looks like), creates a healthy perspective, (as opposed to a positive one) and will support employees to face up to their own personal situation and explore their options moving forward.
2. Acknowledge the Fear
Fear and anxiety is a healthy response to any change (even if its a positive one). Fear is our systems way of raising our awareness to what’s emerging and it helps us to stay alert to potential dangers and threats coming our way. What is unhealthy is denying it or bypassing it with false positivity or hope. This is a form of hijacking, that attempts to take control of the situation (and the person) because the Leader doesn’t feel comfortable.
3. Differentiate and define the boundaries between secrecy and privacy
During this time its important to make the distinction between secrecy and privacy.
Let employees know that taking the opportunity to look elsewhere for work isn’t a sign of disloyalty. They also shouldn’t feel pressurised to share their private intentions with the Leaders or anyone else, this is their own personal business and shouldn’t affect their future potential prospects with the organisation. In actual fact its the wise thing to do.
Once the new path becomes clear, employees who’ve gone through this process and then choose to stay, will feel more committed to the new organisation, its new owners, its culture and new direction. It will help them honour and let go of the past and turn and face the future with fresh energy and resources.
4. Holding space for the sadness, loss and grief in the ending
For the organisation this is an end of an era, so its important to take time to become present with employees and listen and acknowledge their sadness and grief.
In endings there’s always heightened emotions, such as anger and sadness, however some employees may also seem disassociated from their feelings, feel numb or even depressed. Endings can trigger old feelings from previous experiences too, so you need to be ready for this overwhelm and for people to revisit old stories and memories from their past.
As a Leader it’s good to hold a space for these feelings, some suggestions include:
- Creating a place for people to share their stories with each other, this could be a post-it wall at head office etc
- Have a webpage or a book that each employee can contribute a memory of their time with the organisation, such as old photos, stories etc.
- Organise for each employee to have a copy of their own, to mark the ending and create meaning of their time together.
In meetings, start by doing a ‘check in process’ so that people can express how they feel (voluntarily, not forced).
Take the lead on this and boundary it with time, say two minutes each.
On a scale of 1-10 how present do people feel in this moment (10 being fully here etc)
On a scale of 1-10 how much energy do people feel right now?
Give them the option of saying more or not, leave it up to them
Make this an ongoing practice as it will help people to feel connected and not isolated.
5. Research the history of the new owners and share it with the employees.
- Who was the original founder,
- What’s their family’s personal history and
- What’s their purpose?
- What led them to found the business?
- Where do they come from
- What specific place?
- What’s their life story?
Share this with your employees so they can get to know and understand the foundations of the culture of the organisation and the stories of their leaders.
Why is it so important that when people leave, they have a good ending?
Inevitably people will leave.
The leaving and joining any organisation is an incredibly important process, as it affects our future capacity to thrive.
A difficult, painful ending or joining stays with us and affects our ability to go on and create positive relationships in the future.
What we need for a good ending is:
- An acknowledgement of what we’ve taken from the role / team / organisation. This could be support, personal growth, training and development, belonging, friendship etc
- An acknowledgement of what you’ve given, your contribution to the role / team / organisation such as loyalty, time, dedication, expertise etc
- An opportunity to express the sadness and the loss of what’s being left behind
- A ceremony / celebration to mark the ending of the role and the time / era
- Something symbolic to take with you into the future to remind you of time you’ve been with the organisation
If employees have a bad ending, such as leaving with ill will, feeling let down, betrayed or feeling disrespected in some way, then not only will they take these feelings with them (which will affect their capacity to join a new organisation), but they will also leave this ill feeling in the role they vacate, the team they’ve left and the organisation as a whole.
Those left behind may then stay secretly loyal to the person that’s left or / and new people coming into the role / space will also pick up the negative energy thats been left behind. Some new people may even struggle to step into the role fully.
If this happens with a significant number of employees, a split is unconsciously created in the culture which then causes a painful legacy that will continue, long after the sale is complete. It also becomes part of the organisation’s story, like a wound that remains unhealed.