Why mergers need to consider the human element

As a result of increased federal regulation and other market factors, many industries are currently undergoing a period of increased activity in mergers and acquisitions. The Wall Street Journal has tracked more than $2.5 trillion worth of M&A deals in the first three quarters of 2014, an increase of roughly 39 percent from 2013 levels. 

However, the Harvard Business Review found an interesting common trait among many of the most high-profile mergers to take place. What was noted was that the success of these new partnerships is not always a matter or money or strategy, but rather of "relationships, culture, politics, power, and emotions."

Perhaps the clearest example of this is the attempted merger between advertising mega-corporations Publicis and Omnicon. Strategically, the merger would have been a win-win: Both organizations were struggling to compete after the entrance of well-funded digital giants into their space disrupted set processes. However, the two CEOs, Maurice Levy and John Wren, who originally called the proposed deal a "merger of equals" and agreed to be co-CEOs, soon find themselves embroiled in cultural disagreements. 

The pair failed to compromise on appointments to a management team to spearhead the transition, as well as how tasks would be split in the resulting organization. In fact, they failed to even come to an agreement on which firm would be listed as the acquirer for accounting purposes.

It is sadly often overlooked that the culture and vision of an organization is as important to consider, if not more so, as the many financial elements of a merger. If teams from the two organizations in question cannot find a way to align themselves and collaborate, the resulting entity may be no more productive or profitable than the separate parts. To avoid this outcome, it is recommended that those currently considering a merger seek change management consulting. Having outside perspective on the best way to approach the merger from the onset can help avoid many of the potential roadblocks to success.