After almost 10 months of the pandemic — that seems like 10 years of endless sleepless nights — executives of companies overwhelmed by the insurmountable financial effects of COVID-19 have been, or soon will be, forced to merge with rivals just to attempt to survive. But living together happily ever after with former fierce competitors may prove elusive.
Truth is, a merger of equals is more of a throwaway public relations fantasy than reality. There is a winning side in just about every deal and, to varying degrees, a loser. What becomes an almost Herculean effort in trying to combine management teams, particularly at the very top, can quickly dissolve into a disappointing pipe dream.
Although pockets on both sides are frequently lined to foster cooperation, egos may be bruised, depending on which of the two previous combatants’ teams loses ground in the reformulated power hierarchy.
Business has never been a democracy where the majority rules. In optimal mergers, the best and brightest team should take over. In due course, the two companies eventually learn to become one, albeit with a few feathers ruffled along the way. They begin to operate in lockstep towards clearly defined goals, the ultimate of which is always better serving the customer. However, teams periodically may try to avenge their previous archenemy behind the scenes for past transgressions, real or perceived.
The best business combinations that produce the promised and much-coveted synergies are those where both sides agree, before the ink dries on the agreement, “Who does what and by when.” Sometimes there is a formal written understanding that provides for a transition among previous principals and top executives, with one group staying and the other going, as the survivors mutter under their breath, “Don’t let the door hit you on the backside on the way out.”
In other transactions, it’s agreed beforehand that there will be a jump ball after a specified settling-in period when the board of directors or other agreed-upon advisers will give the nod to one team or the other. It could mean blending a combination of the most talented and effective leaders from both sides in the best situation. Using the adviser selection method is certainly not as clean as a predetermined succession plan. Still, it can work if there is mutual civility focused on the prize of making the coupled enterprise stronger together than each going solo. Both sides temporarily play nice together because there is frequently something extra in it for those who are forced to fade into the sunset, as in golden, silver, or at least quasi-bronze parachutes.
Without specific rules of engagement, what results is that no one is quite sure which team will ultimately take charge. The outcome is usually something like civil war with lots of pain, suffering, casualties and deserters.
The adage of keeping your friends close and your enemies closer makes sense, but no one ever said to keep your former, or current, detractors close forever. Deeply seated negative feelings are usually extremely challenging to soothe.
Visit Michael Feuer’s website www.TipsFromTheTop.info to learn more about his columns, watch videos and purchase his books, “The Benevolent Dictator” and “Tips From The Top.”