It blows my mind that no one thought it would be difficult for large financial institutions to quickly merge with other large financial institutions.
There’s been hardly any government oversight of the merger mania going on in banking. And the head honchos at these financial firms have pretty much thrown due diligence out the window in their scramble to gobble up as many ailing banks as possible.
Merger sense is in the toilet. What once took months, even years to figure out, now happens hastily, sometimes over a weekend. And few questions are asked about whether a merger is really a good idea.
Well, in most cases, mergers are not good ideas, and the people that get hurt are not just shareholders but employees as well.
The statistics on success rates for mergers are dismal.
Sales growth post merger actually declines for both entities, according to a Federal Trade Commission report, “The Effects of Mergers and Post-Merger Integration.” And one of the major reasons mergers sputter is a failure to successfully combine the two work groups.
Most top executives underestimate how difficult it will be to integrate two different workforce cultures. And that’s when they have time to think about a merger and its after effects.
Not surprisingly, an article in the Wall Street Journal today talks about the employee “Culture Clash” following the merger of “the Wal-Mart of banking” Bank of America and financial fancy pants Merrill Lynch.
The culture clash may be most pronounced with Merrill’s “thundering herd” of nearly 17,000 stockbrokers, a group with a fierce independent streak that isn’t afraid to gripe to extract better terms from an employer.
For the denizens of the 94-year-old Merrill Lynch, which long prided itself on its fleet of top-producing brokers, it has been hard stomaching the new edicts from the Charlotte, North Carolina, bank. BofA prides itself on a Main Street approach, having expanded via $US110 billion ($167 billion) worth of acquisitions over the past five years, making it the nation’s largest bank by assets.
Merrill staffers joke nervously that Bank of America employees are recognisable in the elevators by their less expensive attire and American-flag lapel pins.
Merrill employees may be looking down on their new owners, but the reality is most of these joksters have little choice right now but to stay with Bank of America. Jobs are few and far between on Wall Street. Some of the Merrill crew were offered bonuses and to date, according to the WSJ, about 90 percent of the brokers have signed up with Bank of America.
Now comes the hard part. How the heck will all these employees be able to play nice in the banking sandbox? And how will workers there ensure their careers will not sputter at the new combined entity, or keep from being pink-slipped?
For Merrill brokers, they are in a good position because the company obviously values them enough to offer bonuses in a crummy market. But that doesn’t mean any of you should be sitting on your hands. Most of the banking experts I’ve spoken with say Bank of America is just starting to look closely at all its new operations and will do what it can to create a lean, mean, streamlined banking machine. Right now you may be on the star list, but tomorrow you could end up on that other “S” list.
And for you Bank of America veterans, just being employed by the last company standing doesn’t guarantee your job, according to most post-merger statistics. While you have a better chance than your counterparts at the other firm, today’s economic environment means managers will be more ruthless when it comes to keeping those workers who have the most customers, are most productive, and bring in the most business.
So, here are some things to keep in mind that I’ve boiled down from a recent MSNBC column I wrote on surviving and thriving a merger:
* The management at the acquiring firm often relies on the leaders of major divisions at the company they’ve bought to tell them who should stay and who should go. If you’re the top banana at a profitable division within a company, often the new managers will want to keep things intact at that unit, even if they do impose their own manager to oversee the operation. For everyone else, it’s time to do more than just your job.
* Paula Kosin, career consultant for Career Vision, advises employees to “put your CEO hat on” and figure out what the top leaders would want from a business standpoint. “They want to make the merger a success and they are not looking to rape and pillage and destroy things. They want to make sure what is going well in the acquired company continues, but they are also looking at what they can do as far as creating efficiencies.”
* Go to every meeting you’re invited to. You need to start connecting with the new management and get your name out there so you can snag a seat at the integration table.
* You can even make calls or send e-mails to key officials when you have an appropriate opening so you can get to know them — and they can get to know you. Talk about what your unit is doing and outline your responsibilities. And offer suggestions on how to make things better, or how to compliment an existing project, or how to grow a division, experts say. But do this all with real information about the new company and its business strategies and goals.
It may also be a good time to start building your personal brand as well. While I don’t think everyone should have their own blog or be endlessly updating their Facebook page, there are some positions that can benefit from doing more to build your brand in your industry. Some customers will definitely feel more confident if their money gal or guy writes an authoritative blog, or has a well-done LinkedIn page with hundreds of contacts and recommendations.
I’m always a big fan of mentoring folks. Almost every CEO I’ve interviewed had a mentor at some point in their careers; and following a merger, the insights of someone with a bigger title than you will only help.
And keep the doom and gloom, and snide remarks at home. Everyone probably bitched about the merger right after it happened and each side probably thinks they’re better than the other, but now is the time to start concentrating on work and not how much things blow. One high level executive I talked to recently told me when she was deciding who to keep and who to fire, a positive attitude was always one of the top traits she looked for in an employee.
I know, it sucks that things are moving so quickly today that you might get lost in the shuffle even though you’re one of the best at your job. But this is the reality we all have to live in. Let’s stop licking our wounds.
In closing, I want to offer all you corner-office dudes some merger words of wisdom about why you should all think long and hard about culture integration.
A while ago I did a story for Workforce Management magazine about the US Airways and America West merger, and a merger expert I talked to then summed it up well.
Mitchell Marks, president of Joining Force.org and author “Joining Forces: Making One Plus One Equal Three in Mergers and Acquisitions” said under managing the melding of cultures can lead to discontent among the employees, a loss of productivity and retention issues as employees wonder what the future holds. “In mergers,” he added, “culture is a lot like breathing. You don’t have to think about breathing until something threatens your ability to breath. That’s the same thing with cultures in a merger.”