How mentoring can facilitate mergers

The immediate aftermath of a merger poses a number of major challenges. While many of these challenges relate to integration of systems and structures, the people challenges are often the most difficult and long lasting. In particular:

• Ensuring that senior level talent does not leave. Headhunters target merger situations, because the uncertainty causes people to seek security by looking at other job possibilities “just in case”
• Developing trust between executives in the formerly separate companies. The level of trust is especially diminished, when there is a real or perceived difference in power between the merging organizations. “Conqueror syndrome” is a commonly observed phenomenon that obstructs whole-hearted engagement of executives in creating the new organization
• Cross-organizational communications. In a typical merger situation, communication quality and openness diminish, partly because of a lack of trust but also because it takes time to build new informal networks.
• Survivor syndrome. If there have to be job losses, the survivors often feel guilty and relived at the same time. Their motivation and their ability to take the managed risks that the new business needs both decrease and it may take a year or more before they recover confidence.

Introducing a well-designed mentoring programme for top talent can make radical and positive difference to managing each of these challenges, for very little cost. In well-designed mentoring programmes, people engaged in mentoring are typically at least one third less likely to leave. (One classic case study shows a 1300% differential!) Because mentoring relationships work by building rapid rapport amongst people, who have different background or experience, they are arguably the fastest method of creating intra-organizational trust. Mentors and mentees typically help each other build networks and in a merger situation, this activity comes it the fore. And, if survivor syndrome does become an issue, mentors (if they have been properly trained) provide the safe environment, where people can discuss their fears and concerns, and regain their resilience and refocus upon performance, both for themselves and for their teams.

There has been no empirical research around the impact of mentoring in merger situations, but a rough estimate, based on experience, is that it has the potential to contribute over the first year a minimum of 5% to productivity, profitability, share price, and retention of talent – not least by how it helps overcome the four key challenges above.

© David Clutterbuck 2014