Managing change with incentives

As mentioned in the latest issue of CIM magazine, The Marketer, mergers and acquisitions often fail to benefit anyone. According to KPMG, 83% of M&A's fail to increase shareholder value, while 53% actually destroy it.

As the Marketer article continues:

" in merged companies cultures clash, morale plummets and uncertainty holds sway. With the new ownership, or just in an expanded organisation, employees often have little idea of where they stand or what the business they work for represents."

While the article continues to highlight the importance of internal communications and 'employee branding', it got me thinking about rewards and motivation. I was recently speaking to a friend who works for a small pharmaceutical company, which was acquired by a large pharma corporation. He rather wistfully told me that while the parent company had an incentive programme, his company currently weren't part of it, nearly two years after the acquisition.

Of course without knowing exactly how the rewards and recognition programme works at Big Pharma Corp, it is difficult to know what is involved in rolling out the flexible benefits package to acquired companies. But I do know that adding new users onto our iD-points solution takes hours, not months.

In other M&A situations of course, both companies will already have incentive schemes in place, and it will be a case of integrating the two systems, or migrating one across.

Managing change during corporate takeovers is always a tricky subject, with employee morale and retention key issues. Ensuring that everyone is part of the company incentive offers an attractive 'easy-win' to help ease the transition.