Tuesday, May 26, 2009

How not to run a merger

A merger is a unique kind of project. You’re taking two different companies and jamming them together. There’s a blend of technology and culture that have to be understood in order to be successful. Back when I was at Sprint, I was involved in a number of mergers, some involving as many as half a million customers, so I’ve got some experience here. As a Delta frequent flier (I’ve been Platinum Elite for a number of years), I am observing and feeling the pain of their merger with Northwest.

A merger is in a large part an exercise in organizational change management. You are fusing two different cultures. A lot of people are going to be scared, resistant, or just unsure about the future. The first step in addressing this is vision. What is the future organization going to be? Is it an even blend of the 2 organizations? Is one organization going to dominate? In projects I’ve been involved with, I have been on the side of the dominating organization, assimilating the culture of the other company involved in the merger. Resistance is futile.

Delta is the “Borg” in their merger. In Kansas City, the NW operations were shoved into the Delta terminal. If you’re on a NW flight, it’s almost as if you’re an afterthought. I had to check in with an agent today and after being in the first class line, I was told I had to talk to a “NW” agent at the next counter over, even though it all looks like Delta. If Delta is going to assimilate NW operations, they have to make it seamless to customers.

Another key to a successful merger is understanding stakeholders. There are customers, employees, and suppliers to think about. Each group has separate needs that have to be thought through.

For example, I’ve noticed a decline in moral among the folks working at the check-in counters. I don’t know if they are from the Delta side or the NW side, but they don’t seem to be happy to serve customers. My guess is that these stakeholders have some need that the organization isn’t addressing.

Tied to stakeholder analysis is communications. What are you telling each of these groups? Are you making it easy for customers to understand what is happening? Do employees have the right answers for customers? Is there an effective channel for these stakeholders to provide feedback?

I’ve sent a couple emails to Delta with specific observations of problems brought on by the merger. I’ve received a canned response, so I don’t know if someone is actually addressing some of the issues I have brought up or just trying to pacify me by giving me a few extra miles in my frequent flyer account.

Obviously technology is a critical piece as well. Customer databases have to be combined. Systems have to be tied together. With the state of technology what it is today, with tools such as BPMS, this problem is not as challenging as it was a few years ago.

I won’t pretend all my merger projects went flawlessly. There were technical issues. There were times when people where spending some long hours fixing problems. But in the end, I think both the employees and customers came out better in the end without to much pain. From my perspective, Delta needs to be paying a little more attention to their customers and employees.


Orangesleeves said...

Addressing the issue in a blog with your credentials might be more effective than submitting an often forced form canned email. Anyone in public relations for an organization of any size should have a Google Comprehensive News Alert(s) set "as it happens" to monitor anything (news, blogs & websites) with key words of identifying the subject. For example, I have an interest in the ongoing revival of the Kansas City Zoo. It is amazing how every day I am alerted to families’ blogs of their assessment and/or experiences of their visits. It is a very inexpensive, not labor intensive and immediate feedback that results in responsive action if necessary. I also use it to stay on top of my neighborhood, subdivision, city, community, friends, clients, colleagues etc. Try it, you will amaze and impress others when you forward articles or links of interest as the information breaks. When you receive too many emails daily on a particular topic you can always expand the key words or revert to a daily/weekly digest.

Bob Tarne said...

I had the same thought when I posted this. I'll see if Delta notices it.