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The Merger of Sales Forces Part I

What happens when two companies merge?
By Jack R. Snader

In general, studies on corporate mergers over the past two decades have pointed to four major findings:

  1. Mergers are driven by financial reasons. Corporations have frequently been blind to the long-term consequences of mergers on human resources-both in terms of personal stress and professional negative effects.
  2. Clashes of culture between the merging companies often significantly undermine the original value and intent of the merger.
  3. Inadequate formal and informal lines of communication trip up the integration of resources within the merged companies.
  4. Training and HR staff, who are usually barred from the confidential corporate information loop, are, through no fault of their own, typically unable to provide the kind of assistance to workers that they are hired to provide.

What does this mean for sales teams? After the news of the merger there is an almost immediate black-out of information from Corporate centers as countless plans are being hatched and scrambled behind closed doors in executive suites. Sales managers feel ineffectual because they cannot help their people when they themselves are in the dark. Salespeople and managers alike wonder if they'll still have a job in the near future, if they'll have to move their families, who they'll be reporting to and working with, what they'll have to do differently, and overall, what it will be like working for the new company.

Job uncertainty and the thought of possible relocation, the possibility of new performance evaluation criteria, changes in reporting relationships, and a certain degree of loss of control over one's professional life all cause internal stress that affects sales morale and performance. Salespeople wonder whether they'd be better off leaving right away, and having no one to consult, they privately consider their options.

The Merger Dilemma

The dilemma facing senior management is grappling with how to retain talent they want while eliminating the "dead wood." Often, it doesn't go well. Sometimes the very salespeople and sales managers wanted most are the first to leave-particularly when they work for an acquired firm. In fact, a recent article in The Wall Street Journal estimated that between 50% and 75% of the key people in merged firms plan to leave the new organization within three years.

Alternatively, the new parent company may decide to reduce the sales force to streamline operations, leading to a series of wrongful termination lawsuits. Management is then distracted not only by the merger of operations, methods, standards, and employees, but also by preparations for corporate defense. To avoid legal problems, corporations sometimes offer three-year continuations of sales programs, but these often come at an exorbitant expense.

After the period of uncertainty is finally over and announcements are made, salespeople who remain with the company face a new set of challenges arising from the clash of sales cultures. From "buttoned down" to "laid back," from dialog based communication to a canned presentation approach, from an established development and coaching process to random training events, from a clear selling language to completely different terminology, salespeople feel tossed back and forth amidst the waves of sales management philosophies they are instructed to follow.

Taking a whole new selling approach can be disorienting as well as disconcerting to those sales professionals who have been successful using their own approaches in the past. All too often, salespeople feel like losers in the merger process, and it often shows in reduced contributions. Some salespeople, when meeting with customers each day, bear their own personal grudges that color their behavior from that time onward. Some even "retire on the job," believing they have been with their corporation too many years to change companies at that point and feeling that they are "owed" the rest of their careers after the stress they've been put through.

Wishful Thinking

On the whole, it would appear that a considerable amount of wishful thinking goes into mergers and acquisitions. The financial, operational, and market synergies are obvious driving forces, but the reality is that combining large, complex organizations into one effective and streamlined entity is tremendously difficult. Upper management's attempt to blend the energies and egos of tens of thousands of employees within unrealistic time frames usually produces mixed results at best.

Fortunately, there are steps that people on all levels of a merged organization can take to help to shape the new culture for the best. In Part 2 of this series of articles, we'll offer some suggestions.

For information on Systema's sales management development systems, e-mail us at systema@systema.com

Energizing Sales Performance World Wide Since 1969



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