Duluth, Minn. – Obermiller Nelson Engineering’s (Obernel) Duluth office organized a free continuing education…
By definition, a merger is a union that’s been mutually agreed upon — two or three companies come together to form one new company. A merger is about decreasing competition and increasing operational efficiency. While they can sometimes have a negative connotation, mergers can be a good thing. Companies gain operating efficiency, get better support for employees and clients, grow geo-graphically, give more diversification and many more positive things.
In June, Obermiller Nelson Engineering and Commissioning Solutions (CxS) had the opportunity to merge with Foster, Jacobs & Johnson (FJJ). In our case, we kept the names of each one for strategic purposes, but we are very much one company. We each gained something different from the process.
So how do you merge with another company? There are some critical steps to take before even considering it. The merger process is an in-depth one, and it’s important to know who you are as a company in the beginning because it will be questioned throughout the process. It’s also important to have defined your company’s mission and core values so when you join forces with another company or companies, the two or three of you will mix well at a leadership level and an organizational level. Here are three things to check on your merger list to ensure its success:
Alignment of Leadership
It’s critical that all company leadership is on the same page with the same vision for the company’s future. The goals don’t necessarily have to be the same, especially if the business models are different, but they need to somehow be related or blend well together. As an owner or leader, how will you know if what you want is the same as what some-one else wants if you haven’t defined it? If you don’t know ahead of time, you can lose what made your original company great.
Egos cause problems at the business ownership level. This is especially true when bringing two or three groups of owners together. Egos have no place in ownership, and especially in a merger or acquisition. A merger cannot be about personal interest or gain — it can only be about the company and the people employed there. Going through the process requires owners to think outside them-selves and focus on a long-term, sustainable model for the business’ continued success.
If an owner or leader is mostly concerned with how they will advance themselves professionally or how their bank account will grow, it will be blatantly obvious to everyone involved. And if your team knows you only care about yourself, they won’t stay. You’ll be left with empty desks, footing the bill for employee turnover. Do what’s right for your people.
Alignment of Culture
A merger is like a marriage — you might do different things, but at the root, you need to value the same things and have the same moral and ethical standards. Before considering a merger, ask these questions of yourself and your company: How do you treat your employees? How do you feel about your clients? What’s your mission as a company?
Think about this — how could you know if your company values are similar to another company’s if you haven’t put pen to paper and specifically stated what they are? How do you know if you’re similar to another company if you don’t know who you are yourself? Mergers and acquisitions can be a good thing for both parties, as long as you make sure you do the work on the front end because it will have a major impact.