Will you still do a cheese plate on Fridays? Ways not to stuff a merger
Mergers are like the plastic bag scourge facing our planet – we’re littered with them and they are messy. The media and ad industry is no exception strewn with mass casualties and wads of wasted cash. The successes are rare and exceptional. So what makes a merger work? Being on top of the opportunity bell curve helps, but it’s the people who really matter.
- There’s no one ‘good’ way to do a merger, 70 per cent of them fail. They are messy and uncomfortable
- Don’t neglect your people – the small things matter. People are the vital to success in a service industry
- Communicate early and often and when you think you’ve said it enough, say it again
- Have a clear vision and be aligned
- Don’t forget the cheese plate
When Laura Aldington, the CEO of Host/Havas, was navigating the merger of those agencies, she encouraged staff to submit questions anonymously that she would seek to answer. One of the most pressing issues was whether the merged agency would still do a cheese plate on Fridays.
It symbolises the most important aspect of a successful merger – the people.
Speaking on the Mi-3 stage at Advertising Week APAC during a session artfully named 'How not to f#ck up a merger', Aldington said: “The really tiny things matter to people … What are the rituals you are going to maintain? It was a bit of a learning call for us about what builds culture,” she said.
“On day one of our merger I thought ‘there is not one single person who has chosen to work in this agency’ … so you have a hell of a job to get people to want to work there.”
Strikingly, the panel of media and advertising executives has lived through multiple mergers during their careers - the good, the bad and the ugly.
During her due diligence of an agency acquisition as practice lead media advisory at KPMG, Karen Halligan spoke to a range of industry types, more than one of whom had experienced 21 mergers during their careers. Halligan herself has lived through five – and none were good.
Recounting one of them, Halligan said: “A client I was very, very close to rang and said ‘so are you staying then?’ and I said ‘staying where?’ and they said ‘you just got bought.’
“It’s the little things that you don’t often see that are the triggers that make people feel really unsettled … and cultural disconnect can transfer through entire building … A great experience feels more rare than what happens generally at large in the industry.”
What works best, however, is a merger born from the seeds of opportunity, with a clear vision. Where there is a communication plan that is out early, often and is transparent. Where people’s uncertainty is allayed and their needs heard and acted upon. Speed is critical to avoid information vacuums that fill quickly with rumour and speculation, fear and anxiety.
Paul Sigaloff, managing director of Verizon Media and self-described “change management junkie”, whose company merged Yahoo! and AOL and dissolved the Australian joint venture with Seven Network, said a clear goal and developing desire in your people are key.
“The strategic fit – why AOL and Yahoo! were put together – it was very complementary in terms of its footprint, it was around scale of consumers and it made a lot of sense, which helped in talking to people about why we were going on this journey,” he said.
“When you’re in the moment six months in and talk to your leadership team and say ‘you know what? We’ve nailed this’. And you get to 12 months and say ‘God we were rubbish six months in, we are so on fire now’. And then you get to 18 months and it gets better. What’s lovely to see is when you get your people together and create shared experiences is the language changing. For us it used to be ‘we did this’ and ‘we did this so well at Yahoo!’ and as time evolves it’s ‘what we need to do’, it’s all about the new entity and that’s when you think this has all come together.”
The last word should go to Peter Vogel, CEO of Wavemaker, appointed to oversee the merger of media agencies MEC and Maxus, who said that the preoccupation with strategy, logistics, legalities and bedding down clients is done at the expense of people.
“Often we are thinking about the grandiose strategy and actually you have to distill it down to the individual. ‘Where am I going to sit?' is a big thing. At the end of the day we are a service industry, it’s all about our people,” he said.
“I thank my lucky stars every day – the only reason our merger was a success in Australia is the people. We have amazing people that truly supported it and really carried the load and I’m eternally grateful for that. The success of the merger has got nothing to do with the strategy globally it’s got to do with the people in the business today.”
Mergers ain’t easy – as the adscape can perennially attest. But agencies and media owners are getting better at what makes a merger work. It sounds too simplistic – but taking care of your people and understanding that the little things can mean a lot – is pivotal to success.
It’s ironic that those who work in what is essentially the communications industry neglect to actually communicate. Funny thing, it works.
Some things as simple as where people sit, where the office will be located and their employment conditions, are equally, if not more, important than what the new brand will look like, the business imperative and strategic rationale. If people willingly come along on the journey, clients will join the ride.