Late last month, Amazon.com (AMZN) announced that they would be acquiring MGM for $8.45 billion. Although this is definitely an exciting development for the properties and franchises that are under the MGM brand, there will undoubtedly be challenges the companies need to overcome to make sure the merger is as smooth as possible. If you acquire another company, you will most likely run into the same issues as Amazon. So, here’s a rundown of what you need to know about a merger and acquisition, and how you can handle the challenges that arise.
Amazon & MGM
MGM has an amazing catalog of films, including Silence of the Lambs, Stargate, Tomb Raider, Legally Blonde, and, of course, James Bond. They also have hit TV shows such as The Handmaid’s Tale. These properties will definitely add to Amazon’s offerings and help them take the entertainment industry to the next level.
Although Amazon already has plenty of experience in producing TV shows of their own, that doesn’t mean everything will be smooth sailing during the merger. Problems arose during the sale when it came to James Bond, and the famous franchise almost threw a wrench into the whole plan. Amazon, even now, won’t have full control over the series: it’s co-owned by Eon Productions and any major decisions regarding casting, distribution, and marketing will have to be in agreement with them.
There are definitely details that will need to be worked out when it comes to this merger and acquisition. So, how do companies actually overcome these challenges, even in smaller businesses?
What Challenges Do Merging Companies Face?
Small or large, companies will face similar issues if they decide to undergo a merger. Done incorrectly, it can be disastrous for employees, customers, and the overall business. It’s essential to know what challenges lie ahead to help develop a plan.
Some of the common issues and their solutions during M&As include:
Talking with Employees About the M&A
Whether you’re in the company that’s being acquired or you’re the acquiring company, talking to employees about the merger can be difficult. Employees will have a lot of questions, concerns, and worries. Whoever is doing the talking needs to take this into account and communicate properly, effectively, and transparently with them.
Keeping Culture in Mind
It’s likely the business being acquired has a culture already in place, and it may differ from the acquiring company’s culture. This requires leaders to come up with solutions that not only merge the companies, but also merge the cultures.
Choosing The Right Person to Lead the Merger
Choosing the incorrect person to lead the merger can lead to serious issues, especially for employee retention. The manager in charge needs to understand both sides of the coin and be able to lead everyone through cultural changes as well as changes in processes.
Making Decisions About Talent
Occasionally, tough decisions about talent have to be made. For example, Company A may already have a head marketer and may not have room for the head marketer in Company B after the acquisition. HR departments and other leaders will have to consider who stays, who goes, and who will be given a new position.
Any Other Differences in the Businesses
Businesses will often not likely have the same benefits packages, contracts, customer service policies, and pay scales. When a merger takes place, these differences can cause employees and customers to look elsewhere unless it’s handled correctly. Leaders should be comparing the different options in packages and processes to ensure the best policies are in place for employees of both companies as well as the entire business.
Overcoming These Challenges with Documentation
One of the best things you can do for both companies when it comes to mergers and acquisitions is to have everything documented.
First, the two businesses should have processes, policies, manuals, guidelines, procedures, and work instructions clearly outlined. This will allow the acquiring business to make the best decisions regarding work, employees, benefits, customer service, and more, while also having the information needed that makes the acquired company tick.
For example, if a key employee from the acquired company suddenly quits before the merger is complete and they were the only one who knew how to use a specific piece of machinery or perform a certain task, the businesses could find themselves in trouble. However, if documentation about the processes were in place beforehand, it would allow the department to come up with a contingency plan and even train a new hire.
Second, documentation will be key in getting all employees on board with the changes. New processes, employee handbooks, and benefit packages will be needed that match the brand, culture, and procedures of the merger. Proper communication and documentation here will help with employee retention and any hiring needs.
Mergers and acquisitions aren’t without their hiccups. There will be challenges ahead for the businesses and employees alike. Amazon and MGM will not be immune to that. However, proper strategies and documentation can help ensure there are less disruptions to workflow or output, even when things get hectic.
Are you acquiring a new company? It’s essential to have a plan going forward. We work with businesses like yours on technical writing projects such as policies, guidelines, documentation management, crisis management, and more. Start by getting in touch with us.
