From media reports, it seems there are two points of view on the probable merger of Delta-Northwest Airlines: 1) The merger will immediately create tremendous financial and market synergies, OR 2) The merger will immediately create tremendous hassles and is not likely to succeed. The fact is, both points of view may be right. The question is, can difficult deals succeed despite extreme challenges?
While every deal has challenges, some are clearly more difficult than others. That being said, here are a few of the ways to increase success:
- Create realistic expectations for the deal: It’s a recipe for disaster to focus on the positive side of the equation while downplaying the known risks. For example, we already know that the two airlines have vastly different aircraft, organizational structures, and cultures. We also know that Northwest’s pilots are protesting the deal. Given these challenges, leadership needs to assess what is truly realistic to expect in one year, in two years, and in three years. If the answers don’t meet their criteria for “success,” then it may be a wiser choice to explore alternatives.
- Create unity at the top: I’ve seen more problems during integration when the new executive team (and board) are out of synch with each other. When the new team clearly shares the vision, mission, values, key objectives, and strategy for the merged company, it’s easier to accelerate subsequent decisions about supporting goals, priorities, and infrastructure.
- Communicate about the plan: Once it’s probable that the deal will occur, employees across the merged organization need to understand how the integration plan will unfold so they can make adjustments to their jobs accordingly. For example, purchasing systems that had been in place and functioning well for years suddenly vanished immediately after two major companies merged . Because there was no communication prior to the change, no one was prepared. This caused major delays on several key projects, as employees struggled to figure out who to contact for what. The solution is a balancing act: find out from employees what information they need in order to continue to do their jobs well; share information to the extent that you can; and update them with enough lead time for changes to happen without firefighting.
Just because a deal is difficult doesn’t mean it can’t succeed. However, it does require everyone to take off the rose-colored glasses and think through – in advance of making commitments – how they’re going to pull this off so that risks are minimized and the projected benefits can really happen.