Who should run the show when my company mergers with another?

Dear Aunty B,

My business partner and I run a small creative agency and are starting initial discussions with another company about a merger.

 

While the merger is a very good idea, it is very unclear who would be running the merged venture. I had assumed that I would be running the larger company, but it has been pointed out to me, by my business partner of all people, that I have not had the experience putting merged companies together and the woman running the other business has. Plus, she has a good track record running larger businesses, which I don’t.

While the other CEO seems to know what she is doing, she runs a very different company and culture to ours. I am not convinced that she is the right person to be running the company and I think some of our staff might leave.

I have had a talk to my business partner about this but she is keen to proceed.

How should I proceed?

Faastl

Dear Faastl,

Good for you! You know what your problems are. That’s a good start. I meet many people in business who know they have a problem but they don’t know what it is.

The problem is that you have not worked out one of the most important parts of the merger: the senior management team. Who runs the show? What roles do the senior players end up doing? This is very tricky because you often start this process with whose nose will get out of joint instead of with a list of the skills, capabilities and drive of the people, and aligning that with the business plan for the next two to three years.

You also need to have a close look at culture. Often mergers fail because of a culture clash, which drives away the key players that have made the business successful in the first place.

Here is what you should do. Sit down and have a strategy session about what the merged company looks like, where it’s going and the goals you want to achieve.

Then do a list of the management structure needed to do that. And then put names against those boxes. It’s confronting, but so too is ending up with a merged company that is a hotbed of egos jostling for positions.

Be smart,
Your Aunty B

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