Company mergers and acquisitions are a fact of business life as firms seek to grow, expand their portfolio or enter new markets. But it is concerning, therefore, that more than half of all mergers and acquisitions are expected to fail[ii] – largely as a consequence of ineffective integration of the processes and practices of the companies joining forces. Obviously, signatures on a contract will never be enough to turn two different firms into a strong single entity with a single culture. This kind of change does not happen overnight and is particularly the case when the employees of one of the firms involved feel like a conquered people whose roles and ways of getting things done are about to change. A recent study by Iron Mountain in Europe found that despondency is widespread among employees who manage information at a firm that has been acquired by another. For these employees, concerns about integrating customer and company data and addressing disparities and duplication take second place to worrying about job roles and the impact of change. A third of them claimed there was no clear approach for record consolidation and data protection, 44 percent said there was no process for integrating paper into new digital systems, and 31 percent said the same for the storage of physical papers.
The risk to information is clear: integrated and secure customer data is vital for business effectiveness, the quality of customer service and brand reputation. Unmanaged, unmonitored information left floating around a business is vulnerable to loss, damage or exposure. Company mergers, on the other hand, paint a far more positive picture – perhaps because they are perceived by employees as a coming together of equals. Our study found that employees on both sides of the merger process are focused equally on the main information management challenges; with three quarters (71 percent) of them feeling well supported. The European manufacturing and engineering sector appears particularly prone to acquisitions, while mergers are most common in the financial services and insurance sectors, where market consolidation is a growing trend. Our research found that employees in the record-intensive, customer-focused financial services and insurance sectors were the most likely to worry about integrating different data sets. Employees in this sector were, however, also the most likely to feel supported and informed, both about how to consolidate and protect digital data, as well as how to integrate and store physical documents.
We found a very different picture among manufacturing and engineering firms. Employees in these firms were the most likely to worry about change in the way they handled information; and felt the least supported in terms of company guidelines and communication. However, across all the sectors and markets surveyed, it was clear that many employees work hard to adapt to the new post-M&A landscape. One-in-three employees said that, although they had felt reluctant at first, they tried to take a positive attitude and get to grips with the change. In short, our study found that the way employees feel about the M&A influences how they take responsibility for the information they manage. Moreover, we found that employee sentiment can be transformed by effective information management approaches and clear communication.
Information is a vital business asset and needs to be treated as such. There are simple, practical steps a newly combined firm can take to ensure the full wealth of knowledge and intelligence is harnessed and secure. For example, when it comes to paper documents, we would recommend an approach we call “paper light”. This combines secure off-site storage for archived paper documents with an active digitisation programme for frequently accessed or new data. Digitisation ensures that important information on paper can be released into the business and digital information systems, such as a newly integrated CRM database.
Most of all, success requires a strong commitment to communication and employee engagement. Staff need to understand what is happening and why, and what they can or are expected to do to integrate and protect information. During times of change, this becomes more important than ever. Our study confirms that going through a merger or acquisition can cause employees responsible for managing valuable company information to feel insecure in their role and under-supported. In an information-driven world, these employees could very well be holding the future of your business in their hands. During times of change, firms would be well advised to offer sufficient support to their information managers and to make sure that changes to processes and policies are clearly and frequently communicated.
iOpinion Matters for Iron Mountain, the study surveyed 1,257 office workers who work in either manufacturing & engineering, legal, financial, pharmaceutical or insurance firms in the UK, France, Germany, The Netherlands and Spain.
iiStudies by, among others, KPMG, PwC and Deloitte
