Purple Paper: Leadership’s role in mergers

Change management skills needed at fast-growing companies

Building leadership capacity and change management skills at the top of an organization that cascade down into middle management can help maintain growth momentum after a merger.

It takes a significant, intentional effort on the part of the combined organization, but it’s critical to success, as the leaders of two furniture- manufacturing companies that recently merged to form a company with nearly $1 billion in annual revenues are learning.

Bridging cultures

Creating a common culture is imperative after companies merge. Typically, each organization is protective of its own culture that produced the success it has experienced to date. However, new leadership has to take the best ideas from both organizations to create a new culture.

This task was especially challenging for the furniture company, because the cultures of the two merging organizations were so different.

One was a third-generation family business that had a small community-focused culture and a traditional business model emphasizing showroom sales.

The other merger partner, located in a slightly larger community, was a hard-driving organization that focused on selling higher volumes of furniture at lower margins using modern, internet-based sales strategies.