Integrations and Transformations Fail Due to Ignoring People
People-related risks, particularly employee turnover and productivity collapse, are critical threats in M&A integrations and transformations. They can derail the entire process, leading to the loss of both the investment and the anticipated benefits if not properly addressed.
No significant change, M&A integration, or transformation can succeed without people engaging in it. Disengagement or resistance, triggered by emotions arising from the change, can cause employees to leave or lose their performance. These experiences can undermine the meaning- and value-driven inspiration to make a difference and be part of the change.
The problem is significant. According to EY, "mergers and acquisitions have the capability for immense value, but research demonstrates that 70%-90% of M&A fail or underperform". Deloitte notes that "most of the barriers to a successful integration are related to people and company culture".
The same applies to all transformations: McKinsey emphasizes that "for a company undergoing transformation, cultivating employee “will” to change the way it operates is critical for success".
Even though people-related risks in M&A integrations and transformations are high, they are not as well-known as they should be.
Traditional Surveys and Metrics Do Not Understand Behaviors and Risks
Emotions drive decision-making and behavior–whether it's commitment, passivity, disengagement, or resistance in relation to change. But just like KPMG points out, "while sentiment analysis is important, it comes up short".
To truly understand how specific aspects of change drive the different behaviors through emotions, traditional methods and surveys are insufficient. With one-dimensional scales and metrics, organizations tend to focus on satisfaction–an emotion that reflects being in the comfort zone and fosters passivity rather than promoting change.
Fortunately, with emotion and behavior science, it's possible to illuminate both emotions and behaviors simultaneously. But even that is not enough: you need to go beyond emotions and behaviors to uncover their origins and identify the right actions to change the domino effect of causes and consequences. You need simple yet powerful insights to manage the narrative of the change process.
This may sound difficult, but it’s actually not. This is precisely where People Impact Analytics™ can help you—much more easily than you might think.
Satisfaction—or contentment—is merely one of many human emotions. It is often used to measure the positivity or negativity of experiences. However, it is frequently overlooked that the level of satisfaction (or recommendations) does not correlate with engagement.
The 20 emotions in the image are based on a method developed at the University of Geneva, Switzerland. This model covers the human emotional spectrum in a comprehensive way. NayaDaya Analytics uses this scientific model as part of its People Impact Analytics™.