Noreen McGarry was a successful senior account representative at a business telecommunications firm two years ago when her company merged with a former competitor.
Right off the bat, she knew there was going to be trouble. Most of the senior managers - with whom she had good relationships - were replaced, and a round of layoffs began.
"Since the new regime had been my competitors for so long, my view of them was negative to begin with," she admits. "I wasn't crazy about their management style, and I didn't agree with their decisionmaking."
No shrinking violet, Ms. McGarry made her opinions known. As she puts it, "I was in my new manager's face."
Today, McGarry is happy selling real estate and designing Web pages from her own office, close to her home in Beacon, N.Y.
Although she survived two rounds of layoffs and left her old job voluntarily last June, her story illustrates many of the potential pitfalls employees face when one company comes courting another, say experts on the human dynamics of corporate mergers.
First of all, forget any happy talk about a "merger of equals," advises Larraine Segil, an expert on the human-resources aspects of mergers and acquisitions and author of "Intelligent Business Alliances" (Times Books).
"There is always a dominant culture and a dominant strategy," she says. "Generally, the manager who ends up holding the checkbook is part of the dominant company."
That being the case, it makes sense to find out as much as possible about potential suitors if you even suspect your company might become an acquisition target, says Caela Farren, president of Annandale, Va.-based MasteryWorks, a company that advises Fortune 1,000 firms on hiring and retaining employees.
"You really need to be paying attention to what is going on in your industry," Ms. Farren says. "If other companies in the same business are getting involved in mergers, acquisitions, and alliances, chances are good yours will, too."
John Challenger, CEO of international outplacement firm Challenger, Gray & Christmas Inc., says job cuts related to M&A activity are at record high levels, running 35 percent ahead of last year. Through the first three quarters of 1999, such job cuts totaled more than 60,000 versus fewer than 45,000 in all of 1998 (see story at left).
No slowdown in sight
Clearly, the M&A juggernaut is not likely to be stopped anytime soon. Mr. Challenger attributes that, at least in part, to a "highly nonaggressive regulatory antitrust environment, other than Microsoft," on the part of federal regulators.
There is little or nothing the average employee can do that will affect whether or not his or her company becomes an acquisition target. Or, for that matter, to keep his or her job if a merger does occur.
"The truth is, a lot of people do everything right and still lose their jobs because they were on the acquired company's management team or duplicated a function the acquiring company wanted to keep its own," he says.
Still, you can take steps to boost your chances of surviving a merger. Many of these steps will also help increase your overall marketability in today's rapidly changing workplace.
*Have a real breadth of skills. That is the most important piece of advice Tom Grubb, an M&A integration consultant in Hunt Valley, Md., has to offer. "If you lock into a particular function - even worse, a small role within that function - you make yourself less useful," he warns.
Employees at a company that has just been acquired should also adopt a new attitude toward their jobs, Mr. Grubb says. "They need to think and act as if they had just left their old job and gone to work for a new company, because in effect, that's just what has happened. They have to prove themselves to the new owners," he says.
*Try to get yourself onto one of the post-merger integration teams, suggests Ms. Segil. If your primary skill set is in an area that is going to be eliminated, you may end up simply planning yourself out of a job, "but at least you won't be blind-sided," she notes. And the contacts you make may prove valuable in finding another position, either inside the merged companies or elsewhere.
*Be prepared to deal with major changes if you want to survive. "Virtually all mergers are followed by one to three years of turmoil, sometimes bordering on chaos," says Robert Lamb, professor of management and finance at New York University's Stern School of Business. Employees at both the target and acquiring companies are placed at risk as a result, he adds.
Equally important in a merger survival strategy is what not to do, says Challenger. Key mistakes to avoid include:
*Telling people at the acquiring company that "this is the way we have always done things here." Starting a conversation with those words could mark the beginning of the end of your employment, he warns.
*Relying on managers and supervisors to communicate your value and worth to the new owners. Many bosses are not aware of what individuals, especially those a few levels below them, have done for the company. Challenger advises preparing a summary of what you have done for the company at the first hint of a merger and updating it weekly.
*Trying to stay "off the radar screen," in the hope that if you are not noticed, you won't be laid off.
That approach is "probably the fastest way to guarantee your exit from a company following a merger," Challenger says.
Acquirers looking for "dead wood" to eliminate in cost-cutting moves tend to home in on those employees with their heads in the sand.
(c) Copyright 1999. The Christian Science Publishing Society