There may be more than one location. More room for employees to advance or learn new skills. There may be new opportunities for the firm to specialize, expand and offer new services. So it will give peace of mind to all the parties if you determine your people strategy during the preparation phase.
Of course, creating new reporting lines for the organization is a delicate process with many potential potholes, as founders will naturally want to protect their people. What impedes this process further is that many founders do not have much experience yielding to others and considering other viewpoints about critical, firm-wide decisions. Many are independent businesspeople for a reason: They trust their entrepreneurial instincts and do not like being told what to do.
Determining who will make decisions and what that process looks like in the new combination of companies are prerequisites to advancing to the next phase.
The Easy Part
Many of the items thought to be points of contention often are not. Establishing new titles is a good example. Most founders pursuing a merger (or a sale) do not care that much about their title, or if they do, they can be easily assuaged.
The same goes for possible technology platform and application conflicts. While each firm in a merger brings along its own list of preferred partners, these matters are not often deal-breakers. The functionality and the pricing of the platforms are the overriding concerns.
Business owners considering mergers might be thinking of off-loading some of their current responsibilities and sharing them with others, which is why some issues that could be considered major hurdles tend to be minor.
Better Together
The preparation phase of a merger forms the foundation for what follows. So much so that when you fail to master that part of the process, the execution and collaboration/integration phases can become problematic.
In many ways, mergers are like marriages (without the fun stuff): When considering a potential partner, it is prudent to first work through a series of important issues and fully discover whether the benefits of merging outweigh the drawbacks. Often, they do.
Industry influencer and transition specialist Carolyn Armitage is a managing director with ECHELON Partners, a Los Angeles-based firm that provides investment banking, valuation and consulting services to registered representatives, IBDs, hybrids and RIAs nationwide.