Managing change? Integrating people during a transition? Networking across functions?
Timely issues for today’s organizations and all areas of expertise for one of Isenberg’s newest faculty members, Giuseppe (Joe) Labianca, the Berthiaume Chaired Professor of Leadership and coordinator of the management department’s PhD program. After spending 16 years in Kentucky, interspersed with research stints in Australia, Labianca is happy to be back in Massachusetts, near family. He has an undergraduate degree in psychology from Harvard University and a doctorate in business administration from Penn State.
Labianca brings to Isenberg a rare and valuable data set—15 million emails exchanged during a merger between two consumer goods companies over a two-year period.
“We’d been working with the client studying their new product development and they let us know they were about to purchase a company and wanted to know if we wanted to study it as well,” Labianca recalls. “We said, ‘Would you give us access to all of your email data?’ and they were up for it. I don’t know of any other organizational data set that’s as large and comprehensive.”
By using software to anonymize the messages and find communication patterns, Labianca and his team got a fascinating look at the merger in real time. Their findings to date have been published in a pair of articles in the Journal of Applied Psychology.
Although the number of mergers and acquisitions have increased dramatically over the past decade, the vast majority fall short of expectations. An estimated 7-in-10 mergers fail to achieve their intended cost savings and business growth, according to Labianca. Many times, firms also lose talented people just when their expertise is most needed to integrate organizations and make the merger a success. In order to get better merger and acquisition (M&A) outcomes, the post-merger period needs more study, Labianca notes.
“In any given year, a huge amount of M&A activity takes place—in the trillions of dollars—and companies always go into it thinking it’s going to go well. It very rarely does,” he says.
The team analyzed messages exchanged over a two-year period, spanning pre- and post-merger so they could compare “before” and “after” snapshots. In “Turnover During a Corporate Merger: How Workplace Network Change Influences Staying” (Journal of Applied Psychology), the research group discovered that people with clout—either because they had formal power or informal status—tended to quickly decide whether to leave or stay. If they decided to stay, they broadened their networks and forged relationships with colleagues in the other organization.
“We saw that the more power someone has, the more likely they are to widen their network to be a broker sharing knowledge across the organization,” he says.
This brokering behavior was valuable and relatively unusual. “Most of the time, people don’t want to change who they are talking to. They stick to their usual contacts,” he notes. But with high-power brokers, “their language and topic-use changed. They started incorporating language from further away from them in the organization.”
In essence, they were “the ones doing the real work of integration by gathering information from disparate parts of the organization.”
“We know from decades of research that brokers are extremely valuable because they help to integrate across different areas of the organization,” he says. “That's why they get ahead faster in their careers, and their salary change over time is greater.”
In a second paper, “Employees’ Responses to an Organizational Merger: Intraindividual Change in Organizational Identification, Attachment, and Turnover,” also published in the Journal of Applied Psychology, Labianca and the same group of colleagues looked at interventions that would help people stay through a merger. Labianca recommends organizations “actively manage networking opportunities through transitions,” he says, including assigning people to cross-functional teams and providing many opportunities to collaborate. “You want managers to help their direct reports work with people from the other side, so they begin to see the possibilities of staying, and they see a future in the new organization.”
Labianca knows such a rich data set could fuel years of study. He’s already got the next work teed up: investigating gender differences in language use during a merger in order to understand the implications for networking and, ultimately, for women’s careers.
“There hasn't been a lot of research in this area previously,” Labianca says. “What little has been done shows potential negative outcomes for female managers. But I think that more research is needed to make any definitive statement.”