When it comes to M&As, company culture is one of the most important assets on the balance sheet, says Sinead Devlin
There is no denying that a successful merger or acquisition can bring significant value for all however it is not enough to simply have a successful deal. What happens next to ensure a successful integration? How can you ensure a profitable, productive company in the long-run?
The answer lies in the balance sheet, but perhaps not in the expected way. While analysing company assets to decide what to keep and what is disposable, it’s common to overlook one of your most important pieces of capital. If you guessed “people”, you are partially right. The element you can’t afford to overlook during this time is an intangible asset – your company culture.
As previously established groups of employees, policies, and operations come together, it will impact the newly unified organisation’s company culture. There are few times more precarious for employees and culture than during times of change. Consider the truism from Peter Drucker, “Culture eats strategy for breakfast.” Culture is more than just a luxury, it is an essential element to the long term success of any M&A.
From a psychological perspective, the uncertainty that naturally derives from large organisational change can trigger fight or flight mode. During this time, employees will encounter a range of emotions from fear to enthusiasm to nostalgia. An emphasis on the elements that go into company culture enables your employees to cut through all the noise (the rumours of layoffs, the ever changing policies and processes, even the changing of desks) and focus on doing their job.
Don’t just mitigate fear, squash it so people can move on
For everyone, this is a time of acute uncertainty. People are working to define their own roles and claim their territory. There is real fear of being made redundant or not being considered for a position because someone “from the other company” will take the spot they deserve.
When people are afraid, they revert to their most basic selves. From a neuroscience perspective, they revert to their tried and well-worn neural pathways. These pathways influence how a person sees the world, how they interact with others, and even how they process messages.
So while effectively communicating is important, if the message is one-note or always delivered in the same manner, it will not resonate with all employees. It could even send the wrong message.
The way people perceive their own actions and the way others interpret those actions usually differs. Using a one-size fits all message can have unintended consequences. When working with clients we use the Intent-Impact model developed by Professor Edith Ng at University of California–Berkeley to create awareness of this gap.
By tailoring your communication during the merger or acquisition process, the intended message is more likely to equal its impact. Leaders will not only mitigate fears, but squash them, allowing people to move on and do their jobs.
Embrace differences and find commonalities
During this time, teams are new and undefined. They are working to establish new ground rules and ways of doing things. They have to figure out what each person brings to the equation. This is a time when differences are heightened, and not always seen as being valuable. Which is exactly what company leaders don’t need – for differences to get in the way of work getting done.
Invest in programming that helps facilitate teambuilding and trust, and creates a common language or shared mind-set that celebrates the wide diversity in how we all think and behave. Chart individual strengths aligned with the company vision and team objectives to highlight how each person contributes to the overall success in a unique way. This will allow every individual to feel connected to the new vision.
We have been a long-time consulting partner with MillerCoors and were a central component when the entity was created by the merging of Miller and Coors brewing companies. Critical to the long-term success of this merger was the implementation of programmes designed to expedite the form, storm, norm, perform process with their teams.
Whether it is through company town halls, moderated group sessions, or employee feedback surveys – take time to help individuals accelerate their understanding and appreciation of their differences. People working in high performance cultures, where they feel able to express themselves openly and differently, will collectively take on transformation more effectively.
Help employees navigate the new lay of the land
When a new company is formed as a result of a merger or acquisition, it will change the day to day work of most people. It could also change the reason people come to work. The reality is, everything is new! From operating models to cultural norms, even the most seasoned, veteran staff are going to need time to acclimate to their new situation before they can perform at their peak.
The job of a leader is to help get them to peak performance again as quickly as possible. The challenge is that everyone handles change differently. The more you know about your people, the better equipped you are to guide them through this process.
Emergenetics research shows that a third of the global population are on the more ‘firm’ and ‘focused ‘end when it comes to flexibility and it will therefore take them more time and energy when change happens. However, if time is spent up front helping them get on board with the change, these employees can actually be the best advocates and can help keep others focused around the new direction of the organisation.
It is important to remember though, even those employees who embrace the unknown and welcome change, are still likely to need some guidance as to the new company norms. It is easy to assume that just because people are on board with a changing situation that they don’t need as much leadership interaction. While it’s true leaders won’t need to do as much to get them on board with the new direction, they’re still learning the ropes just like everyone else.
Organisations that invest in helping people understand the new language, objectives, and ethos, are much more likely to have success. People, after all, are psychologically wary of change, for good evolutionary survival reasons, and leaders need to support them when asking them to undertake such a change.
This is illustrated by our work with Western Union who needed to transform their customer experience across the globe. We worked closely with the business to create an on-line delivery programme that made every front-line person feel valued and confident to use a different language with each client. They did not simply cascade the new service approach through management layers, but invested in every front line person feeling valued and developed.
Mergers and Acquisitions can be a challenging, multi-dimensional process for every organisation. But they also present significant opportunity to build a solid cultural foundation that empowers high performance. Taking the time ensure a complete understanding of the existing and new stakeholders, providing clear guidance and process that is underpinned by definite leadership, will ultimately facilitate ongoing growth across all areas of the new organisation.
About the author: Sinead Devlin is Managing Director of Emergenetics Ireland. Emergenetics uses psychometric research and behavioural studies to advise and consult with businesses and individuals on how to assess human capital. With 20 years of experience in the field of Organisation Development & Leadership, Sinead has worked with leaders and teams in companies such as PayPal and Microsoft.