Cultural Integration with M&A’s

How to Successfully Approach Culture During Mergers or Acquisitions

The business of merging or acquiring a company creates significant people challenges. This is notably true for the many employees that don’t have a seat at the table during these game-changing decisions. Mergers and acquisitions usually cause big changes to the status quo. And, let’s face it, humans don’t always like change.

During the early stages of a merger or an acquisition, employees experience a lot of uncertainty over what their new workplace is going to be like, and what their role will look like in the new structure. This anxiety can create chaos and potentially damage the success of the business.

Whether your company is merging with another or gaining new leadership through an acquisition, CEOs and executives are responsible for calming employee anxiety during this seemingly unstable transition period. How do you do that? Well, mergers and acquisitions are two different beasts and should, therefore, be approached differently. But either way, establishing a clear culture and value system that people can jump on board with is absolutely essential. Keep reading to find out why cultural integration is the key to successful mergers or acquisitions.

Mergers –

A merger, or the process of combining two separate companies, is scary to employees, mostly because they’re accustomed to the way things have operated and are unsure of where their place in the new, larger company will be. Think of it this way– Imagine your family moving into a new home alongside another family. Will the rules be the same? Will you still have your own room? Living with another family would feel unnatural, right? Employees feel similarly about their work home being restructured to make room for new people and processes.

But it doesn’t have to be that way. People are scared of the unknown, so be sure employees understand how the two companies will integrate and what their role will be within the newly formed culture. This will ensure employees are prepared to deal with new teammates, managers, and daily operations.

Think that any two companies in the same industry can merge? Think again. Before a merger, executives need to first perform due diligence to ensure their two separate cultures will form a complementary dynamic. Finding common values and defining a culture that both sets of employees can get behind will guarantee the new company has a clear path and can efficiently move forward, instead of wasting time trying to figure out how to work together.

Don’t get us wrong, there will be some employee turnover in every merger. That’s natural. Not every employee will align with the newly integrated culture. If you properly educate employees and clearly define a synergistic culture, people that don’t fit will be easy to spot, and the team members who truly belong will feel at home right from the beginning.

Ignoring culture during a merger is detrimental because you run the risk of the two companies clashing, frustrating the majority of employees to the point where their productivity levels are severely lowered, or worse, they quit. Avoid your employees going through culture shock, and take the time to properly educate them on their new workplace environment. Do this as if the success of the merger depends on it, because it does!

Acquisitions –

The process of being acquired can be equally confusing and stressful for employees. Though they won’t’ have to deal with being combined with another organization, they will have to come to terms with adjusting to new owners and, possibly, new office managers.

Often times, a company is acquired because it already possesses a strong company culture, a market-leading product or service, and great people. These same great employees love the current culture and unique energy of their workplace, so an acquisition can, understandably, cause them to worry that the acquiring company will change everything.

To make the acquisition as smooth and successful as possible, new owners should clearly and widely communicate ideas for the future of the company.

Putting everything on the table up front will create value and help employees be more comfortable during the transition. If employees aren’t aware of the new owners’ values, or feel they won’t align with them, they will be tempted to work somewhere else.

We get it, there are a lot of factors involved with making mergers and acquisitions a success, but integrating and defining culture and a core value system is the most important way to ensure morale, employee retention, and productivity levels remain high during these times of change. While the approaches to mergers and acquisitions are different, both depend upon understanding the importance of cultural integration and communicating with employees.

Don’t know where to start? SoCap Agency, a full-service Denver marketing agency, has a team of corporate culture experts to guide and mentor you through the tricky process of integrating culture during a merger or acquisition.

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