One of the most challenging aspects of combining two companies, business units, or teams is the people side of the integration. Everything can look positive and promising for a merger or integration on paper—the financials, strategies, and opportunities can all align perfectly—but if the two cultures involved don’t integrate well, the merger will struggle or fail.
To vastly improve your chances of a successful merger or integration, pay careful attention to the people side of integration with these four guidelines.
4 Guidelines for the People Side of an Acquisition
1. Respect Both Cultures
Whether you are combining two small teams or acquiring an entire company, you’ll need to understand that both sides of the merger already have a distinct culture. Even when two cultures are similar, they’ll likely skew differently in one, or more, of the Eight Dimensions of Culture. One side may be more oriented toward individual contributions, while the other may be more team-oriented. Neither of these approaches is wrong, but ignoring the differences can lead to misunderstandings or conflict.
A cultural assessment can help both sides evaluate where each one needs to shift (and how far) to create a new cohesive team, These shifts require time, patience, and practice. Don’t look to completely assimilate the acquired culture; rather, use the strengths of both sides to achieve cultural alignment and pursue strategic goals.
2. Be Intentional About Change Management
After all of the rapid change over the past few years, employees at all levels report increased levels of burnout, stress, and change exhaustion. The last thing employees want to hear is that their work arrangements will be changing—again!
Everyone handles change at a different pace, and not everyone will be excited about merging. Employees may be understandably anxious about what a merger will mean for their positions and roles.
Approach any integration with an eye toward helping people understand the processes, purpose, and goals of the integration. Use a change strategy that communicates a vision, prioritizes those most impacted by the integration, and measures and celebrates results. Be sure to use change management techniques such as the SARA Curve and hallway conversations to help employees process change at their own pace.
3. Approach From a “Give” Perspective
Organizations that only think about what they can acquire from the smaller side of the merger are setting the integration up for failure. In several famous M&A failures, the acquiring company focused mostly on what it could get from the other side. In these “take-based” acquisitions, the acquiring organization thought only about what the acquisition could bring to the larger organization—not what it could do to boost the competitive advantage of the smaller organization.
In the same way, an approach that bolsters the advantages of the people on the other side of an acquisition can vastly improve outcomes in the long run. For example, if key employees within the acquisition side are strong candidates for leadership in the future, consider giving them stretch assignments within the acquisition process, or put them on project teams with key leaders from the acquiring organization. Or, if the acquisition has a promising employee affinity program that could potentially be expanded, can the acquiring company provide it with funds or senior leader buy-in? How can you boost the people advantages of the company being acquired to help both sides of the integration?
4. Stay Humble
Some of the biggest merger failures in history were caused, in part, by a lack of attention to cultural integration. Leaders who walk into an integration assuming they know everything about the other company, its products and services, and especially its people are setting themselves up for a rough transition at best, and failure at worst.
Leaders from the acquiring company should stay open to new information. Ask lots of questions, use assessments, and, most importantly, listen. Don’t assume anything. You probably don’t know everything about how the acquisition company became something attractive enough to purchase, and it’s very likely that you have no idea how acquisition employees feel about their new bosses. Time spent listening and engaging in conversation is not wasted; in fact, this kind of leadership humility could be the key to successful integration.
Mergers and acquisitions are always about more than numbers, products, or competitive advantage. By spending time focused on the people side of the integration, leaders on both sides can radically increase the chances of successful integration and set up strong, cohesive teams who are prepared to deliver business results.
SELF CHECK:
- Do I know where my own team/organization is on each of the Eight Dimensions of Culture?
- What is one way I could advocate better for my team during an integration?
- What is one way I could be more humble about our next integration opportunity?
