I was first affected by a merger 20 years ago when the accounting firm I worked for at the time merged with a much larger accounting firm. The experience—and what I learned from it—is a big reason why I’m still passionate about the people side of change/change management today.
The merger between the two companies was incredibly complex. And, in my role as Firm Administrator, I was working hand-in-hand with the Executive Committee, doing everything from converting materials to our new name and logo, working through the intricacies of aligning benefit plans, and performing a gap analysis on the difference in our processes.
As the new firm’s leadership continued to scout for future acquisitions, I was charged with taking the learnings from our first merger and putting it into an operational guide, which became the company’s Merger & Acquisition Toolkit.
I’ll be honest: several years and a change management certification later, I know there could have been so much more to that toolkit—especially when it comes to the people integration and culture side of merger and acquisition (M&A) strategies. But for 2003, I maintain it still had more than some firms have today!
I’ve noticed that many companies tend to wave off questions about their people integration, saying they’ve “got it covered” or that employees “won’t care, because they’ll still have jobs.” Then, the merger or acquisition gets announced, the two cultures come together, and things are bumpy at best, and downright impossible at worst. They didn’t have it covered, after all.
Today, one of the biggest benefits of M&A is the acquisition of talent, but M&A activities can be fraught events for both sets of employees. The operating model and culture may change dramatically for one—if not both—of the companies involved, and that uncertainty can create plenty of anxiety about roles, responsibilities, and the future. And, when employees chose to work at ABC company—not XYZ company—you essentially need to be prepared to “recruit” this talent all over again.
As a change management consultant, I have a feeling you’d prefer to retain the majority of your staff rather than deal with 50% turnover. In this two-part series, I’ll go through a few of the tips that I encourage my clients to consider as they’re working through their M&A culture and people strategies:
Discovery is your opportunity to listen, ask questions, and research to get a sense of both cultures
Blending teams requires thoughtful and intentional legwork. And, that starts by asking questions. Here are a few of my favorites to ask leadership:
When was the last time you acted on an idea from someone on your team?
What is the process for an employee to install a new piece of software not used by the company? This may seem like an out-of-left-field question, but it helps to understand the working policies and procedures for both companies.
What’s the biggest mistake someone made at work, and how was it handled?
How are decisions made within your organization? You might ask about a few examples, such as changes to the benefits program, or how the companies work through annual budget planning and approval.
What is the preferred method of communication at your organization—both at the company-wide and department level?
How does your organization encourage staff participation in community or volunteer activities?
How much did your organization donate last year, and what types of organizations do you support with those donations?
What social events do you host throughout the year?
What’s the attitude toward employee empowerment and work-life balance? What about hybrid or remote work?
And of course, you’ll also want to do some research on your own. Check the Glassdoor reviews of the company you’re acquiring or merging with, and note what themes come up. Ask to see their exit interviews from the last six months or the past few years of employee engagement data.
Frustration can easily emerge when the cultural norms and practices of the two merged companies don’t line up, and this research and listening ensures you have an opportunity to temper those frustrations.
For the second part of this blog series, we’ll walk through tips for after you’ve decided to merge. Can’t wait, and want to chat more? Feel free to book an intro call!
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