You’ve decided to merge with another organization. Now what?
In the first part of this blog series (go ahead and read that here if you haven’t already!), I talked about the discovery questions I recommend for organizations as they’re vetting a potential merger or acquisition.
The discovery process can feel long and tedious. It’s no wonder that after a purchase agreement is signed many executives feel like the heavy lifting is behind them.
Actually, the easy part is behind you. The real work is about to begin.
In part two of this series, I discuss four important aspects of that work that are critical for being proactive, transparent, and keeping the people part of these activities at the center of your actions:
Recognize what matters to both companies, and work together to create the best path forward
Through this process, remain impartial. One culture is not “better” or “worse” than the other. Instead, think of it like this: what is the best of each individual culture that you might want to bring to the shared culture?
Maybe the company you’re acquiring has a better PTO policy, or fully vests employees in their 401K plans a year sooner than you do. Is there a way to meet in the middle, or create a grandfather policy, so that those employees don’t miss out on their benefits, and your organization’s employees get an unexpected perk? Maybe the organization is smaller than yours, and the reporting structure and processes to approve budgets are flatter. How will it be for employees that need to be part of a larger team than before?
Assemble people from both organizations to review and recommend solutions for differences in benefits, policies, and processes. Consider creating an Impact Analysis and Resolution & Response Plan, where you analyze the gap between each firm’s policies and procedures for things like performance evaluations, bonus payouts, benefit expenses, and more.
Be as clear as you can, as soon as you can (and if you don’t know, say so)
Have you heard the phrase “anticipatory anxiety?” It’s the fear or worry that bad things could happen in the future — things that we can’t control or predict. That’s what it’s like for an employee to know a merger or acquisition will happen. This anxiety gets worse when people hear vague or inconsistent messaging from their leaders — or they don’t hear anything at all.
And we know what happens next. Employees from both companies start to fill in the blanks with rumors and incorrect information—which leads to confusion, mistruths, a fair amount of work churn, and an “us” vs. “them” mentality.
That’s why it’s important for leaders from both companies to be very clear about the “why” of the merger or acquisition—what it means for the company and your employees. Then, you have to walk the walk by being as honest and transparent as possible. Provide as much of a roadmap as you can, always making sure to tie your actions back to that “why” and the needs of your employees.
Help your managers and supervisors be prepared for what's coming
Not only do you have to be transparent about the reason for the merger or acquisition, but you also have to make sure you continue to provide that clarity throughout the leadership of the organization.
Make sure your supervisors are equipped with talking points and an expansive FAQ document that answers most of the conceivable questions employees will have about what’s happening. Go over the materials in detail through a listening session after getting them the initial information, allowing your managers time to process the information and a forum for asking questions.
After the announcement, give employees of the combined company a place or process to ask their own questions—a Town Hall, for instance, or a series of all-hands meetings. After those meetings, be sure to have a mechanism in place for additional questions, such as a specific email address where questions get monitored, fielded, and answered in short order.
Embed staff from one company into the other
When the merger or acquisition has been completed, make it a priority that staff can get to know each other as soon as possible. This might look different based on how your company works (100% remote, 100% on-site, or a hybrid), but don’t let those challenges keep you from integrating staff—and have them work on shared projects together—as soon as you’re able.
For example, when my company went through the merger I referenced, they relocated one of the firm’s partners to our office. He worked on-site alongside us, and it was singlehandedly the best action the company could have taken to proactively address the “us” vs. “them” issue. We had a face to associate with the new company, which made it instantly more comfortable.
People—and culture—can be the difference in successful M&A activities
People are one of the most important assets of an organization. When people and culture are overlooked, performance sags, retention suffers, and the conflict can derail the success you hoped for by bringing the two organizations together in the first place.
If you’re just getting started with your own M&A activities and want to be proactive with your people strategy—or you’re looking to strengthen this part of your due diligence, I’d love to chat. Book a call with me here.
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