Consider cultural fit during mergers and acquisitions

August 30, 2016|Amy Biersteker

When it’s time for a substantial change to your company, such as a merger or acquisition, there are countless factors that must be scrutinized. The trap many organizations fall into is concentrating on the financial aspects of the deal while ignoring the softer people considerations. For a smooth cultural transition, the two should work in concert.

Take steps to properly align the two distinct cultures up front and then be proactive and transparent. By communicating appropriately, you can help ensure both company owners and employees are comfortable with the impending changes.

The longest journey starts with a single step

Get a clear understanding of the other company’s beliefs and values and how they live by them. After the transition, will those values remain the same or will they change? The more these are aligned, the better your chances that the cultures can assimilate seamlessly.

To properly gauge these characteristics, use a formalized process to evaluate and determine where there may be cultural differences—and similarities—between your companies. An HR assessment or culture audit is helpful in strategically addressing areas of concern. The assessment process looks at key factors, including:

  • Employee benefit plans (including welfare plans)
  • Your commitments to retirees
  • Non-compete agreements
  • Employee relations
  • Organization chart and structure
  • Unemployment compensation
  • Compliance issues and other areas.

Understanding where there are differences allows you to address any changes that must be made up front so they don’t delay or derail your transaction down the line.

Structuring your future vision

Once you’re armed with assessment data, the real work begins. If your practices are significantly different, aim to make them more like the better of the two. Use this information to help determine how the future entity will look in terms of operations, reporting structure and more:

  • What’s the structure of the existing entities and how will they come together or complement one another?
  • Will there be duplication of roles?
  • What will the new job demands be?
  • How will you handle compensation and benefits?

Set realistic expectations for what the future may look like. A merger may also lead to positive change. There may be more opportunities for employees’ professional development, career growth and perhaps even a raise.

Communicate, communicate… and then communicate some more

Communication is essential at every stage of the acquisition. Realize that this can feel like a threatening time for employees, full of many unknowns. When communication is lacking, rumors often fill the void, which can fuel fear and negative emotion. Communicate frequently and use a number of channels, from emails and meetings to printed pieces and video. Employees will feel more respected as a result.

Make every attempt to inform all employees at the same time so that the word doesn’t travel through the grapevine and get misconstrued.

  • Share timelines
  • Provide as much as you can in the way of the organizations goals, mission and management style
  • Discuss work schedules, training and performance evaluations
  • If downsizing is a potential reality, demonstrate compassion and don’t prolong that process

Show transparency by acknowledging that you may not have all of the answers right away. Let employees know you will share updates with them as soon as you can (rather than guessing and providing information that later proves to be incorrect).

Create a formal communication process and identify a contact person with whom employees can connect, ask questions or express concern. Most important, provide positive feedback or reassurance during what will certainly be a trying time for many.

It doesn’t stop once the papers are signed

After the acquisition, there can be a noticeable divide between the two camps. Organizational differences can lead to competition. Your goal is to establish a common culture and foster feelings of “one group.”

To create a cohesive team, consider mixing old employees with the new when developing the organizational structure. Define clear lines of authority so employees have direct access to leadership. Those placed in new leadership positions truly serve as representation of the new culture and must be able to model and demonstrate appropriate behavior.

Considering the cultural aspects of this transition early in the process can only help ensure success in your transition. Manage the people issues appropriately and effectively to positively contribute to the productivity and growth of the new entity.

Schenck’s HR Consulting team has the expertise to guide you through this process. Contact Amy Biersteker at 920-996-1350 or to learn more.

Amy Biersteker, CEPA, MSE, has more than 20 years of experience working with organizations to develop leaders and their teams. She provides strategic business advice to clients on a variety of issues, including recruitment, organizational development, process improvement and leadership development.