6 Tips to Strengthen Culture During M&A
Why culture matters during M&A
There’s no question that the economic landscape is still touch and go. But that doesn’t mean merger and acquisition (M&A) activity is slowing down. According to PwC, 60% of global CEOs are not planning to delay M&A deals in 2023.
“Provided companies have well-thought-out strategies and access to capital (and in some cases the courage) to make transformational deals – deals that will shape their business and contribute to their longer-term success – the current market can provide an opportune moment for M&A plays,” says Brian Levy, global deals industries leader, partner, PwC US.
One of the biggest contributors to that “well-thought-out” strategy Brian refers to is all about the human side of mergers and acquisitions. After all, between 70 and 90% of M&A deals fail because people and culture are not prioritized during the integration process.
Tips to strengthen culture during M&A
If you’re going through an M&A right now or planning to in the near future, how can you strengthen culture during this time of transition? That was the topic of a recent webinar Enboarder hosted with Rene Barreda, chief people officer at Mitratech, and George Boone, senior manager of talent management at Mitratech.
Having gone through eight acquisitions in the past 18 months, Mitratech’s team has grown more than threefold in that time. In the webinar, Rene and George share how Mitratech has found success in these integrations, and tips you can apply during your M&A transition.
Understand the human element pre-acquisition.
Pre-acquisition, you’ll have access to all kinds of company information. “But it’s all static information. There’s no human element associated with it,” says Rene. So in addition to the usual due diligence, part of Mitratech’s M&A process involves engaging with the company being acquired to understand who the top performers and influencers are in the organization.
Be as transparent as possible on what will happen on day one.
Clear communication is absolutely essential to a successful M&A. And that means on the day of the M&A, being very clear with affected individuals what the change will be to their job (if any) and any financial implications that may bring. Not being clear about impending changes can cause “a mass exodus because of confusion and lack of knowing,” says Rene. “It doesn’t need to be a popular message; it just has to be a clear one. And that has helped us with our integration.”
Be on the front lines to answer questions.
Like Mitratech, you should have an acquisition team that meets regularly to discuss tech, systems, and HR integration. George notes that one of the most common questions you’ll receive from employees is how the M&A will affect pay. So you’ll need a well thought-out communication and change management plan and clear channels for employees to ask questions.
“Every single employee is communicated with on day one and then we have breakout sessions by function, whether it be engineering, sales, marketing, etc,” says Rene. “We host weekly calls on what occurred in the last week and what will be occurring in the next week … We do this every week for 120 days.”
Double down on inclusion.
This is less about tactical DE&I programs, and more about diversity of thought. “The only two things we ask people to check at the door is ego and politics. And by politics I mean organizational politics. Everyone contributes,” says Rene. The more you can lean into candor and transparency through the course of the M&A, the better your culture and your business will fare in the long term.
When it comes to communication, think baby steps instead of leaps.
You can’t expect people to change on a dime without taking time to process new information. “I’ve been at companies where it was like week one, full assimilation. It’s overwhelming … We’re trying to do a slow release of information because we don’t want to overwhelm people,” says George.
Balance extreme ownership with trust.
Part of Mitratech’s culture is a “bias for action … we call it extreme ownership,” says Rene. “Your place in the organizational chart does not determine your influence on the business.” So as much as you can, encourage employees to share their feedback and take action when they see an opportunity to improve or create efficiency during the transition. At the same time, you need to build trust between people and teams, “finding that commonality, bridging that gap,” says George. Your employees will be able to draw on that well of connection as you move forward beyond the M&A.
Communicate change with Enboarder.
Now that you have an idea of some of the ways you can strengthen culture during M&A, you might be wondering how to operationalize these tactics. Afterall, you could be bringing on hundreds or even thousands of new employees to your organization.
In this post, we walk you through the Enboarder Engagement Model and how you can use things like nudges, connection, ease, and engagement to reduce the fear and uncertainty that often accompanies an M&A. We’ve worked with hundreds of companies like yours going through this process and have a proven playbook that works.