Making the Most of Acquisitions: Embedding Post-M&A Company Culture – Crunchbase News

By Margaret Graziano

It is widely believed that about half of American marriages now end in divorce. (In fact, the divorce rate has dropped in recent years.) What is less well known is that, as with marriage, a roughly similar proportion of corporate mergers and acquisitions – 40% – also fail. to meet the hopes of those who participate in it.

What is the reason for the uncertain prospects for the success of mergers and acquisitions? In a nutshell: it’s placing your trust in hope instead of doing your homework.

In my experience, few companies do mergers and acquisitions well. Too many of them don’t have a proactive workforce integration plan. Once they come to an agreement, they step on the gas and race ahead.

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A much better approach is to do your homework before jumping in. Preparation allows a company to start with a message from the CEO (written or recorded) and an interview with the new group: this is our vision, this is who we are. Here’s why we bought you and want you to join our mission.

Transition tools

Then deploy other transition tools.

Here’s one: create a guide to the values ​​and culture of the acquiring company, for example, how we navigate day-to-day life, how we expect work to be done, how we interact with co-workers and clients. What do we encourage and celebrate?

Here’s another: a cross-functional integration team that works with the company being acquired so its employees can learn how the acquiring organization does its job, who does what, who is responsible for what, and where we’re going. from there. The team is made up of people from different departments in both organizations who don’t normally work together every day. Within this team, they collaborate in the smooth running of the integration by familiarizing the new recruits with the culture and the way of functioning of the acquiring company. They also promote teamwork.

Another useful tool: regular meetings with key people: the heads of human resources, strategy and each main department. This helps employees know what to expect.

And these last five tools:

  • Corporate mission and strategy statements.
  • A “what it’s like to work here” video.
  • A training program that helps people understand how to lead in the new organization and how to integrate desired behaviors into daily work.
  • Quarterly integration days, particularly useful for people working remotely.
  • Following the Word – the greatest tool of all, as it demonstrates that we actually live by our stated values.

The point of all of this is to actively integrate new team members into the organization, rather than just hoping that they will somehow fit in, as if by osmosis.

The experience taught me a few more things about the approach to integrating two previously separate workforces, beyond that, that is, the value of solid planning and preparation.

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Verification

First, when onboarding a new group of people, it is essential to consider them individually. It’s not just about determining who is appropriate for a given job, but even more importantly seeing who is appropriate for a healthy and successful culture.

We don’t just lay bricks. We build something we believe in. We are building a cathedral. The ability to get the job done and further the mission of the organization is essential. Assessments can be a useful tool in this regard.

If the acquired company is one in which a toxic, destructive, aggressive and defensive culture prevailed – where it was “my way or the highway” and where employees had to avoid, comply and always ask permission – the audit can determine if acquired employees are ready to participate in a very functional and constructive team dynamic or if they prefer to continue operating as before.

Margaret Graziano, CEO of KeenAlignment

Acquiring companies should not seek to “know it all”, but to “learn it all”, i.e. people with the open minds of a beginner.

I’ve found that even though companies want to acquire an entire team, sometimes they end up keeping just a few people and dropping those they later determine aren’t a fit.

Sometimes an acquisition leads to a situation where the intellectual property sought resides in the heads of employees that don’t fit the new culture. Then, rather than keeping them for the long haul, organize to buy their knowledge, paying them an incentive to let their colleagues know and saying goodbye with a nice bonus once the knowledge is transferred.

Keep in mind basic human needs

If you don’t understand the basic human needs (certainty, challenge, connection, and importance) of the employees you onboard, you won’t be very effective at retaining the talent you’ve just invested in through acquisition.

  • Everyone needs some degree of certainty, for example, “I’ll get paid on Friday.”
  • People need different degrees of challenge – to feel stretched. They get exhausted by doing the same task over and over again.
  • They need connection, at least some face to face. The lack of human connection during COVID has increased levels of depression, anxiety, alcoholism and domestic violence.
  • Finally, people need importance. They need to know that they are part of something bigger than themselves, that they are building a cathedral, not just laying bricks.

These, in a nutshell, are some basics to keep in mind when considering a merger or acquisition. The bottom line boils down to this: “Hope,” like hoping that success will follow by diving forward, is a four-letter word. “Prepare” and “veterinarian” are not.


Margaret Graziano is the Founder and CEO of KeenAlignment, a collaborative group of management consulting professionals committed to transforming organizations into high-performing workplaces through personalized training and coaching programs.

Illustration: Dom Guzman

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