CEO of Anteriad, a leading provider of B2B marketing solutions. Data-Driven. Tech-Enabled. Growth-Obsessed.
On paper, the best companies to acquire don’t just have complementary products and a great client roster—they also have highly qualified, loyal employees. But, what’s good on paper can actually make for a somewhat challenging integration post-acquisition.
Employees from a newly acquired company who are fiercely loyal may resist the inevitable changes that come with M&A. They might want their team to remain intact, cling to processes specific to their old organization or simply love the old company culture. I find that, too often, the acquiring company ignores these softer elements of integration, which can create higher turnover and lower productivity.
After an acquisition, many leaders focus on what they can see and measure—namely product integration and development and client retention and upsell—leaving employee conversations to line managers or monthly town hall meetings. But when the cultural elements of integration are deprioritized, not only do employees feel it, but the side effects can drag down progress toward product goals and client growth.
A Better Way To Integrate Teams With Different Cultures
In my experience, a successful acquisition accounts for different cultures between two companies. Especially when a newly acquired company has a strong culture and loyal employees, executives need to create a clear transition plan that gives the newly acquired teams time and room to see a path to success in their new situation.
1. Treat it like a partnership.
Several years ago, Harvard published findings that showed how successful integrations often start out as separate entities. My company’s recent acquisition follows this approach and proves that this insight is still relevant today. The marketing agency we acquired has a strong culture and loyal team, with most of their staff in Europe and outside the U.S. Allowing the company to operate independently for a time gives us the ability to create an integration strategy when and how we want to down the line.
2. Communicate (and listen) positively but realistically.
My experience after a number of acquisitions is that direct communication makes a big difference. I share the vision for our future, but I also ask questions about what made their company successful and where they may have been held back. I provide the roadmap to show where we want to go, but I also ask about their own processes. By being clear, but also asking for feedback, people know what to expect and also feel heard. They can see that if they have good ideas or do something well they will be an important part of the combined team.
3. Take culture seriously.
McKinsey notes that companies often devote too few resources to integrating teams and cultures. What’s more, PWC finds less than half of companies surveyed note that culture is an element of their change management program. It is every executive’s job to understand the core cultural elements that matter to employees, especially high-performance employees, and keep these elements in mind when starting an integration.
Leaders tend to have rose-colored glasses and assume cultures will mesh because they share similar values, but it goes deeper than that. Sometimes it’s as small as weekly get-togethers or how team meetings are run. In other cases, it could be how people are paid or the vision and strategy of leadership. When leaders take time to know what matters, they have what they need to decide if and how they preserve these elements going forward.
4. Look for fault lines.
Putting in the early work to identify what matters is a good start, but culture is an ongoing management responsibility. After leaders identify what matters, it can be valuable to have a set of priorities that can help resolve issues going forward. Bain notes that culture can be a problem when leaders don’t accurately identify what is causing issues between the two different groups. It could be different ways of working, different values or decision making. What’s most important is that companies identify any fault lines quickly and address them head-on before they grow.
Develop A New Culture With Confidence
Through my company’s different acquisitions, we have evolved our culture, collecting successful elements from the other companies we have acquired while preserving what makes our company unique.
I have found that the high performers, particularly rising leaders at the director and VP levels, are incredible resources for helping create the new, combined culture. Often, they are involved, loyal and love to be elevated and included.
By ensuring they are on board with things like your vision and mission, team meetings, get-togethers and managerial approaches, you set a positive direction for newly combined organizations. They can also serve as effective communicators between executive leadership and the rest of the organization.
On top of this, having a culture that prioritizes your own people just as much as you prioritize your customers is often enough to help two different cultures meld more easily. It’s not easy, but the extra focus on an inclusive, positive work environment can smooth the way for different teams to focus on common goals and create a new, combined work culture that’s even better than what came before it.
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