Company Culture After M&A

Posted Oct 18 2012 by in All, Blog, Company Culture

From Derek Irvine, Recognize This!

Yesterday, I offered a review of the book Building a Magnetic Culture. Nowhere is that more difficult – or more necessary – than in an organization that has just completed a merger or acquisition. One reason this is true is because culture is a constantly moving target, and one that moves faster under stress.

A recent article in HRZone.co.uk pointed out:

“As soon as a merger or acquisition is announced, the culture of both entities begins to change as people start to think about, and behave towards, their immediate environment in a different way.”

That change begins to happen as soon as the M&A is announced. The fear factor kicks in almost immediately (a topic ably addressed in this article speaking to the impact of evolutionary psychology on employees going through M&A).Employees start to worry about their positions, redundancies, changes in reporting structure or responsibilities, and an number of other factors.

One such major concern is the culture of the company. Most people are at least accustomed to the culture they work in if not actively fond of the culture. The fear of how “they” do things in the other group is almost palpable. One client of ours tells the story, after several acquisitions in a short period of time, you could walk into a meeting and see people picking out “one of them, one of us… I’ll sit with the ‘one of us’ person.”

Often the best solution is to work with all employees across the merged organization to create a new culture. The HRZone article goes on to point out:

“Creating a new culture is not about ‘creating a new culture’. It is instead about establishing the right processes and capabilities to lead to a new culture. It starts with forming a senior leadership team that understands this proposition and is prepared to show others what the new organisation is really going to be about.”

Often this requires respecting the cultural mores of both organizations. A wise approach can be to begin again with defining the core values of the merged organization, re-establish the strategic objectives, and then clearly communicate those changes to all employees. A baseline requirement – involving people from multiple functional areas and levels and definitely both organizations. As HRZone reiterated:

“By involving staff from all areas of the new entity as well as all of the former brands from each country, employees quickly began to see how the newly-integrated organisation would really work. They were also provided with some real evidence to this end and as back up to an extensive and professional communications programme.”

A final point to make this real is to use positive reinforcement via strategic employee recognition to bring those new core values and strategic objectives to life within the daily work of all employees. I’ve briefly outlined 5 steps to do so in this post.

Have you gone through a merger or acquisition? What was the impact on the culture in your organization? Did one entity dominate and force their culture onto the other, or do a truly new culture emerge?