Managing Culture Through a Merger or Acquisition

Culture During Mergers and Acquisitions

How do you maintain company culture through a merger and acquisition? Do you blend two cultures, or adopt one?

The merging or consolidation of companies leads to significant organizational change. One of the biggest changes can be to company culture. Maintaining a strong culture as two organizations become one is crucial. This Deloitte study says that ‘culture has emerged as one of the dominant barriers to effective integrations’ and that culture has been found to be the cause of 30% of failed integrations.

CultureIQ culture strategist Rea Abrahams recently tackled the topic during a ‘fireside chat’ with a panel of trusted culture experts. Read on for our recap of the conversation and their advice for managing culture through a merger or acquisition situation.

But First, Some Context

We held this ‘fireside chat’ in a recent webinar, where our panel answered the culture questions our attendees had submitted — we had over 200 to sift through!

You can watch the hour-long webinar here. We also discussed how to scale culture as you scale your company, how to motivate leaders to embody culture, and 2018 culture trends we’re looking out for.

Our panel of culture experts included:

Chris Williams

Managing Director at Root, Inc, a creative consultancy helping organizations face strategic change, onboarding, and culture transformation.

Brandon Smith

A speaker, writer, executive coach, and professor focused on eliminating workplace dysfunction. Brandon writes about culture and workplace health on this blog, The Workplace Therapist.

Tania Luna

A partner at LifeLabs, which specializes in trainings for companies going through rapid growth. Tania is also the author of ‘Surprise: Embrace the Unpredictable & Engineer the Unexpected.’

Robin Zander

A consultant, event organizer, and cafe owner working with individuals and organizations to maximize their potential. Robin is also the author of ‘Responsive: What it Takes to Create a Thriving Organization.’

 

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How to Manage Company Culture Through Mergers and Acquisitions

Chris

First, ask yourself if you need to integrate your two cultures. Sometimes it’s ok to have two distinct cultures — especially if the acquired company will largely retain its brand and its autonomy.

If you do need to integrate two cultures, here are some tips.

  1. Decide every detail of your culture, so nothing is ambiguous. How will you hold meetings? Empower people? Make decisions? Find out what the existing cultural differences are across every detail. Gather leadership and clearly define what each new detail looks like moving forward.
  2. Don’t mandate culture. You can’t just tell people to act differently one day. You have to create experiences and lead by example. Create opportunities for employees to discover for themselves how to act in this new environment.
  3. Make everyone feel heard. There will always be a ‘winner’ or more dominant culture and a ‘loser’ or party that feels miffed in these situations. There will be gossip, discussion, rumors, truths that circulate. You can’t escape it. But you do have an opportunity to direct the conversation. Create the environment that allows people to ask questions, share concerns, and show that leadership is listening. Even if you can’t make everyone happy, you’re showing that everyone is heard. It goes a long way.

Brandon

Mergers and acquisitions provide opportunities for companies to take a step back and ensure their culture is the right one. Company leaders should ask themselves: What is the purpose of this organization? How does our culture help us move forward?

Tanya

Successful change is usually what I call CAMPS:

    • Certainty: Create outlets for people to seek certainty during a period of change. Hold a leadership Q&A session. Schedule regular 1:1 meetings with your team.
    • Autonomy: When change occurs, people can feel like they’re losing something: their independence, their control, or their power. Reassure employees by showing your trust in them and affirming how they can contribute to your new culture.
    • Meaning: Unite employees behind a story. Share why you merged, what you’re hoping to achieve.
    • Progress: Set up an early, visible win. Employees should see that the change has a positive effect.
    • Social Inclusion: Don’t make ‘new’ employees feel left out or ‘existing’ employees feel under-appreciated. Create opportunities for all team members, new and old, to gather and get to know one another.

Rea

Measure your progress as you go! Change is emotional, but a regular cadence of surveys helps you tap into the emotional state of employees — and see how that state changes over time.

With the CultureIQ platform, for instance, you can send regular employee surveys to understand employee sentiment as it evolves. You can also send pulse surveys to dig deeper into a specific topic.

 

 

Ready to watch the webinar? Check it out here.

Have company culture tips to share? Continue the conversation on Twitter using #culturetips!

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