In 2021, the business world saw an unprecedented surge in merger and acquisition (M&A) activity. The Accenture blog post, “Take these four actions to help prepare your workforce for hypergrowth,” offers the following reasons why:
First, companies had the financial means to make a deal happen. Second, they needed to readjust business models for a post-pandemic world.
The post also tells us that the most acquisitive companies, whom they call “serial dealmakers,” are the organizations that typically find the most success.
Serial dealmakers on average outperform less frequent acquirers in weighted total shareholder return (TSR) by 129% in North America, 75% in Europe and 91% in Asia Pacific.
This data proves that M&A is a smart business approach. But what the data doesn’t address is the people affected the most – the employees. To this point, the Accenture post reminds us, “The success of serial dealmakers depends on how well their workforces can absorb and integrate new employees.”
When it comes to the M&A process, employees are typically less excited than the leaders behind the deal. After all, with change comes the unknown, and the unknown can be scary. Employees are often worried they might get a new manager, be moved to a new team, or worse, be let go altogether.
Three Things Leaders Should Avoid
To ensure an amazing deal doesn’t negatively affect employee morale and engagement, which is a common and existing issue that organizations already battle internally, here are three things leaders must keep in mind:
- Don’t underestimate the impact of culture on financials.
- Don’t forget to factor in the feeling of loss for the old way of life.
- Don’t undervalue the role culture plays in managing the overall integration process.
Five Things Leaders Should Do
Knowing what not to do is critical, but the work doesn’t end there. It’s important for leaders to take action to ensure the carefully strategized deal is able to flourish and thrive – and that requires employee support. The best leaders will realize this is a time when they must focus on the people, not the bottom line. Without commitment from new and existing employees, the time, energy, and financials spent on the deal could be for nothing. Successful M&As emerge when leaders can do these five things:
- Build Trust: If employees don’t trust the leadership, they won’t support the changes and are not likely to stick around for long. They’re probably leveraging quiet quitting tactics and biding their time until they can join the Great Resignation. Don’t let this happen. Instead, be honest about the M&A and share details about how these changes will benefit both the individuals within the organization and the business as a whole. If people believe their leaders have their backs, they will show up for them in return.
- Master Conflict: There will always be disparities and a need to reconcile differences when bringing two organizations together – it’s inevitable! To help ease tensions, leaders should proactively recognize when there may be conflicts existing culture characteristics and adjust processes or systems to help ease any potential tensions.
- Achieve Commitment: Creating a consensus or avoiding disagreements doesn’t drive success. Great teams put the most critical issues “in the ring” and battle until they achieve clarity and commitment. Once everyone is on the same page, forward movement is possible.
- Embrace Accountability: Leaders should come to work with the belief that people willfollow through, that they will come up with creative solutions to challenges. Leaders must do this by working alongside their people, letting them know mistakes are simply part of the process, and supporting them along the way – no one is left to falter and fail alone.
- Own the Whole: When managers focus only on the results of their function – which is the opposite of teamwork – it’s a challenge for any organization. Frontline workers, programmers, R&D team members, mid-level managers, the C-suite, and beyond all need to be working with a common vision and shared goal. Without this mindset, each group is focused on its own goal, and everyone quickly feels as if they’re part of the wild west.
Prioritize Internal Culture If You Want to Grow
Culture must be at the forefront of leaders’ minds before, during, and after an M&A. If a big change is part of your organization’s future, have you considered what this means for your people and your culture?
If your employees, including those who might join in the near future, aren’t the number one priority, then it’s time to start developing a plan that prioritizes culture and the employee experience. Because without committed, passionate, and engaged workers, an organization’s path to success is sure to be a bumpy one.