Last year, global M&A activity reached an all-time high of $5.9 trillion, smashing the previous record set in 2017. That means today, there are more companies than ever faced with the thorny and complex challenges of integration.
For over 30 years, Root has helped organizations and their people navigate change and transformation by taking a disruptive approach to liberating and activating strategy. With global M&A activity on fire and the war for talent getting more and more competitive, it’s no surprise that Root is often called on to help ensure that an acquired company’s people are integrated into their new home as smoothly as possible.
In 2021, joining the tidal wave of dealmaking, Root was acquired by Accenture. In the months leading up to the “switchover” – the day we were officially recognized as Accenture employees – we talked a lot about what was changing: why it was good or challenging or scary or exciting. Most of it was speculation simply because nobody had all the answers to our questions, and that was OK. It’s hard to put into words what it feels like when you log off for the day as a group of 130 teammates with a clear vision of the role you play for your clients and each other, and log in the next day with 600,000 new colleagues serving more than 120 countries worldwide. Overnight, our company had grown to be larger than the total population of Detroit.
So, what do you do when a company known for its disruptive integration strategies is acquired by the world’s most acquisitive company? You take notes.
It’s been seven months since the switchover, and every day is a new learning experience. As the new “strategy activation center of excellence” in Accenture, Root’s people have gained a firsthand perspective on how a company can maximize the human potential in an M&A, and limit the costly and painful risk of loss driven by disengagement, resentment, confusion, and ambiguity. Following are some themes and tips we believe can be beneficial to any leader navigating their people into the unknown that is merger integration.
5 Things Leaders Can Do To Lead Their People Through M&A
Communicate Open and Honestly
Leaders must remember what it is like not to know. While the leadership team has likely been strategizing for months, this massive change is likely to come out of left field for many others. Many people will experience a rollercoaster of emotions when they hear the news.
Be honest and open about the reasons behind the change, what it might mean to people, and why it’s exciting. One of the best parts of being acquired is you get the opportunity to create value together that you never could have created alone. This is incredibly energizing. Spend time talking about it, socializing it, and creating buy-in and advocacy.
Even the best leaders won’t have all the answers, and that’s OK. Saying, “I don’t know right now,” is always better than just avoiding the topic or question. In the absence of communication or answers, people will jump to their own conclusions. This rarely works out well.
Choose Dialogue, Not a Monologue
In times of change, it’s common for people to talk past or at each other. Leaders need to be extremely conscious that what passes for communication isn’t just all crosstalk. Dialogue is the oxygen of change. True, two-way dialogue helps people learn how to trust and respect each other, suspend their judgments, and listen deeply to all points of view.
Take the time to understand what’s important to the new joiners. People can take a lot of pain and change, but there are a few “tipping point” issues that can flip people from engaged and in the game to on the sidelines, or even worse, resistant and counterproductive. Know what these issues are. On the other side, acquiring companies will be unwavering on certain elements. Take the time to understand and be curious about why these will cause pain in the eyes of the acquired and where there might be some level of alleviation without compromising on non-negotiables.
Provide an Emotional Safety Net
People fear many aspects of change, and leaders need to meet these feelings with empathy. The following tactics can be powerful in navigating the emotional side of change:
- Show gratitude for your people. It’s easy to get so caught up in integration minutiae, payout numbers, new revenue targets, politics, and other issues of the day that you overlook the individual contributions of your people. They are taking a huge risk and going on this ride with you. Don’t just say, “Thank you.” Mean it and honor it.
- Use humor. Scott Adams, the creator of the Dilbert comic strip, famously made a career out of visualizing what people are truly feeling in the workplace. Visuals can be some of the most impactful, memorable ways of conveying a message – helping people understand the big picture without getting hung up on semantics. Additionally, seeing one’s own perspective in a visual is validating; it’s why Dilbert can still be seen displayed in workspaces and on social media today.
- Encourage a beginner’s mindset. Change is new and unnerving. Help people let go of their past identities and become beginners again. This is hard. It’s something leaders must talk about and encourage.
- Make space for your own emotions, too. Change is emotional. As a leader, acknowledge your own emotions connected to the integration. Whether it’s a loss of autonomy to make certain decisions, or a newfound fear of ambiguity and the unknown, or a genuine excitement about the exponential potential for impact, take time to assess your own emotions.
Keep Culture at the Center
It’s critical for leaders to maintain a consistent focus on culture through the entirety of change. Don’t decide to get to it later. When cultural strengths atrophy, it’s very difficult to build them back up.
Leaders can help bridge gaps during an M&A by identifying and acknowledging a company’s key culture differentiators and mindfully integrating those into the new ways of working. Alternatively, it can be just as important to recognize when there is a conflict with an existing culture characteristic and then determine whether it’s best to adjust a process or system to align more closely with the culture of the new, larger organization.
Know that aspects of your team’s previous self-identity will go away for good. (But we used to be quick and nimble!) That’s OK. Take care of the most important few things and be courageous to allow the rest to evolve.
Empower People to Become Part of the Change
Leaders must provide a clear understanding of how their people fit into the big picture. The key is to help them feel like they’re part of the change, not victims of it. Remember that people want to be a part of something bigger than themselves, go on a meaningful journey, feel a sense of belonging, and know their contributions make a significant impact.
People won’t always be motivated solely by the future or the corporate vision. They want to trust that their leaders prioritize their careers and future too. These are core human characteristics. If leaders create opportunities in the new organization where employees can fulfill their needs, they are setting up the business, and their people, for success.
The Power of Setting Yourself Up for Success
Organizational change is never simple, and an M&A is certainly no exception. No matter how good the fit appears “on paper,” and no matter how carefully planned the process is, there will always be people who are upset, angry, and confused. However, I believe that the strife and turmoil felt among employees can be minimized if leaders consider the above five actions as priorities during this uncertain time.