Every merger and acquisition is stressful. There are a lot of moving parts to manage, not just from a financial standpoint, but also from a people and process perspective. It involves bringing together two organizations and requires uncovering redundancies and synergies in technology, roles and responsibilities, communicating the change to shareholders and employees at both organizations, and melding multiple systems and operations.
One major area often overlooked in the planning and execution is creating a culture of competence that aligns organizational focus, capability, systems, and processes to capture the value of the merger described on paper. If leaders fail to address the cultural changes needed, they see limited success in attaining the strategic benefits that were the initial goal of the merger or acquisition.
In fact, it’s ideal for there to be discussion and focus on the two companies’ cultural similarities or differences before the agreement concluded. Even if there are similarities in culture between the two organizations coming together, there are still numerous issues to be worked through in terms of people’s values and beliefs (particularly from those at the acquired company), operations and processes, and behaviors at different levels of the organization.
Well-Defined Communications and Behaviors. Newly created leadership teams often struggle with norms that define the most appropriate conversations during this process. As different management styles and cultures meet, leaders tend to be overly cautious in where, when, and how they share their perspectives. In turn, that slows down execution speed and leadership credibility. New and shared behavior standards help bring all leaders together.
Clearly Articulated Future State. Most executive teams struggle to clearly define what success looks like in the future for the new organization from a customer, competitive, and internal point of view. It’s essential to rapidly create a compelling future state for the business through an authentic and honest dialogue as a leadership team. Not as a “nice to have,” but as a mission-critical insurance policy that significantly increases the odds of hitting merger and integration goals on time. This includes identifying the behaviors, beliefs, and rules of the road that everyone from leaders to managers to the frontline must demonstrate to evolve the culture in a way that supports the strategy.
Employee Engagement is Paramount. There is an absolute need to actively engage everyone in how the merger or integration relates to new norms, processes, and behaviors. A common mental model or clear picture of what the new culture and strategy should look like is important to convey to everyone in the business in order to tie new organizational objectives to individual goals and action. Otherwise, change happens slowly or not at all.
Bringing together new leadership is challenging. Once you’ve determined who is part of the executive or leadership team after the merger is completed, it’s important to quickly get on the same page. This involves:
In the course of bringing together the leadership team to focus as “team one,” the culture of the future – including behavioral contracts, processes, and expectations for the business – begins to surface. Then the team can communicate more effectively with the rest of the business with higher levels of conviction and clarity.
Building a “culture of competence” depends on how well the business can answer and orient itself around the following questions:
Aligning leaders and the broader organization on the answers to these questions is of course only the first step in gaining clarity on the expected outcome for how you then move forward in building a culture of competence.
While this is really just the beginning of the process for creating a plan that delivers the results you want to see, it’s an important step you can’t afford to ignore and sets the tone for the business in the future.
You can substantially accelerate results when leaders connect all employees to the unique and differentiated value of the culture and how that translates for the business. This isn’t about culture for the sake of culture or any of the soft definitions of culture. This is about aligning organizational focus, capability, systems, and processes to develop and enable the differentiated and rare economy of scope identified at the outset.
It’s paramount that managers at all levels are clear on the changes that need to be made since they are tasked with delivering on the integration expectations and making sure their people stay engaged throughout the journey. Unfortunately, they aren’t often clear where all of the activity leads and are unsure how they can add value in the post-integration world. As their engagement wanes, so does their ability to keep their people connected in a meaningful way.
For the individual, their previous mental models on how the business works are destroyed and their ability to align their actions and efforts with what differentiates the business is significantly diminished – as is their overall level of engagement. So having managers that can help individuals connect their role to the new world order and ensure engagement continues to bring the culture and the strategy to life.
HOW WE HELP
We co-author comprehensive experiences with our clients to align on, activate,
and sustain strategies.
HOW WE HELP
