Unfortunately, mergers aren’t always successful. Some fail because one company overestimates the worth of the other—and overpays. Other times, failure can be linked to a lack of synergy in services, products, resources or markets. But history—and a recent KPMG study reveal that cultural misalignment among other issues put the failure rate of mergers at 83%. And it’s culture that drives employee behavior. Before the merger papers are signed, here are five tips to help you make sure your acquisition will be smoothly integrated into your business.
1. Assess the cultural gaps
The acquiring firm should compare and contrasts its own cultural behaviors with the acquired firm to determine what they share and what’s different. Is the management command and control, or more democratic? Is one company staffed with long-tenured employees and the other with Millenials? Performance reviews, employee on-boarding practices, and internal communications are just some of the processes that should be evaluated and compared side-by-side. This will reveal insights where the greatest degree of changes may be required.
2. Identify the strengths and values of the acquired brand
Companies with well-defined brands may have strong values built on a legacy of service and production. It’s important to evaluate the strength of the established brand and consider how to keep any valuable and unique equities that characterize their culture.
3. Create a realistic timeline for the integration process
Integrating an acquisition into your organization requires a timeline that takes into account the unique cultures of both companies. The initial assessment will tell you the areas to go slow or speed up. Identify key milestones such as a stabilized workforce and when HR platforms are fully incorporated. Play out different scenarios for change before you start the process. The benefits of doing so means you’ll have a smoother period of transition if you know where you’re headed.
4. Chart the specific areas for cultural and operational transition
Acquiring a company takes more than just assuming another business. There are operational issues in factories, systems in HR, communication brand standards and employees to consider. Assign teams to manage different areas that can coordinate what needs to be done across organization. Create a cross-functional “merger” team with representatives from both companies to have a “two-way” view of the process.
5. Build a communication strategy to keep everyone informed
Change produces anxiety. Lack of information prompts rumor. As a central element of an acquisition process, build a communication strategy that informs and engages all stakeholders from both acquirer and the acquired organization during the transition process. Go beyond Town Hall and occasional newsletters. Consider two-way feedback between both sides of the acquisition through internal online forums and workshops.