5 Cultural Issues to Keep in Mind When Companies Merge

For corporate executives, there’s nothing like the excitement of acquiring a new company. It’s a moment in time when the company can speed towards its overall goals. Most often a merger or acquisition is the result of months or years of due diligence and getting past hundreds or thousands of hurdles. For the executives of companies that are the target of an acquisition or merger, it can be just as exciting.

Mergers generally mean that a company will suddenly have improved resources. Improved capabilities. Expertise in a new market segment. Expanded geography. Efficiencies that they had not previously had access to. For those who have a thirty-thousand-foot view, the advantages and promise of a merger or acquisition are generally very clear.

For most employees, though, mergers and acquisitions can be a time of great anxiety. Will I like the new company? Will I have a new boss? Will my role become redundant? Will I lose my job?

There is no exhaustive list of things that corporate execs should check to ensure that a merger occurs sans the calamity. But here are a handful of things that can help the vast majority of your employees get through the process with a greater sense of excitement toward the future.

  1. Know thy culture. It’s critical to have a deep understanding of the culture of your organization. It’s also critical to have a deep understanding of the culture of the company you’re acquiring. Most importantly, it’s important to understand the differences between the two cultures and try to anticipate places where the two organizations may fit well and where they may not.
  2. Embrace benefits of the culture of the acquired company. There are things about the new company that made it attractive enough to acquire. There are reasons the company attracted and retained talent. Try to understand those things and adopt the most positive elements that might enhance your existing culture.
  3. Celebrate the vision for the new organization – not just the transaction. A merger of companies is the result of a ton of work. But all of that legal and financial rigmarole only gets you to the starting line. The heavy lifting that faces the new organization is about realizing the strength of the combined entity. This is a great opportunity to help employees understand how their individual roles will contribute to success of the new organization.
  4. Be transparent and move quickly regarding potential negative impacts on employees. Your employees are smart. They’ll soon understand where the redundancies are in the combined organization. As with any organizational change, in the absence of facts, employees will be more than happy to fill in the blanks with their imagination. Most often, our imagination will be much worse than the reality.
  5. Don’t forget that a merger affects legacy employees too. Often, companies are acquired because they’re in a desirable market or have some unique technology or process. Find ways to pay attention to and celebrate legacy employees – especially if the merger has disrupted their roles in any way.

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