Executives involved in mergers are typically diligent in planning each step — from discovery to closing — but they often fail to map out a vision for the post-merger culture or define how to get there.
Despite immense pressure to integrate behaviors quickly, combining two separate cultures can be a daunting task. But waiting won’t magically create the needed mix, and a strong culture is vital to a successful integration.
Download the Research: Ensure M&A Success by Avoiding Common Pitfalls
Executives should be thinking about culture in every phase of a merger, but the first 100 days will set the tone across the newly formed organization.
3 steps to build a strong post-merger culture
Reconciling the behavioral differences can feel intimidating, but there are three main steps executive leaders can take to integrate organizational cultures as simply as possible.
Step 1: Prioritize the key cultural attributes
The goal of establishing the culture of a newly merged organization shouldn’t be to simply state the new organization's values, mission and vision. Employees will find this type of language too difficult to connect to their everyday actions and priorities.
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Instead, use the employment value proposition (EVP) framework. This framework helps pinpoint the strongest attributes from each organization and pull those forward into the new culture.
First, ask employees to rank the relative importance of and relative satisfaction with each of the EVP attributes. Next, collect all the feedback and use these rankings to figure out what is important to each culture and what to focus on during integration. Look for obvious opportunities in the attributes ranked “high importance, low satisfaction,” but proceed carefully with those of “high importance, high satisfaction.” If one workforce is satisfied, it’s trickier to improve on this without accidentally tipping the scales toward low satisfaction. Often, the risk isn’t worth the reward.
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Pay attention to attributes that executives think are important but the framework reveals is of low importance to the general workforce. If employees don’t think it’s important, even if management has high satisfaction levels, the impact on culture will be low.
Step 2: Change the employee mindset
A big challenge of a merger is that employees have already adopted the mindset of whichever culture they came from. Even if they support the merger, it can be difficult to limit how much past perspectives and knowledge impact future decisions. In other words, employees are often still thinking like two separate organizations. This is where a “show, don’t tell” mindset can be beneficial to leaders, who should encourage employees to ask the following questions in the context of the merged organization:
- What will my organization — and I — be able to do that we wouldn’t before?
- What must I do differently in my role to make sure everyone, especially those from the other organization, derives value?
- How will I know that both organizations are capturing value from the M&A?
- How will I know that my contribution adds discrete value alongside that of the other organization?
The answers will help employees recognize and evangelize the benefits of the merger more than any presentation or memo.
Read more: Make Way for a More Human-Centric Employee Value Proposition
Step 3: Bust horizontal communications blockades
Top-down communications are vital to the success of any merger, but ironically their very nature means they often happen in established organizational silos. For example, executive leaders communicate with managers who communicate with individual contributors, but communication happens within existing organizational structures. Employees are now clear on the messaging from the top, but still don’t understand what their new co-workers do or how to work with them.
Horizontal communication can occur within existing social networking platforms. For example, start a private LinkedIn group for employees from both organizations or encourage employees to follow the organization’s Twitter handle so everyone sees the same messaging regardless of legacy organization.
Beyond Day 100
Creating a new culture for recently merged organizations takes time. There are no magic metrics. After 100 days, gather the executive team to assess how the enacted plans are working, and adjust as needed. Make sure you’ve given employees actionable ways to help create the new culture, and determine whether they are able to articulate the benefits of the merger. This is also a great time to think not only about how to improve the existing programs, but also about what the executive leadership team can do moving forward to support cultural integration.