Your Merger and Acquisition Integration Plan Must Factor in Culture

If your organization is considering joining or acquiring another company, your Merger and Acquisition integration plan must factor in culture, brand, and employee engagement every step of the way.

If EVP and culture are not addressed, engagement and productivity both decrease at an alarming rate.  Mistrust in the workforce increases and productivity declines. Without putting the right merger and integration plan into place for your culture, we’ve seen the success of a merger or acquisition become delayed by two to four years.

What Makes a Merger Successful

The most critical component of a successful M&A is that each company in the transaction have a well-defined Employee Value Proposition (EVP) and that both parties understand the other’s EVP.

Your EVP represents your corporate culture is the reason people join and stay at your organization.  It’s the bridge between what your employees feel and believe about their workplace, and the engagement, dedication, and passion they approach their work with – especially in the face of great change.

An EVP that authentically reflects your values and culture can and should be used to support your people throughout the M&A process and beyond. Once you each company’s EVP has been discovered and built, it’s important to celebrate the common areas and acknowledge differences with employees early on. The sooner you are transparent about what’s different between the two organizations and what employees value about each,, the quicker you’ll get your teams onside with the merger and what this can mean for them personally. This is the time to start fostering a positive attitude about what the future holds, and your EVP will be one of the best tools you have to tap into. Communication is vital during these often scary times and using your employee value proposition language consistently will ease fears and help the process go smoother.

Why a True Employee Value Proposition is Key

Your EVP is the summary of why people join and stay with an organization. We assure you, there will be differences and the why stay will now be challenged and uncertain.   Understanding your EVP variances between companies, and the depth of any differences and threats that exist between the two is the key to successfully navigating a merger and acquisition.  If your organization is acquiring a company, this is one of the best ways to determine if there is indeed a potential culture fit for the team. Conversely, if you’re being acquired, understanding the other company through the EVP and employee storytelling is a great way to ensure that there will be a longer-term fit.  Far too often there is a lack of transparent communications and assumptions made and discussed by the water cooler post-acquisition, and this is simply due to a lack of EVP communications internally. Knowing that this is such an important and critical factor to the speedy success of integration post-merger, we are shocked that not all organizations have it prioritized in their launch strategy and 100-day plan.

If your organization has been acquired, one of your biggest challenges will be to pinpoint cultural differences and identify any risks that lie ahead.  Strategic and financial risks are one thing – but your workforce and its values also have to be protected and managed. As a first step, it’s important to understand the difference between an Employee Value Proposition and values that are stated on a website or promotional materials, which can often be mistaken for an EVP.  

Formulating an EVP requires work, effort, and input from stakeholders throughout the company.  Having a clear vision of the cultural differences allow you to strategically navigate the potential landmines in a Merger or Acquisition.

Effects of Mergers and Acquisitions on Employee Performance

In the immediate short term after an M&A is announced, the leadership team is usually very excited about what it means personally  – especially when it comes to the increased value of stock options and expanded market positioning. On the other hand, most employees feel threatened, perceiving the change as an unwelcome disruption or loss of stability, bringing into question the very reasons they joined and stayed loyal to the organization.

Expect workloads to increase after an acquisition, and prepare for some downtime to protect your team from burnout and fatigue.  Manage expectations and plan for consistent communication about what the benefits of the merger are to all employees, and not just to the company and its executives.

What To Do During a Merger or Acquisition

If your organization is considering an acquisition,  it’s very important in the early days of the planning process to include the build of an effective EVP among your earliest deliverables.  If your leadership team is considering the purchase of another organization, ideally they should look to companies with a well-defined EVP as it outlines how invested they truly are in culture and talent.  At Blu Ivy, we recommend both companies have clearly-defined EVPs in the early stages of the merger process.

You will eventually combine the two distinct EVPs but in the first 12 to 24 months it’s most important to recognize and acknowledges differences, ensuring that your people still feel connected to their original culture while acclimatizing to the new one.  Having a clear understanding of both organizations’ EVPS will clarify how to steer the culture change that lies ahead.

Merger Announcement to Employees

You can set the tone for your entire M&A experience with your first communications, both internal and external.  Prior to the formation of the new entity, you will need press releases, video communications, and written announcements to employees, that remain consistently on-brand and on-message, reflecting your EVP and eagerness to understand and support their EVP throughout. Companies usually develop a microsite to communicate whatever is happening, where the process is at and what happens next. Encourage a subset of employees from both organizations to act as internal employer brand ambassadors.

On Day 1 of your new merged or acquired organization, an internal communication needs to go out to all employees, with a joint employer brand tagline used throughout. Blu Ivy can help craft messaging and strategy that ignites enthusiasm and alignment from the outset.  

“Draft your communications with a view to building trust and establishing the employer promise based on what you know matters most to employees.”  – Stacy Parker, Managing Director, Blu Ivy

This is key to retaining talent during a time of change – your EVP is all about why your employees want to be along on this ride, and why they will want to stay.  For M&A-related communications, we recommend focusing on big-picture goals, purpose, and vision – creating a unified front for your employees to stand behind.

What is the danger of not doing this?

With all the work and demands of any M&A, it’s easy to concentrate on the systems and process items and miss this critical step. . But if EVP and culture are not addressed, engagement and productivity both decrease at an alarming rate and in turn, impact trust and turnover.   Other serious impacts include a lack of alignment across leadership, lowered shareholder price, company performance and loss of customer loyalty.

If your organization is considering a merger and acquisition, or if you are already facing one,

Blu Ivy Group will help you build out a branding and communications strategy that will see you through the whole process. Call us today at 647-308-2352 to learn more!

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