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When Two Become One: How to Manage Merging Cultures During an M&A

For the past few weeks we’ve been talking about the practical implications of mergers and acquisitions (M&As) on payroll and your core HR functions. This week we’ll cover what’s likely the most challenging piece of an M&A to navigate—the blending of two cultures.

When Two Become One

Mergers are often compared to marriages because in both institutions, two independent entities make a commitment to join together with hopes of a beautiful future. In organizations as with marriage, when two become one it means blending two extended families. (If you need to be reminded how stress-inducing and cringeworthy merging two very different families can be, watch My Big Fat Greek Wedding or Meet the Fockers.)

M&As bring loss. If your employee lost her closest confidante at work when the other’s position was eliminated she may be dealing with anger, confusion, or fear that she will be next, and these emotions will impact her productivity level. According to a Gallup survey, those who have a best friend at work are seven times as likely to be engaged in their jobs, are better at engaging customers, produce higher-quality work, have higher well-being, and are less likely to get injured on the job. (Bottom line: having a friend at work is important and losing one is hard.)

Another impact on employees are changes to once familiar routines. While often necessary, new policies, processes, technology, and office locations can leave employees feeling disrupted.

Creating a New Culture

So what you can do to ease the challenges associated with uniting two companies? Here are five ways you can nurture a strong union and create happy, engaged employees:

Investigate. If you’re in the early stages of exploring an M&A, perform a cultural audit and take an honest look at both the buying and selling company’s cultures. Some questions you can ask include:

  • Are you like-minded when it comes to collaboration, communication style, employee development, work-life balance, and community involvement?
  • Is culture intentional or accidental?
  • Are your goals around long-term development or short-term performance?
  • Is your primary focus internal (integration, collaboration and unity among your team) or external (competition and securing your place in the market)?
  • Does one company run a tight-ship while the other is more laid back?

If you’re not seeing much in common, walk away.

Communicate. Your merger will get off on the wrong foot if there’s too much secrecy and not enough transparency. Be up front about coming changes and share the anticipated benefits of the M&A with all of the levels of the organization that will be impacted (this means everyone). Regular, transparent communication minimizes speculation and gossip, which are both enemies of a healthy work environment. Communication should not be one way. Give employees the space to ask questions and talk through their concerns.

Integrate. Great organizations lead from their strengths. Look for the best in each company and leverage these unique strengths. Maybe one company has a popular incentive program you can continue in your new company. Or the other is very skilled in professional development. Next, consider your shared values and find ways to capitalize on these.

Cultivate. Set aside time to foster community. Give employees in both organizations an opportunity to blow off steam together, team-build, and socialize outside of their roles. Some ideas include outings such as an escape room, axe-throwing, or bowling. This allows employees to discover commonalities with their new colleagues and form trust.

Celebrate! You didn’t embark on an M&A to create a bunch of stressed employees. You formed a partnership to strengthen your organization, increase profits, and grow your market share. So when you reach a milestone, announce it and celebrate together. This will remind your team that the growing pains are reaping success and that they’re a part of it.

In Your Corner

A merger or acquisition can bring exciting possibilities and great success for your business. It can also bring anxiety and new relational dynamics that you need to prepare for and manage. If you work in HR a lot of these changes will fall on you. At Patrick Payroll we offer tools that can streamline your payroll and simplify your HCM. This allows you to focus on people instead of payday. If you’d like to discuss how our solutions can take away your stress and give you back you time, schedule your free 30-minute call here.