4 Things to Consider When Transforming a Culture Following a Merger or Acquisition

Cultural misalignment is regarded as one of the biggest influencers on whether a merger or acquisition (M&A) is a success. Our strategic community, the HR Leadership Think Tank, brings you four key areas to consider when embarking on a cultural transformation post-M&A.

HR Leadership Think Tank Doctorlink Cultural Change Oasis HRA strong internal culture can prove invaluable for a business. It can help with setting and maintaining company direction, attracting and retaining talent, and building a brand identity. Therefore a weak, negative or misaligned culture can invariably prevent a business from reaching its strategic objectives.

Businesses that have gone through a merger or acquisition will typically need to embark on a change programme to align all involved cultures. And for many businesses that have been exposed to M&A activity, the leaders will often cite cultural-misalignment as the primary reason for the alliance not going to plan.

At this HR Leadership Think Tank, hosted by DoctorLink, we explored how to redefine or build a company culture so it’s aligned to the business and supports commercial objectives. Here are four things we think you should consider when embarking on a cultural transformation:

1. Understanding what you’re trying to achieve and if you’re ready to achieve it

One of the first battles of effective change management is getting the business to understand the impact and importance of what you’re trying to achieve. And, in order to do this successfully it’s crucial that you have a sound understanding of the clear drivers behind why you’re attempting this change. Are you doing it because something critical is happening within the organisation? Or are you trying to address and solve a problem? Whichever it is, investing in a robust plan of attack is key when it comes to integrating processes, teams and customer bases. This will include an assessment of the business’s readiness for change. For example leadership structure and a realistic view on what people-related challenges might follow.

2. Defining a collective purpose and set of core values

Articulating a business’s purpose is critical for ensuring employees are working towards a collective goal. For organisations that have gone through a merger or acquisition, it’s vital to have an embraced purpose and cohesive set of values that unites the entire workforce; regardless of which part of the newly formed company they originated from. When defining these components post M&A, a business should consider the following:

  • What part(s) of the existing cultures do we want to protect?
  • What part(s) of the existing cultures do or could detract from future success?
  • What part(s) of the existing cultures will be relevant in the ‘new world’?
  • What does good look like from a cultural perspective?
  • What are we trying to achieve by investing in our culture?

Asking yourself the questions above will help shape the values, purpose and ultimately the heart of your business. However, in order to ensure it’s embraced by the whole workforce you must firstly secure the buy-in of your leadership team and secondly work with as broad a cross-section of your employee base as possible when creating this vision.

3. Embedding and communicating your cultural transformation

The success of a change programme is arguably routed in how effectively it’s been embedded. There’s no point defining an empowering culture and it’s supporting components (i.e. values, purpose, vision etc) if the workforce doesn’t know about it or embrace it. But this, of course, takes time, planning, consistency, thought and strategic direction. From selecting your communication channels through to making visual changes in your workplace, there’s a whole host of areas to consider when it comes to embedding a new culture.

Top tips from the HR Leadership Think Tank for embedding and communicating a new culture successfully:

  • Identify your biggest internal influencers and get them on board. Role-modelling is key.
  • Tackle messaging from the ‘what’s in it for me’ perspective and use this to appeal to and resonate with your workforce.
  • Break down communication tactics by employee groups and different comms channels/mediums to ensure that the right messaging reaches the right people in the right way.
  • Make messaging accessible and relevant depending on what you’re trying to communicate!
  • Use storytelling to help bring your communication to life and celebrate internal successes.  

4. Measuring and monitoring the impact of your cultural transformation

As with all cultural transformation initiatives, it’s important to measure the success and impact on the business. Whilst culture is an intangible entity, the closest barometer for understanding whether or not it’s working for or against you, is by measuring employee engagement. It’s useful to take stock of engagement levels at the beginning of a transformation project and then consistently check back in with employees to monitor the impact of the change, and respond to any worrying results.

Engagement surveys come in all shapes and sizes, but the general consensus seems to be that little and often works best (e.g. pulse surveys). You’re then in the fortunate position of tapping into the feelings of the workforce more regularly, providing you with valuable intel and an opportunity to act quickly. This builds up trust from the employee population and increases their faith in the business’s desire and ability to do something about an issue raised via an engagement survey. Instilling this is a sure fire way of increasing survey response rates and building a collaborative culture based on feedback.

Key Takeaways:

  • Have a clear understanding of why you are embarking on a cultural transformation programme and what you want the end result to be.
  • Ensure that the business is ‘change ready’ before starting!
  • Always strive to maintain the best elements of the businesses involved in a merger or acquisition; don’t just assume that the larger business is the stronger one.
  • Use communication channels to set and reinforce the tone of your key messages.
  • Reinforce the status and importance of your employees to ensure they feel valued and understood in the ‘new world’. You want to avoid them feeling downgraded in any way!
  • Strive to arrive at a point where you’ve got consistent values and standards, however remember that it’s okay to allow some positive cultural variation amongst different parts of the business. We’re not all carbon copies of one another!

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