Six secrets to maximize employee value during a merger
Every merger or acquisition brings challenges of integration, especially when it involves combining two workforces. For many employees, the announcement of a merger brings about feelings of fear and anxiety. It’s up to those in charge of the merger to look out for the teams of people coming from different companies, who will now be working side by side. So what does it take to meld two companies into a single thriving entity that improves employee relationships and builds confidence?
Bridging two workforces requires identifying and integrating both organizations’ approaches to short and long-term operations and, just as important, day-to-day work styles. Even if both companies are in the same industry, that doesn’t guarantee an easy fit. There are as many cultures and business strategies as there are companies. Common ground has to be discovered, explored, built and tested. Even with the best-matched companies, integration can still be tricky. Below are 6 tips to ease your path:
1. Move quickly: Have a 100-Day Plan Ready to Go. Once a merger is announced, employees from both the buyer and the seller naturally expect changes to occur. Moving quickly over the first 100 days will give management the smoothest path for implementing changes. Procrastination will lead to more resistance as employees go back to business as usual. Prepare a written 100-Day Plan to serve as a working document for the entire team to follow. The Plan should be built around two basic questions: Where do we begin? And what do we want the new company to look like after the first 100 days?
2. Quality not quantity when it comes to communication. Communication is key to successful integration; however communication shouldn't be measured by how much is shared but rather how well it is shared. Employees do not need dozens of meetings or bulletins but rather honest and credible messaging. If, for example, there are plans to change vacation policies, it is important to explain openly to employees why, when and how changes will be enacted. The communication can occur online, in print or through in-person announcements. While this won't eliminate all uncertainty or doubt, being direct and honest with employees will ease concerns and lessen the spread of rumors.
3. Listen to the employees. We know economic growth has suffered in recent years, so employees may be generally anxious about the future. Add the stresses and unknowns of a merger, and there could be a crisis of morale looming. The best strategy to resolve this is to start listening to employees. Set up a toll-free hotline or in-house online forum for them to anonymously vent their frustrations and ask about rumors. Not only does the staff need to know what executives are thinking — executives need to know what their employees are thinking. Creating easy-to-use "listening posts" will allow management to understand what employees are concerned about and respond quickly.
4. Speed up integration through secondment. Secondment involves taking a few people out of the recently acquired company and placing them in equivalent roles in the buyer’s organization and vice versa. These embedded representatives serve as interpreters. They learn about the culture of the new partner, and take their insights back to the home team. The move need not be permanent, but should last for at least six months – enough time to get everyone up to speed and make the adjustments that will realize the maximum synergies. Secondment allows each company to get a sense of what matters most to the employees on both sides of the deal. It also gives each a chance to discover hidden strengths and weaknesses in both cultures that help make the best the new acquisition.
5. Brand Integration. The brand can be seen as the outward-facing aspect of the company culture. At its heart, the brand is a promise that customers can depend on, rooted in a strong and simple brand concept, a distinct ‘‘brand personality,’’ and a recognizable set of values. This promise is projected by the company name, logo, and visual imagery.
Every acquisition raises the question: "What shall we do with the brand?" Sometimes there’s a case for keeping it, but adding the owner’s brand as a secondary element, as Proctor and Gamble does with its many soap brands. Sometimes there’s a case for using the acquisition to enhance or overhaul the brand. And sometimes there’s a case for exchanging the old brand for the owner’s brand, as happened when U.S. Airways bought America West.
In addition to being the outward-facing identity of the company, the brand often represents the identity of the company as a whole – even to employees. It’s important to be aligned on your branding strategy for day one for the sake of both your customers and in order to maintain the loyalty of your employees.
6. Reverse Integration. Integration needn’t be a one-way street, with only the buyers bringing their systems or culture to the newly acquired company. The industry is unusually dynamic, with new management strategies and technologies constantly appearing on the scene. Acquisitions should help both companies grow and move forward, embracing the strengths of each. Does one have a unique sales team structure that increased the bottom line? Does one have higher employee retention based on a strong rewards program? This needs to be discovered to incorporate the winning elements from both entities for ultimate success.
David Braun is the Founder & CEO of Capstone Strategic, a management consulting firm specializing in corporate growth strategies,and author of the new book,Successful Acquisitions: A Proven Plan for Stategic Growth. David has over 20 years' experience formulating growth strategies in a wide range of manufacturing and service industries and has completed more than US $1 billion in transactions with his firm Capstone. He can be reached email@example.com.