Recognise This! – Culture is the most powerful (and the most neglected) tool for successful M&A.

Mercer periodically puts out terrific infographics summarising research around a particular topic. The most recent is “People Issues Affect M&A Transactions More Than Ever” (click through).Infographic by Mercer Insights

Notice in particular the last 2 charts showing how neglected company culture is during M&A, with these two major takeaways.

1. Culture Most Neglected Across the Board

The red chart shows nearly all regions of the world agree culture is largely ignored during the M&A process. This is detrimental not only post-M&A, but during as well. People cling to the culture they are accustomed to, either because they enjoy working within the culture and are loyal to it or (at the other end of the spectrum) prefer “the devil they know.”

Ignoring the need to address and ultimately merge cultures will result in a “culture of cultures” after the merger, lengthening indefinitely the process of actuall integrating people, teams, processes and critically, success outcomes.

2. No Process to Leverage Culture Post-M&A

The purple chart shows few have a process in place to proactively leverage the company culture successfully after the M&A integration is complete. This is a huge miss as your culture is the driving force of the organisation – it’s how people behave when no one is looking. What is going to be the driving force in your merged organisation? How will people know what behaviours are now preferred, from all employees regardless of originating organisation?

The lack of a culture-focussed process during M&A can be addressed through a strategically designed social recognition programme, which is an approach proven to get people focussed on and bought into new goals and desired behaviours in the shortest amount of time.

5 Steps to Merge Cultures through Recognition

  1.  Merge the two companies’ vision and valuesinto a new statement and set of core values that are meaningful to employees from both organisations. Then use the new recognition programme as a positive communication tool of the vision and values to all employees. When done correctly, recognising behaviours, actions or attitudes that are tied to a specific value will help those new values come alive for all employees, creating a more meaningful and memorable impact. Designate recognition ambassadors within both merging companies to encourage and demonstrate appropriate use of the recognition programme.
  2. As with any strategic programme, secure executive sponsorship of the new organisation’s recognition programme, but be sure to include key senior leadership from both companies in the initial roll-out. By seeing familiar and trusted leaders encouraging positive appreciation moments throughout the merged organisation, employees from both companies will begin to notice and acknowledge the valuable efforts and contributions from their colleagues in the other company.
  3. Any strategic programme requires measurable goals to track success. Frequency, timeliness and appropriateness of the rewards are critical in recognition programmes. In the special case of M&A, specific goals should be included to track the progress of the merger of the two cultures into one of appreciation across the global workforce.
  4. Prior to programme launch, confidentially survey employees on current job satisfaction; engagement level in their current roles; level of concern with the M&A relative to job retention, potential culture change and leadership; understanding of the values of the merged entity; and how those values translate to daily behaviours. Conduct the survey again periodically to measure improvements in these and other predetermined critical-to-success areas.
  5. Launch the programme soon after the M&A is announced to engage all employees in this new culture of recognition, help them understand their continued value to the merged organisation, and unite all employees behind the new vision and core values designed to achieve it.

Have you been part of a merger or acquisition? What was the greatest challenge or biggest missed opportunity?