How to get company culture right post merger or acquisition

Forcing two distinct cultures together is never straightforward, but there are ways to make the process smoother, says Jane Sparrow

Credit: Klaus Vedfelt/Getty Images

Getting culture right in an organisation is never straightforward and needs constant attention. It’s complex, primarily because it involves us humans, our beliefs and behaviours and how those things drive how we interact with each other. In other words, it’s messy.

Organisational culture, however, is one of the primary levers for organisations and leaders to drive performance, and it’s never more important than in times of great uncertainty and change. The time to focus on culture is not when you hit that change (it’s way too late then). The time to focus on culture is every day, regardless of the weather in (and outside) your organisation. If strategy provides clarity and focus on your direction, culture is about how a group of individuals achieve common goals together through shared values and beliefs. And for organisations and leaders, investing in culture needs to be a daily practice. 

What happens, though, if your workforce is the sum of two distinct parts after a merger or acquisition? As thousands of UK companies have previously discovered, blending two teams is not always a marriage made in heaven. Despite this, the vast majority of FTSE 250 company directors are looking to carry out mergers and acquisitions this year and cultural alignment will be integral to their success.

Each integrated business is unique but there are five simple stages that all leaders and HR teams can navigate to ensure a smooth beginning to the marriage. 

Understand the cultures you have

Understanding both organisational cultures deeply is the essential first step in any integration. Interactive listening ‘interventions’ across every level, geography and job role across both organisations is paramount, as is using creative approaches to enable people to describe the current culture. 

In this process, we’re trying to uncover commonalities to work with, strengths on each side, as well as areas for development. Think of it as an opportunity to create the best of both worlds and for both organisations to learn from one another, as well as creating ownership and action immediately at an employee level.

Explore all the available data

To ensure you lay firm foundations for a merged company culture, you need to get under the skin of both businesses. Taking time at the beginning to understand how each company and its people have engaged is a worthwhile investment and is very much a quantitative as well as qualitative exercise. 

Data allows you to create a platform of facts about both company cultures on which you can then start to build a blended approach. So often organisations don’t maximise the data and base their integration strategy on opinion and feeling alone (mainly that around the ExCo table), and this can end disastrously. 

Codify the findings

Now, you are potentially combining two very different firms that have had their own distinct approaches to governing themselves and reporting on performance. How do you marry the two bodies of information from audit and data gathering to better identify commonalities and differences?

The answer is to codify your findings. In the work my company did with two energy firms, we pulled together a picture of the cultures of both companies and codified each one based on nine ‘culture hallmarks’. These cover a broad range of areas including insight around how each business has made decisions, how have the leadership teams motivated their people, what language and tone of voice has been used in internal communications and much more.

With a code, you can provide clarity and measure performance of the new corporate culture. With this example, we were able to use the hallmarks as a performance dashboard for the merged business.

Identify shared ground and differences

With information collated and codified, you can more easily establish what you have to build on. You will identify shared ground and similarities, and you will want to ensure that the positive elements of both company cultures prevail. At the same time, of course, you will spot those differences that could cause friction. These need timely discussion and prompt decisions about action to nip potential integration issues in the bud.

This exercise, enabled by codification, is an essential step in the integration of two organisations. With greater clarity, you are better equipped to manage the differences, capitalise on opportunities and shape a culture for a single, successful organisation. This will help you shape a roadmap for the newly formed team.

Prepare your leaders

The high degree of importance leaders place in cultural fit as vital to the success of integration is well documented. Yet, a lack of cohesion between the two merged organisations is so often cited as the main reason for failure. In my experience, this lack of cohesion so often starts at the top table (often subconsciously).

So, yes, culture audits and codifications are important, but so is ensuring your leadership team are prepared for the transition. And this is about anyone in a leadership position in the merged business. A merger or acquisition requires empathetic and visible leadership at C-suite level and far beyond to every people manager, and emotional intelligence throughout the management structure. Leaders being intentional about every aspect of collaboration and alignment is essential. Practical manager support sessions and coaching is just one effective method to equip all managers to lead change.

Forging a strong work culture post merger or acquisition is difficult and sensitive and often an emotional journey, but it is vital. With deep understanding of both organisations at the outset, an agreed approach, clear communication, high levels of employee engagement and strong, empathetic leadership, it is absolutely possible to shape a marriage that is built to thrive and last. 

Jane Sparrow is director and co-founder of The Culture Builders