This post is by Jerome Parisse, originally published on the Walking the Talk website. It is one in a series that Jerome and I put together to introduce a unique Culture Masterclass for M&A Executives, developed jointly by Isely Associates International and Walking the Talk.
Mergers are a unique situation culturally.
During a merger or acquisition you have to manage culture in a different way. Mergers accentuate cultural issues, which might have simmered along unnoticed in a ‘business as usual’ scenario. Anyone who has been holding lingering doubts about whether there really is such a thing as culture will have no doubt after living through the first few months of a merger or acquisition. Culture will jump up and hit you in the face!
In the case of normal organic growth, an organisation’s culture grows and changes as its value-set evolves naturally over time. In the case of a merger, two cultures, each an intact and working value-system in their own right, are pushed together. It is like an arranged marriage. The parents got together and worked out a deal, and suddenly the children find themselves lifting their veils to see a complete stranger. The underlying value set of this new partner will not be immediately visible. What are apparent are the behaviours, symbols and systems – the outward manifestations of this value set.
How people feel after a merger or acquisition
One of the first challenges in M&As and other deals concerns how people feel.
It would be great if everyone saw the opportunities, which were in the minds of the merger-designers, and embraced them with open arms. Unfortunately, these people are in the minority. Everyone knows there will be some rationalization, and therefore people are competing with each other for jobs. Under these circumstances it is understandable that the other side is seen as the enemy. Most people feel one or more of the following emotional states during the first three months.
|Insecure||Will I have a job?
Will I have to move?
Will I lose my friends, status, perks, and opportunities?
What will happen to my projects, plans, performance, and customers?
|Angry||Why did they do this?
Why is no-one consulting us?
How come those people are being more advantaged than me?
They’re making a real mess of this
|Unvalued||Doesn’t anyone care about my customers, projects, plans, experience?
Why is no-one telling me anything?
How come I’m not in the “inner circle”?
|Grieving||I don’t want to lose our name, identity, team, rituals, friends|
|Arrogant||I’m better than them, we’ve come out on top here, we’re invincible|
A merger will test the level of maturity of each person involved. Some are inherently less insecure because they have a quiet inner confidence. We refer to these people as more conscious. They are more able to choose their responses to situations, less reactive, less defensive. This makes them less dependent on outside circumstances for their personal satisfaction and security, and consequently less fearful of change or loss. They are able to take personal responsibility for their feelings and their future. This will bring out the best behaviour, and you will notice these people are constructive and productive in their day-to-day affairs. They waste less time complaining about management, blaming the other organisation for their problems, playing games of one-upmanship and holding onto the past. This has always been true of these people, but you really notice it at times of high emotional stress and threat. So any development work you have done previously to help you organisation become a ‘conscious business’ will pay big dividends at this time.
The people stream of a good integration team will address most of these emotions through change management planning. Involvement, frequent, factual communication and speed are the basis of good change management during mergers. These all serve to reduce uncertainty and the emotions associated with being in the dark. Working on the vision and future will help to lift people out of their negative emotions and increase their excitement.
Manage the culture
To effectively manage yourself and your organisation through a merger, you must be able to separate the management of these feelings from the management of the culture. The first is urgent, and important; the second can appear less urgent, but in the long term is even more important.
Let’s return to the analogy of the arranged marriage. The bride and groom may not like the fact that it occurred, or be angry about the manner in which it took place. However, it has happened. After few months they are left with the reality of having to make a life together. At this point, it is their ability to understand and work with each other’s values and beliefs about what is important that will make the real difference. Most relationships have their frustrations as a result of different personalities rubbing up against each other. But it is the values conflicts that are the deepest of all. The reason some of the deepest arguments in relationships centre on money is because how an individual spends their money is an outward expression of what they value. Align around your values, and you become a strong partnership. The same is true when two cultures are merged together.
During the first few months, emotions are high and most people are busy settling down their own personal circumstances and re-establishing some kind of order in their lives. They are not thinking about values, they are thinking about personal security. Abraham Maslow’s Hierarchy of Needs shows us that until the basic needs of security and survival are met, people do not tend to focus on other, deeper issues.
The challenge of leaders is to find a way to focus on culture whilst simultaneously dealing with their own personal feelings, and those of others, about the merger.
Want to know more? Get in touch.