The Middle Market Review Insights on the Middle Market.

Subscribe Subscribe

Subscribe Today

Please provide valid email address

I want to receive:

Thanks for subscribing!

CEOs

100 Days Later: Identifying Post-Acquisition Cultural Objectives

Tags

When it comes to ensuring the long-term viability of your acquisition, no process is as important as integration. Integration refers to the merging of cultures and processes that occurs between companies post-acquisition. The most important period of integration is in the first 100 days after the close.

Below is a discussion of the objectives — particularly ones pertaining to culture — you should look to attain in those 100 days to ensure the success of the merger.

Start Early & Identify the Right Integration Team

Before going too far, it’s important to note that the integration process should be planned out well in advance of the official merger date. Although this strategy may feel like putting the cart before the horse, reactionary integration strategies are extremely risky.

After the deal is finalized, you should get started right away on identifying the team that will ultimately be responsible for combining each company’s cultures and processes. Since it is important to establish the parent company’s vision and direction for the merger right away, an individual from within the parent company is typically best-suited to leading the integration process.

Well-liked and respected members of the acquired company also make valuable members of the integration team. They are likely to champion parent company goals among their peers in ways that can accelerate adoption and reduce employee churn. Conversely, employees with bad reputations can have the opposite effect – they might attach negative connotations to your initiatives. Communication will be key throughout this process, so adding the right employees from the acquired company is paramount.

Picking employees from either company can be difficult if confidentiality is a priority for the transaction. If too many parties are privy to the deal, it could result in employee concern and rumors. It may be helpful to engage with those already involved in the deal.

Managing Employee and Culture Overlap

After an integration team is put in place, one of their first missions should be to identify the other managers and employees who will continue on at the company post-merger. This series of decisions will be dictated, in large part, by how independently the parent company expects its acquisition to operate. Facebook, for instance, acquired Instagram and left it more or less alone. That merger likely involved very few employee transitions. Other acquisitions are more encompassing – Wells Fargo’s purchase of Wachovia, for instance, saw the dissolution of the Wachovia brand and operations. Wells Fargo was more likely to substitute its own managers for many of Wachovia’s in that instance.

Establishing structural changes early on is key for multiple reasons. First, it eliminates the worries about job security that employees might have at the outset of an integration process. Uncertainty can lead to some employees proactively and prematurely jumping ship. It is best to keep the HR processes as tight as possible.

You should probably expect a few employees from both the parent company and the acquired company to seek opportunities elsewhere – some turnover is inevitable. After management teams and other aspects of the corporate structure are finalized, however, the remaining days of the first 100 should be spent translating processes and culture in ways that set a clear course of direction and minimize employee churn.

Swiftly making corporate structure decisions also helps to ensure consistency in messaging. The period of integration gives new managers an immediate opportunity to prove themselves both to upper-level executives and their new employees, while also establishing themselves as part of the progress being made. The opportunity to be introduced alongside new initiatives is one the right managers will use to effectively guide employees toward the company’s future goals.

Agree on Metrics & Systems

A natural place for new managers to begin asserting themselves is in outlining any new metrics by which their employees will be measured. Employees at the acquired company might refocus around more narrow goals – it’s assumed that their company was acquired for strategic reasons, and they are now part of a larger organization that can afford to have more specialized departments. New goals bring new metrics – these need to be communicated clearly and with plenty of advanced notice to ensure their attainment.

If employees are to be expected to meet new metrics, they are also going to need the means by which to do so. All systems and software should be aligned across parent and acquired companies within the first 100 days post-acquisition for data collection and reporting reasons alone. However, that sort of infrastructure is vital as employees adjust to new job descriptions as well.

More subtle pieces of technology and information – like certain sales techniques or productivity apps – should also be shared with employees at the acquired company right away. If you will be expecting a performance from them commensurate with that of your current workforce, they’ll need the commensurate tools with which to perform.

However, don’t be unnecessarily unilateral or heavy-handed with switching systems. If the acquired company has certain processes in place, it is worthwhile considering if they would be an appropriate method for newly-merged organization.

Other logistical issues abound. Cash collection is a big one – in most instances, routing all payments through a single office at the parent company will be most efficient. That can often involve replacing payment processing systems at the acquired company. Certain policy and procedural changes, like vacation allowances and office decorum, are also important to address.

There Will Be Challenges

What’s important to remember is that nobody wants to feel imposed upon. Having well-liked and well-respected members of both companies spread new cultural messages will go a long way towards achieving this, but refraining from rushing into unnecessary adjustments is also important. Some changes cannot wait, but others can. You should not expect complete cultural alignment within 100 days of integration – that will be achieved as new operations and collaborative processes take root.

These might take the form of quick wins – holiday parties, for instance, can be a great way to promote a unified climate. Even arranging seating so that members of the parent company and acquired company are intermixed is helpful. Culture is a delicate blend of a number of different factors at a company, however. The integration itself is already a major change for all involved, even those at the parent company.

Nevertheless, there is plenty you should be expecting within your first 100 days of integrating an acquired business. Here is a quick checklist to run through that will help you manage an integration that maximizes employee retention:

  1. Build an integration team incorporating employees from both companies to lead the effort
  2. Identify a management team to move forward with and establish those positions as soon as possible
  3. Establish any new metrics and goals for the acquired company and communicate them extensively to employees
  4. Implement processes and logistics, especially regarding software and systems, where necessary to bring consistency to the entire organization
  5. Voice new codes of conduct and other policies where necessary
  6. Plant the seeds of a unified culture
  7. Communicate extensively throughout the process to all stakeholders

Remember – securing an acquisition is just the first part of the process. In the end, the period of integrating that acquisition, especially over the first 100 days, will ultimately expose how much you’re really adding.

Learn More About Joining Axial

Request Information

Subscribe to Middle Market Review

Subscribe to Middle Market Review

Please provide valid email address

I want to receive:

Subscribe

Thanks for subscribing!