Mergers and acquisitions are considered beneficial for companies as they can bring growth, value, market access, and a global presence. However, many mergers have not successfully delivered these benefits, resulting in lost value for shareholders. One of the common reasons for failure are culture differences.
If the corporate culture is seen as the way we do things around here, the main questions are:
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how to identify different ways of doing things
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build an overall understanding of where the newly established company is heading to
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allow employees to reorient themselves and get a sense of belonging
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how to gain a quick understanding among all employees – on both sides
The list of questions is much longer, yet the answer is always the same. Leaders need to build on the fact that employees are social beings who need to interact with others to gain a shared understanding to avoid feeling insecure, not being heard, and lonely. The employees need a sense of what these changes mean for them as individuals, as a family, as employees, and as a team… and how to take relevant steps. Without high-quality and meaningful conversation, they don’t have the opportunity to build the necessary understanding of the changes, reorient accordingly and define their role in the newly established organization.
Although at first glance, conversation and discussion appear as logical solutions, they are incredibly neglected – in M&A processes as well. In the last decades, the exchange of opinions has been promoted, even if they are rarely built on arguments and experience. The same with surveys. They are conducted to gain insight into the existing culture, even if they don’t say anything about the employee’s needs for collaboration and creating value. The exchange of perspectives and experiences is needed, as knowing how to place them in a certain context and develop a common understanding. The question is, what presumptions need to be fulfilled to make useful work-related conversations possible? How to make a change fast & sustainable?
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Culture is always complex. It means that it produces surprises, it is only observable from the outside (and not measurable as often presumed), and the interaction between people is dynamic. In a complex environment, conversation and exchange of ideas is fundamental to building a common context and building upon the following steps toward a desired outcome.
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Communication in an organization flows in three different structures – formal, informal & value creation structure. Generally, the communication follows a waterfall approach in the first formal structure and is enriched by defining ambassadors in the second informal structure. Most of the communication and attention is directed towards the initial two kinds of structures, but if we desire to be successful in the M&A, we ought to place a greater emphasis on the third type.
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Change has a higher chance for success if all employees are invited to participate in the conversation. Research conducted by Kurt Lewin showcased that change is more scalable and sustainable if all people are invited into a conversation and have the opportunity to exchange their thoughts and worries and how they can contribute in the best way to make the change successful and sustainable.
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In his concept, William Bridges described that people go through an in-between time when the old is gone, but the new isn’t fully operational. It is when critical psychological realignments and repatterning take place. This is the time between the old reality and sense of identity and the new one. People are creating new processes and learning what their new roles will be. One-off discussion events are not enough to achieve the goal of changing a culture, especially in a demanding undertaking such as M&A. It takes repetition, rhythm, and iterative methods to develop a shared understanding, as well as suitable interaction patterns.
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The second presumption for success is the content. Without appropriately prepared content in the context of the M&A the discussion could be diluted, and the aimed result not achieved, so a content led approach is needed.
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With decentralized teams spread over the globe, major issues are also time of employees, travelling costs, opportunity costs and availability of facilitators. With thousands and tens of thousands of employees and the aim to achieve the same level of knowledge and understanding to start creating a new culture is making the possible return on M&A investment to wait. In a digital world, a digital content-led solution is needed.