Our experience tells us that while culture is generally considered when selecting acquisition or merger targets, the post-deal integration plan rarely takes a methodical approach to ongoing culture shaping. We recommend a different approach: use statistically-validated culture assessment tools to identify the specific strengths of each culture in the context of the strategic vision. Then implement specific organizational change management strategies to shape the post-merger culture. With continued use of culture assessment tools, the team can monitor progress and course-correct as necessary.
2. Start with the operating model, not the org charts
In the aftermath of a merger, integration teams work to sort and combine the two organizations into a single organization chart, often relying on titles or function or group names as the premise for structure. Dubbed the “lift and shift” approach to organizational design, it invariably leads to an ongoing, disruptive series of reorganizations as the company’s new operating model develops. Instead, initiate organizational design by applying organizational design principles driven from the mission of the merged entity. Organizational shifts will then fulfill the operating model from the beginning, rather than a series of upheavals that limit productivity and trigger attrition.
3. Leaders drive your culture – so navigate their journey
As we talk with leaders about their roles in building a company’s culture, they often believe they are modeling desirable cultural behaviors. Not necessarily, says expert Dr. Peter Fuda. He describes the concept of “Illusory Superiority” – that “we each judge ourselves by our intentions. We judge everybody else by their actions.” Fuda has validated with quantitative employee feedback that roughly two-thirds of all leaders are unaware that their intentions are, in fact, not visible in their actions. Helping leaders understand this intention/behavior gap accelerates both leader alignment and culture reshaping.
4. Accelerate team activation
New teams are virtually always formed following a merger, and newly appointed leaders often struggle to integrate expanded teams and scope. We recommend activating new teams by holding a structured series of workshops. These help each team define objectives, clarify roles, and even get down to the nitty-gritty of working through combined workflows. Often, a significant “bonus” outcome of this activity is the development of a foundation of collaboration and trust that enables a higher velocity transition to productivity.
5. Use people analytics to measure change
We measure the most critical factors of our organization’s performance in order to identify opportunities to improve their effectiveness and efficiency. In an M&A situation, we need to be measuring how well our people are aligning to the desired culture and new organizational design. The field of People Analytics is the answer. People Analytics has developed significantly in recent years: new “listening” tools gather rich, high-quality data and translate it into actionable, benchmarked information – all in real time. This allows an organization to quantitatively measure how well its people are aligning in the newly merged environment. And an integrating organization can use these on-demand snapshots as decision support tools to benchmark and course correct as needed – ensuring that the people factor of the merger remains solidly on the path of success.
The achievement of envisioned merger value relies on a post-deal integration strategy that includes an emphasis on people factors. In the forthcoming installments of this series, we’ll further explore practical approaches to driving integration success.