From Nichole Viviani, Chief People Officer, Xplor
M&A growth used to be the exception, but it is increasingly becoming the norm. Mergers are incredibly easy to get wrong and challenging to get right. Evasion culture is the number one mistake that executives make in mergers and acquisitions, especially in a global context. Building a strong culture and a strong sense of belonging is one thing when you’ve grown organically, but aligning global teams brought together through mergers and acquisitions is another challenge altogether.
Using culture to address M&A challenges
Any M&A activity can lead to organizational fears. The bigger the deal, the greater the fear. Of course, people worry about what’s next, what’s going to change, what the new company will value, and how it will feel to work there in the future. This fear can manifest itself in a variety of forms – and if leaders don’t address it properly, it can lead to loss of talent, a lack of growth momentum, and ultimately a deterioration in the value of the business.
On the other hand, there is an incredible opportunity when leaders can embrace this natural organizational fear and rely on it.
Over the past several years, I have had the privilege of leading global teams through multiple mergers and acquisitions in the payments and technology landscape – most recently as Chief People Officer of Xplor Technologies, a payments and software company created through the merger of Clearent and TSG. From this experience, I have identified six key elements for successful cultural alignment in mergers and acquisitions.
1. Understand your common history
You can’t culturally set the right course if you don’t understand what each business has made successful, how the job is done, and what people value. That means understanding the values, labor standards, and history of the people you want to unite. Which parts of this story are crucial for the journey together? What parts can be safely left behind in the past? Cultural surveys, focus groups, and value mapping exercises can be helpful in understanding a company’s past and ensuring that leaders and employees are engaged.
2. Communicate a clear, strong purpose
Why should your employees care about what your company is doing? Why should they invest more time, effort, and energy in your business unlike other companies? Crystallize the answer to these questions by your purpose. It should be simple, strong, and inspiring – a collective call that connects. Not only does this create a focus for everyone – it is also a foundation for belonging. In a company with many moving parts or different business areas, a simplified purpose can be a good solution. Often times, simplicity will go down well with a large group of employees and will help everyone feel connected rather than disconnected from a corporate purpose.
3. Inspire and connect with new values
When you merge two companies of similar size, you should create new values that represent the new company and what you aspire to be. Bring people on this journey. If people can help shape it, they are more likely to stand up for those values.
4. Promote transparency
Just because you aren’t talking about something doesn’t mean your people aren’t talking about it. Fusions keep creating narratives – the question is whether you shape them or react to them. When you come from a place of transparency, you create trust. This includes touching areas that are most important to employees, even if they are not yet able to go into details. This will help you overcome some of the more cumbersome topics that can bubble up if not discussed. 99% of the time, if you expand confidence, you will get confidence back.
5. Engineer connection
In global organizations with more and more people working remotely, it’s not all about connections. You have to construct it. How do your tools and technologies enable people to connect? How does your approach to meetings enable people to develop effective working relationships? For many people, work is a major social medium that has been reinforced by the pandemic. Being aware of this and building your internal structures to make this possible will result in stronger global teams and more engaged colleagues. At Xplor, for example, we use Workplace by Facebook to create a global connection. We launched the platform in mid-2020 and deliberately reduced all other forms of internal communication in order to increase acceptance. The result? We saw an incredible connection that we could never have predicted. This was made possible by the group functions of Workplace, with which Xplorer can create their own groups, which others can then join. We have everything from your typical Dogs @ Xplor, Women @ Xplor, sports and lunch and study groups to our espresso martini and tiramisu group.
6. Create important moments
There are many moments that are important in your work life. From your first interview, to receiving your letter of offer, to receiving your technology, your first week, and your first performance review, it goes on. Each of these play a role in how they perceive the company they work for. What do the moments in your company say about your company? Many of these moments will come automatically and you should think about how to make them as impactful and representative as possible of your purpose, promise and values. But to go further, what moments can you create that will become powerful examples of culture that your co-workers will tell their friends and family about.
Creating a cultural alignment between global teams is not easy and requires patience. Be deliberate, try to understand and communicate openly, and you will see people return their trust with confidence.
The views and opinions expressed are those of the author and do not necessarily reflect those of Nasdaq, Inc.