High stakes mergers, acquisitions and other significant re-organizations come with a myriad of risks that keep even the most seasoned of leaders up at night, not the least of which is how they keep the ship afloat as the old ways of getting things done vanish and the new ways are not yet clear. Those leaders who are part of the company’s future are the ones now on the line to deliver the business value promised by the changes, and must do so as other team members are exited and still others may be jumping ship, taking their knowledge and experience with them when they go. Internal functions across the newly formed enterprise are riddled with holes as once intact departments collapse or are restructured, disrupting familiar internal networks of allies and resources. The “go-to” partner who understood how to get things done may simply not be on the other end of the phone anymore.
While this is a predictable state of affairs, we consistently see leadership teams failing to tackle this phenomenon head on, ultimately contributing to the problem and making it worse. Those that turn a blind-eye to the “soft stuff”, the cultural impacts and disruption of the informal and formal networks that make business possible will see gaps in critical timelines, increased risk to client relationships, and dropped balls on urgent projects.
One client we worked with recently got it right. Here’s what worked.
Getting ahead of the curve
A large multi-national industrial company had recently acquired another company to enhance the market position of a key business unit. The leadership team of the newly formed entity was wrestling with how to bring the two very different cultures together while meeting aggressive synergy targets within the first 12 months.
They recognized that as a blended team formed out of the 2 distinct and strong legacy cultures, there was little to no shared knowledge and a very short period of time to establish a roadmap together that would build a foundation for the future. They addressed it head-on, capitalizing on the change to go offsite to engage in an explicit, intentional and structured conversation about how to solve for the both the gaps in knowledge as reductions in force were implemented, as well as the culture-clashes that were inevitable in the coming months. While they knew they wouldn’t come up with all the answers, they also knew that without the conversation, the merger may fail to fully realize the expected value.
To tackle this, the leadership team pursued three critical questions. How will we define a shared culture? How will we enable communication within and outside of our team? How will we cover the capabilities and connections we may have lost in the restructuring?
Nailing the culture question first
What came to light in the process was the realization that they fundamentally disagreed on what each considered critical “must haves” in the future culture of the new entity. This “aha”, which at first felt discouraging, led to a healthy debate about points of agreement and disagreement that ultimately resulted in a powerful statement about the culture they could all get behind and believe in as leaders. Like the proverbial bubble in the water mattress, if they never intentionally surfaced it, this issue would have come up again and again as they attempted to integrate the companies.
Communication as currency
Knowing that the organization would grind to a halt if there was a vacuum of information, the team focused their attention on the very practical discussion of how they would share information internally and with clients. To get there, it was essential for them to build operating principles as a team so they were in lock-step on how they would communicate with each other in a timely way, manage questions from clients and employees, and communicate a shared vision for the combined company’s culture and potential in the marketplace. This work came together quickly in the session because they had already done the hard job of wrestling the emotional issues around legacy beliefs, practices and cultures to the ground. The job of codifying and operationalizing their agreements became a natural next step.
The buck stops with leadership
Lastly, they turned to the task of covering the organization gaps and loss of working knowledge resulting from staff reductions. The team acknowledged together that after they left the relative comfort of the offsite, they would disperse globally and confront the challenges of getting work done with teams who felt destabilized, lacked the well-established relationships they once had, and were struggling to continue to produce results against targets.
Example after example was surfaced. An IT Director in Germany who could be relied on to fix any glitch in the CRM would now need to create a “ticket” with the US-based service desk, slowing down sales activities during a busy quarter. The Safety and Health officer who oversaw the manufacturing protocols in Beijing would now have to learn new standards based on combined products and markets. Sales teams from the legacy companies were now bumping into each other in the marketplace and wondering how to reconcile pricing. How would they each navigate? Who had answers to the myriad of questions this raised? Not only had their operating models changed, but they no longer knew where to turn to get timely information.
At the offsite, the leadership team agreed that until the new pathways were clear, they saw themselves as fully accountable for filling the voids, finding answers together, creating constructive interim solutions and resisting silos. Under no circumstances would they leave their teams to “figure it out”. Each leader identified the most vulnerable, high risk areas where disruption to the organization were most likely, and had preliminary working sessions with partners on the team who they could engage to scaffold the scenario in the short and long term.
The plan worked. In the face of daunting odds, the acquisition is now considered one of the most successful ventures the company transacted, delivering on synergy targets, retaining key clients and internal talent, and ultimately returning significant value to the companies and shareholders. Seen as the “jewel in the crown,” the combined entity continues to drive both top and bottom line growth for the enterprise, with its own unique winning culture.
Getting to your own “winning” culture
This may on the face of it sound like a simple solution, but we have found that getting to this juncture as a newly formed leadership team is no small feat, and putting an idea like this into action takes focus and commitment, which can be an uphill battle in the midst of the turmoil of a merger.
Take a page from our client, who took the bold step of having this purposeful conversation about “minding the gaps” early in the integration process. Convene the new leadership team and focus on this checklist to get yourself on the path to creating a new “winning culture” together in your new organization.
- Use the time before a significant announcement is public to capture the sentiment of the new leadership team. What is their winning aspiration? What do they believe is critical to success? What impediments do they see?
- Convene a conversation to align on the need for proactive accountability
- Uncover the strategic assumptions that exist about the relationships and “ways of working” among and between functions and units that are impacting culture
- Establish the language that describes the strategic purpose and value of the merger or the change in the organization
- Define clearly the aspired culture change that will make or break success
- Clarify the behaviors that have to shift with your leaders, and how they set expectations for employees and empower them to act
- Mine early wins and stories to build momentum
- Help create a communication plan to get the word out
- Get feedback and adjust
You may find it easier to have outside facilitation to get to these kinds of decisions early in the new team’s relationship; there are some powerful techniques to building trust and getting to decision fast that can enable a productive conversation.Whatever path you take to get these, make sure you are part of the solution, not part of the problem when it comes to change and culture.