Your Guide to Merging Two Company Cultures

Once your M&A transaction is complete, you may think the hard work is done. Yet, according to Harvard Business Review’s 2020 article:

Between 70 and 90 percent of acquisitions fail. Most explanations for this depressing number emphasize problems with integrating the two parties involved.

So, once you’ve evaluated your company’s readiness, identified the right funding partner, acquired Private Equity funding, and completed the business transaction of your merger or acquisition, likely, there is still an uphill battle ahead.

So what are the steps you can take to facilitate a successful merging of two company cultures?

  • Align the vision for the future: When the entire organization is focused on a shared goal there’s a sense of mission or purpose and of collective effort. Setting that vision requires listening to the teams, not only the leadership but the members of the team who actually do the day-to-day work. Not only will you get greater buy-in to the new larger entity, but you may also uncover operational areas that need attention or untapped markets waiting to be explored.
  • Create a new communication cadence: Your existing team may have been friends since kindergarten, but the company you have acquired doesn’t know who you are. To facilitate a successful merger, you’re going to have to change the way in which you communicate. Consider a team-building day facilitated by a leadership & emotional intelligence expert. Open up Friday office hours (in person or on Zoom) for questions and input company-wide. Invite team members to a Slack channel devoted to “getting to know you” facts. If you lead with vulnerability, you can create the kind of company culture where loyalty and buy-in are high.
  • Consider a re-brand: If you’re merging companies, consider the idea of incorporating elements of the branding of the two companies into one new brand identity. The process of undergoing a rebrand brings a professional messaging facilitator into the mix to open the floor to new ways of articulating your company’s message. The process is collaborative and inclusive, and it can help the two cultures feel more cohesive and aligned.
  • Be clear on the org chart: Put the new org chart on Slack or print a giant version out and put it on the bathroom doors; however you want to get the message out there, let the entire company know who reports to whom and where the power lies. Your clarity will bring comfort. Mergers and acquisitions are times of unsettling lack of certainty, everything you can do to reassure all parties that you know what you’re doing and have a plan will help keep the train on the tracks (and the financial engines firing on all cylinders).

The process of merging and acquiring a company is arduous, from funding to negotiating the actual transaction, there are myriad financial and legal moving parts. Yet, those financial and business transactional elements are not the only factors that can sink the newly-sewn-together ship. It’s the leadership and culture elements that regularly bring down merged companies, reducing productivity, creating bottlenecks, and elevating employee turnover. Creating a strategic plan to facilitate clear communication, a streamlined hierarchy, and shared vision for the future can smooth the otherwise choppy and uncertain seas that accompany every company merger or acquisition.

Think your company is ready to acquire? Check out our article on building a pitch deck to get started!