How to Keep Company Culture Alive After an Acquisition

Reader Resource

Position yourself for growth in 2017—join us live at the Entrepreneur 360 Conference in Long Beach, Calif. on Nov. 16. Secure Your Seat »

Having been both an acquirer and the acquired, I’ve seen firsthand how culture can change for the better or worse once a company is assimilated.

When your company is acquired, it will create a sense of fear for your current employees. Nearly everyone depends on a job to survive, and your employees will wonder what will happen to them going forward.

Nervous employees are unavoidable but mass confusion and panic can be avoided. No matter what side of the acquisition you’re on, there are several things you can do to ease the transition.

Related: The Case for an Early Buyout

1. Clarify what’s coming. 

The key to a smooth acquisition is to communicate clearly and often. Clarify roles, benefits and compensation for employees, get to know new employees on a personal level and let them know what they can expect from your leadership style and culture.

Back in 2005, when Sprint acquired Nextel, it looked like a recipe for success. However, many Nextel higher-ups quickly left the company after the merger, because they couldn’t handle the cultural differences between the two companies. If that information had been communicated upfront, the company still may have lost a few employees but a mass exodus could have been avoided.

2. Find your culture ambassadors. 

If you’re acquiring a company, the selling company is bound to have employees who would love to support company culture efforts. Bring these people in to act as liaisons to their organization to speed up buy-in from other employees.

When Facebook acquired WhatsApp, founder Jan Koum did a great job helping his team navigate the Facebook acquisition while ensuring WhatsApp maintained its culture and independence. Koum was able to get buy-in from his team by presenting it as a partnership and arranging a time for Mark Zuckerberg to meet with the team in person.

Related: How This Techstars Startup Got Acquired Before It Officially Started Up

3. Address the important things. 

When more established companies bring startups under their wing, employees of the acquired company want to know what will be lost when their company is acquired.

For instance, when Oracle acquired Endeca, the company’s “no pets” policy prevented Endeca from bringing along its company mascot: a puffer fish. This may seem like a small change but it can be indicative of more disruptive changes simmering beneath the surface.

Be upfront with your new employees about things that will change, as well as the cultural aspects that will stay the same.

4. Assess the talent you have. 

When you bring people on board -- or when your company gets assimilated into another company -- you need to think about the talent you bring to the table. Carefully consider what each person can offer the larger company. It pays to have patience to clearly evaluate your talent before making any rash decisions solely for financial reasons.

5. Develop a robust orientation program. 

This should go well beyond the basics of job titles, compensation and benefits. Include detailed background information about the acquiring company to educate new employees, but beware of treating employees like new hires. Many of them have probably been with the company since the beginning, so it’s important to give them the respect they deserve. First and foremost, make sure they understand the mission, vision and values of your company so they understand how they contribute to the company’s success. 

Whether you’re acquiring a new company or being acquired, a lot of things are in flux. Disparate cultures and new faces in the hall will breed fear if you don’t clearly communicate changes to employees.

By owning up to the challenge of acquiring a company -- or understanding the tumultuous nature of being acquired -- you can ease your team’s fears, ensure a smooth transition and strengthen the parent company as a whole.

Related: Make Your Own Luck and Get Acquired