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Mergers and Acquisitions

Settling in: How to help employees tackle the cultural shift after merger/acquisition

Here are a few factors that play a critical role in ascertaining that employees are smoothly and seamlessly acclimatized to the new environment
Settling in: How to help employees tackle the cultural shift after merger/acquisition
Image credit: Shutterstock
CEO, Mercer|Mettl
4 min read
Opinions expressed by Entrepreneur contributors are their own.

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Mergers and acquisitions (M&A) involve two companies either being consolidated to form a new entity or the smaller company ceasing to exist by forfeiting its resources to the larger, acquiring firm. In either transaction, a new ownership and management structure is established.

While M&As are great growth strategies for brands, they can result in a major cultural shift for employees. These employees often find themselves being pushed out of their comfort zones and take substantial time to get comfortable with the new organization’s rules, regulations and culture. It is, then, the responsibility of the organization to make this transition smooth for its employees.

To that end, here are a few factors that play a critical role in ascertaining that employees are smoothly and seamlessly acclimatized to the new environment:

1. Co-operative Leadership:

It is a fact universally acknowledged that good leaders and managers drive the performance of employees in any organization while aiding team-members to progress in their corporate careers. Managers who work closely with their teams better understand their needs and objectives, and so, can help them in accomplishing their goals. Such a collaborative and participative relationship between managers and employees ensures smooth workability in any and all situations, including an M&A.

2. Transparent Communication Across all Verticals:

Acquisitions, also called takeovers, bear negative connotations in the popular imagination. So, even if an acquisition is a friendly one, employees belonging to acquired companies might perceive the change in management structure as a loss of business vision of their (former) leaders. In such a case, it is natural for them to be doubtful of their future prospects while fearing whether their job roles will be negatively impacted and how.

To avoid such a dubious situation, the onus falls on the HR and leadership team to properly convey to the workforce their status quo, vision, and what they expect from their employees. The most appropriate way of communicating these ideas while also building trust is by holding meetings and business lunches with each department.  

3. Making Employees Feel Valued:

While conducting a merger or an acquisition, company executives must also respect the position and perspective of their workforce. So, by making employees feel that they are actively participating in the transaction between two companies, instead of merely relegated to being one of the assets or a commodity being transacted, will ensure that they feel valued.

By substituting the element of imposition with a motivated partition among the workforce, organizations can forge a long-term association with their employees even under changed circumstances.

4. Leveraging the Emotional Quotient:

Excellent soft skills are at the heart of effective communication skills. The degree of people acknowledging and accepting the message being conveyed depends heavily on the manner in which it is being conveyed. Therefore, leaders and managers must possess, and exercise, qualities like emotional intelligence, compassion, mindfulness, and most importantly, empathy. By leveraging their soft skills smartly, managers can engage employees in effective communication while also developing a strong and faithful relationship across teams in an organization.

Such measures ensure that while an M&A is being conducted among two companies, employees in both organizations feel better prepared and more accepting towards the change taking place. Once employees have a clear idea of the vision behind the transaction and its beneficial effects on their career growth, the transition should be fairly smooth, and will not affect the employee retention rates of the organization.  

As the size of the team increases, it gets more difficult to ensure transparent communication within the organizational structure. However, articulating the unspoken fears of employees and subsequently alleviating them by holding valuable discussions with them can go a long way in establishing effective and reliable credibility for organizational leadership. This, in the long run, can contribute greatly towards seeing the changes accompanying mergers or acquisitions through to their successful ends.

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