{"id":51816,"date":"2024-05-07T06:52:13","date_gmt":"2024-05-07T10:52:13","guid":{"rendered":"https:\/\/centricconsulting.com\/?p=51816"},"modified":"2024-05-06T12:55:36","modified_gmt":"2024-05-06T16:55:36","slug":"merging-remote-companies-heres-how-to-get-culture-right","status":"publish","type":"post","link":"https:\/\/centricconsulting.com\/blog\/merging-remote-companies-heres-how-to-get-culture-right\/","title":{"rendered":"Merging Remote Companies? Here\u2019s How To Get Culture Right"},"content":{"rendered":"
According to one study, one-third of acquired employees will leave in the first year of a merger or acquisition. Merging companies can cause uncertainty and stress for employees who must quickly pivot to new organizational norms and policies.<\/p>\n
When the two companies are remote, the M&A integration process can be even more hazardous \u2014 the lack of in-person work can slow down the absorption of a new culture and leave acquired employees feeling adrift and disengaged.<\/strong> A smart integration plan that focuses heavily on culture training, with an initial prioritization on in-person get-togethers, human connection, and small personal touches, can help the merging of remote companies go more successfully.<\/p>\n If two companies have wildly different cultures, the integration period following an M&A is going to be bumpy, to say the least. The study cited above found cultural misalignment to be a main driver of attrition of acquired employees.<\/p>\n To ensure the success of an M&A process with two remote or hybrid companies<\/a>, leaders should understand the cultures at play, including where values align and diverge. How do both organizations live out their culture virtually? How do they ensure employees remain connected and engaged, even though they don\u2019t spend much time together in person? It\u2019s important to explore these questions when first considering an M&A deal.<\/strong><\/p>\n For example, when my company, Centric Consulting, started the process of acquiring a cyber risk management firm<\/a> \u2014 Centric\u2019s first M&A \u2014 it was clear from the beginning that both organizations had cultures emphasizing flexibility, trust and accountability, and both had mastered collaborating remotely.<\/p>\n Almost a year after Centric completed the acquisition of a cyber risk management firm, talent retention remains high. Below are some additional M&A best practices and lessons learned throughout the process of integrating two remote organizations:<\/p>\n When employees first hear about an M&A, their first concern will likely be how the change will affect their daily life and work. Will they still have the same work-life balance? How will they be compensated? Will they be able to retain the same level of flexibility and autonomy? Will there be requirements to show up to an office?<\/p>\n Address these fears as early as possible with transparent, clear communications<\/a> on how the two cultures align and what will remain the same after the deal goes through.<\/strong> \u201cIt makes for a much smoother transition when you can say \u2018We know we share a lot of the same values, here\u2019s how we\u2019ll be incorporating that into our new combined organization,\u201d Kelly says.<\/p>\n But also acknowledge any cultural differences. Even companies that seem to have similar cultures are going to have some subtle \u2014 but key \u2014 differences. For instance, maybe one company is more meeting-heavy, while the other has regular meeting-free days. Or perhaps one company is much larger than the other, which comes with a lot more processes and measurements and a different, often less nimble, way of collaborating. It\u2019s also important to note not all cultural misalignment is negative. The acquired company may benefit from improvements in process and culture.<\/p>\n Think through the small, less obvious ways the two organizations differ and proactively acknowledge how those differences might impact the acquired employees\u2019 work experience.<\/p>\n To quickly get Centric\u2019s new, acquired employees up to speed, everyone attended an M&A culture training session that outlined working norms and core values and helped everyone understand what would be different and what would remain the same.<\/p>\n Related to the point above, as much as possible, give operations managers lead time on policies, procedures and cultural norms. Operations managers at the acquired company will be fielding a lot of questions from their team, and the more you can arm them with insight and knowledge, the easier they\u2019ll be able to address concerns and help employees feel more comfortable with merging companies.<\/p>\n For example, one misstep during Centric\u2019s acquisition of the cyber risk<\/a> group was a lack of communication early on about how the two organizations differed in title structures. As a result, some acquired employees initially felt they were getting a demotion through the deal.<\/p>\nIn Remote M&As, Culture Integration Is Everything<\/h2>\n
M&A Best Practices From a Merger Of Two Remote Companies<\/h2>\n
Lean heavily on culture and lifestyle integration in messaging to employees.<\/h3>\n
Remember, the devil is in the details.<\/h3>\n
Train early on operational processes.<\/h3>\n
Proactively bring people together as early in the M&A integration process as possible.<\/h3>\n