4 key ingredients for success
More companies were active in mergers and acquisitions (M&A) last year than ever before. All the while, employee expectations of care, individualism, and the role of work in their lives evolved. Competition for talent became fiercer. The labor market tightened and retaining key talent became an imperative. As social norms have shifted and employees demand a more human corporate culture, successful acquirers are sharpening their approach to the people-centric aspects of integration.
With overall economic uncertainties continuing, the role of an employer to provide stability and transparency to its workforce intensifies. Similar pressures are felt from the customer base. M&A transactions by their very nature are notorious for creating ambiguity in the workforce and pain points for customers. This further emphasizes the need—now more than ever—to take a people-centric approach to M&A integration.
Based on recent pandemic-era M&A integrations, we have identified four key ingredients for a people-centric integration.
1. Guardrails vs. mandates
Design the integration program structure and governance model to empower working group leads and foster a high degree of collaboration. While the program office should be very prescriptive in key fundamentals surrounding timeframes, the proper level of planning detail and quality of deliverables, flexibility should be granted for the way the work is accomplished. If done well, the program office provides clear, effective communication surrounding must-haves and expectations while leaders flourish in an autonomous, trusting environment.
For example, a company could use a traditional method for integrating areas such as finance or compliance. Yet it may opt for more dynamic, Agile approaches for customer-focused roles to keep innovation and the customer experience front and center during integration.
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2. Persona-based pathways
To execute on a people-centric M&A integration, develop and align parallel integration paths based on customer personas. Personas are fictional characters that represent the thoughts, emotions and requirements of different customer groups.
Co-create personas across the enterprise, recognizing that multiple business units and channel engagements would impact customer experience. Then use these personas to understand how to best communicate with each group. Track how their requirements evolve throughout the main integration phases to adjust as required.
- Legal Day 1: when the two companies become a joint legal entity.
- Integration preparation.
- Reimagined Customer Day 1: when the companies begin to operate as one under the new brand.
- Sustainment: as employees adjust to new ways of working and prepare for business as usual.
Communication influences how confident internal and external stakeholders are with the organization’s decisions. This includes style, timing and the information shared. In our integration work with clients, we find that leaders build trust through their communications when they balance the following considerations, approaches and styles:
- Proactive vs. reactive: Find the balance between alerting stakeholders of issues and taking time to get more information. Don’t call attention to items stakeholders don’t need to spend energy on.
- Transparent vs. over-communicating: Use personas to understand what information different people need and want. To avoid overwhelming stakeholders—and risking them becoming disengaged—don’t share too much at once.
- Strategic vs. tactical: Customers want to know why companies merge or acquire. Employees want to understand the M&A strategy and their role in it. However—at certain points—all they need is clear, direct messages about what to do.
- Controlling the narrative vs. letting it control you: Sometimes, it can take just one social media post from a customer to start questioning integration activities. Assess through social monitoring reports and responses from larger sample sizes if the feedback is accurate. Acknowledge and empathize with the feedback. Share more context and what the company is doing to enhance the experience.
- Respectful of the past vs. looking to the future: Respect the company legacy as you build the bonds between employees and the new organization. Employees may resist integration if they feel the company they love is dissolving. Show them it is growing into something better.
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Managing M&A-driven change with a people-centric approach is key to keeping customers and helping employees succeed in the new organization.
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3. New experiences require new ways of training
Customer and employee experiences are undeniably linked. Of today’s leading firms, 60% link performance reviews and compensation to customer experience outcomes.1 As companies look to deliver a differentiated post-merger customer experience, they need to rethink their learning and development programs. By adopting augmented and virtual reality technologies into their training programs for example, companies can provide a fully immersive and risk-free environment for employees to learn. It also allows for more customization of training, further demonstrating a company’s commitment to the individual needs of its talent.
Customer requirements will continue to redefine the skills necessary to meet business goals. To facilitate a successful integration and prepare for the future, companies should:
- Look at existing skills to retain talent, cultivate future skills and flex the workforce.
- Build new capabilities in a supportive, fast-paced environment. In doing so, recognize that integration efforts can increase employee fatigue.
- Shift from fragmented, in-person learning to flexible, always-on learning. This democratizes learning, while empowering employees to immediately put their learning into practice.
We worked with one client to enhance its systems and nurture existing talent by offering targeted learning programs to its 52,000 employees. By promptly and continually upskilling its workforce — and establishing a culture of lifelong learning — this company can anticipate customer requirements and develop innovations and new solutions faster and better.
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4. Compassion-first culture
Seventy-three percent of people consider “wellness” essential to brand strategy. But only one in six people feels highly connected, in a human sense, at work. Keep employee requirements at the forefront of your M&A plan to build trust and reduce fear.
Create a compassion-first culture, as companies that design for all components of care have a competitive advantage over their peers. Use a listening engine to better understand your employees, and with the insights, create meaningful employee experiences that mirror your customer experiences.
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Managing M&A-driven change with a people-centric approach is key to keeping customers and helping employees succeed in the new organization. Employees should feel empowered and valued. Customers should feel understood. While it is possible to recover from technical mis-steps during an integration, it is far harder to recover from challenges impacting people.
Please reach out if you want to learn more about how to facilitate a people-centric integration.
Thanks to Tyler Degenhardt, Madison Cooke, Phil Mulla and Srron Graham for their contributions to this post.
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1 Accenture C-level BX survey, 2020.