Years ago, we worked with an entrepreneur to help him prepare his company for an exit. He did all the right things: built and developed a talented team, grew his bench of successors, and partnered with us early to build a scalable sales and marketing competency that increased his valuation. He anticipated that it would take three years to complete a successful transaction. Instead, it was done in just 18 months.
The basis of the merger and acquisition was sound. The seller's services firm brought a real competitive advantage to the acquiring company by strengthening their end product and removing a significant bottleneck to production and growth. At the time of transaction, this deal was a win-win-win:
| Seller | Buyer | End Customer |
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To realize the promise of this deal, however, the buyer's and seller's teams needed to work together to:
- Get beyond the "us vs. them" mentality
- Create a forward-looking vision of what they could accomplish together
- Assess processes and toolkits to determine best practices, then centralize and standardize
The smallest symbol of organizational culture differences was the first sign of trouble. The coffee fund.
Coffee in Office Culture
The seller’s employees had a routine that worked for them. They started their day with free coffee and a touch-base with their colleagues before settling at their desks for largely individual work. The acquiring company, a manufacturer with a more distinct hierarchy, worked differently. They used vending machines and employees were expected to contribute to the coffee fund.
It seemed small, but the change was significant. The seller's employees started off on the wrong foot—they felt undervalued and like they’d had something taken away. They also lost the opportunity to collaborate casually with their colleagues at the acquiring company. By the time the disconnect became apparent to management, a lot of damage had been done.
Could a $.25 problem create a divide in your organization? Not if you are listening. You will never be able to meet all of the expectations of a diverse group of employees, but if you’re aware of their perceptions, you can create ways to engage and align them around things they care about. Perhaps the minor expense of giving both teams something new—donuts and coffee over a daily 10-minute transition huddle—could help to create some energy and remove barriers. There are many ways to solve an internal communications problem, but you can’t if you don’t know about it.
Plan for a Smooth M&A Integration
Never underestimate the amount of discovery, voice of the customer, and employee insights that will be needed to effectively manage change. This takes careful planning that ideally starts before the transaction to ensure as smooth a transition as possible. Launch Team can help to measure readiness, put in place KPIs (key performance indicators) to ensure your transition is on track, and support the hard work needed to ensure the success of a merger or acquisition, both internally and externally.
More resources about change:
- Mergers & Acquisitions: Communication Strategy for a Smooth Transition
- Digital Transformation eBook - insights and lessons learned
