2. Apply workforce-related metrics that go beyond cost reductions
Despite the significant impact workforce integration has on the overall success of the deal, there are virtually no measures around this factor in deal planning and synergy target-setting, other than to assess this component for the potential of cost reductions.
To map a route to more successful integrations, deal planning should include metrics that assign values to the human capital impact of the deal, along with targets that incentivize strategies beyond cost reductions. After all, if it is measured, it is more likely to be managed.
Measurable factors may include human resources investments and operations, total rewards, labor relations and negotiations, organization design and talent strategy, employee experience as well as necessary investments in change and cultural management.
With the powerful analytics tools that are now available, identifying and assessing financial values and potential change impact are more easily at hand than ever.
3. Align and articulate a new shared purpose
Successful acquisitions occur when there is alignment of purpose. Founders are more enthusiastic about the potential upsides of a merger, and key employees are more likely to endorse it. However, the power of purpose is too often overlooked in favor of more conventional integration preparations.
In addition to financial diligence, boards and their leaders should invest in identifying the purpose and value proposition for both organizations pre-deal, starting with a clear understanding of the purpose of each entity and then seeking alignments. The ability of leadership to articulate purpose can have a dramatic impact on employees’ willingness to adapt to the new culture and unleash their full capabilities to fulfill it – to the benefit of both customers and the business.
4. Be intentional about culture
Every organization has a unique workplace culture, even if some are more intentional than others. The culture often reflects the unique personality and motivations of its people, while anchoring their focus and actions to specific outcomes, such as quality, innovation, brand building or outstanding customer experiences.
Leaders of successful integrations take time to understanding the existing cultures of the two organizations. They also take one additional critical action: they step back and assess what kind of culture will best support success and growth for the new organization.
Being intentional about the choice of culture that best suits the business and its objectives, and then identifying where the two existing cultures do and do not reflect that new culture, will help leaders close the gap.
They are then better able to make strategic decisions around new operating processes and structures, rewards, new leaders and more, minimizing culture collisions and more successfully reinforcing the new culture throughout the organization. Not only is the organization better focused in its decision making and strategic activities, it is better able to retain key employees. Employees are more likely to stay in a culture that has clear purpose and a vision that is connected to their daily experiences.