What are the most common mistakes when blending the cultures of two companies?
Assumptions and arrogance: assuming everyone understands and aligns with all changes taking place, and arrogance in believing the way things were being done is still the best way. Arrogance sometimes develops when there is a company working to integrate a smaller acquired organization. The very nature of the deal often creates this. Without assumptions or arrogance, there’s room to listen and provide the clarity that relevant parties need to move ahead.
In any integration, there’s much to accomplish. What’s the first priority?
First, take care of the people and business right away. Some people may call this “do no harm,” but I’m referring to the immediate steps to avoid reactionary mayhem. If possible, create some breathing room – time to communicate and to share a plan. Establish clear commitments and safe periods (periods of no changes or a timeline of when changes will take place) so that employees can process and understand the situation.
This applies even if there are some tough messages to deliver.
The goal is to minimize uninformed reactions and earn the support of staff for making changes. Programs such as retention plans may be appropriate. Do not forget to address customers and suppliers as well.
Once you grant the acquired company some breathing room, how do you communicate those plans? What did you do with Shearer’s recent acquisition of Barrel O’ Fun?
We made the commitment to not change compensation and benefits plans for one year. The idea was to reassure staff that the acquisition was not about headcount reductions. This created a buffer zone to reduce the need to react immediately. More importantly, this provided the space to engage people in managing the change and creating the transition plans.
Then we organized a leadership summit, which was a forum for legacy Barrel O’ Fun leaders and included top managers from the three plants – general managers, production managers, warehouse managers, and HR managers. We met to learn and discuss the reasons behind the acquisition and the plans for the integrated operating company – the integrated Shearer’s Snacks organization.
It was also an opportunity to build relationships and trust. The two-day event had group meetings and one-on-one sessions for people to get acquainted. Each corporate function presented an overview of its roles and responsibilities. Finally, the participants visited two Shearer’s manufacturing sites.
The detailed systems and technology implementation plan was shared and teams were set up to manage that. The systems integration team comprised legacy leaders from both organizations. And so far, that process has gone very well. Now we’ve moved on to a phase of work called “organizing for performance.” This involves setting up a larger, integrated operating model. In addition to refining and creating new business processes, we are helping people think about their roles differently. We are also aggressively hiring people with experience in larger organizations to supplement those in our legacy operations.
Lastly, the work involves mapping the two-year journey to shape the culture. We believe the integration is a positive path forward with growth and learning challenges ahead, rather than a process of dealing with negative changes.
This article is sponsored by Crowe Horwath. It was published in a supplement with the October issue of pfm magazine.