Moments that matter in a deal: Turning ‘them’ and ‘us’ into one winning organisation

August 06, 2019

by Roberta Carter Deal Value Architect

Email +44 (0) 7710 036 054

by Sarah Moore People in deals leader

Email +44 (0)7734 607421

In the latest in a series of blogs focusing on the key moments that can make or break a deal, we look at how to tear down the barriers between acquirer and acquired to create a common sense of identity, belonging and mission.

The deal may have been many years ago, but we all know organisations where the workforce still hasn’t come together. Employees continue to wear the ‘badge’ of their former businesses, form separate networks and favour their own. This corrosive ‘them and us’ impairs motivation, retention and performance. 

Why do these divisions persist? The original wedge often stems from the way management handled and communicated the deal. Without care, the rupture can become indelibly ingrained.

Damaging manifestations of the divide include the assumption that acquisition makes the buyer’s management and employees in some way superior to those in the acquired business. For example, the buyer’s divisional heads might take it as read that the equivalent posts in the merged organisation are theirs by right. They might even go so far as to tell their counterpart “you report to me now”. 

This arrogant attitude is also evident in the speed and insensitivity with which the acquired business is often written off the map. Staff will inevitably see this as disrespectful to their organisation’s heritage. 

United we stand

How then can you bring the workforces together? 

Moment one: Ensure culture is at the forefront of due diligence 

Do your homework to ensure that the businesses can bridge any cultural divide. If buying a start-up with an unconventional way of working, for example, how can you create an environment where the new people feel part of the family and where creativity is nurtured rather than stifled? For example, consider how you can create an environment where you embrace elements of that way of working, encourage new colleagues to share their successes from this way of working and try them in the acquiring business? Also, make sure creativity is encouraged in the acquiring business rather than stifled and make sure the new people feel part of the ‘family’. 

Moment two: Create a common and compelling narrative

Communicate a vision for change that both acquirer and acquired can relate to. If you don’t move quickly to take ownership of the communications agenda and create a unifying and inspirational narrative, you risk opening up a vacuum that can easily be filled with rumour, suspicion and even hostility. 92% of dealmakers in our Creating value beyond the deal M&A report believe they could have handled communication and culture management more effectively during their last deal; once a deal is signed you need to prioritise communication with employees and ensure it is a mainstay during and after. 

Moment three: Respect your investment

Ensure the best qualified people are chosen for the new leadership posts rather than because they are from one side or the other, and that this is validated by a transparent selection process. Key talent won’t hang around if they believe selection is skewed and they don’t see a future.

It’s also important to be conscious of what might come across as acquirer’s arrogance. Symbolic gestures include going with your leadership team to visit the acquired management in their HQ or factory rather than always expecting them to ‘pay homage’ by coming to you. 

Moment four: Build ownership within the business

Strategy teams lead the negotiations and make the tough calls within them. But it’s also useful to involve operational people pre-deal to help build ownership within the business and develop relationships with people from the acquired company. Ideally, the operational people can take up integration roles post-completion, though it’s important that their non-deal responsibilities are covered to avoid burn-out. 

Moment five: Look ahead, while respecting the heritage 

Highlight common experiences and move forward together. Examples might include publicising the first new staff coming into the combined group.

Respecting the heritage and looking forward aren’t mutually exclusive. Create events that say goodbye to the old businesses and hello to the new. Identify and celebrate iconic features within the organisations. A great example of this was when an acquiring airline waited until the carrier it had bought had made its final flight before changing the logo on its hanger – such symbolism is important.

A merger of people

As we explore further in our Creating value beyond the deal report, what all these moments underline are the vital importance of employee sentiment and cultural integration in determining whether a deal succeeds or fails. It’s still all too common to see the deal parties as predator and prey. Yet, taking this attitude not only creates resentment, it also flies in the face of the deal rationale – why would you buy or merge with a business that you didn’t respect?

by Roberta Carter Deal Value Architect

Email +44 (0) 7710 036 054

by Sarah Moore People in deals leader

Email +44 (0)7734 607421