Debby Routt is Chief People Officer at Marathon Health.
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Mergers have become a way of life for corporate America. When two companies merge, one of the priorities is keeping the businesses operating and delivering value to customers. Another priority, which I believe is the most important, is to humanize the merger. Throughout our company's recent merger, it has been our goal and guiding principle to keep employees engaged and excited about the merger, the combined value it brings and future career opportunities.
If there is one takeaway I’ve learned throughout my experience with mergers, it is to never underestimate the power of culture. In our current merger, for example, the two organizations couldn’t look more similar on paper. From the outside looking in, you would think both company cultures would align seamlessly, but when you get in and see how they really operate their businesses, from process and systems to vendors and approach, the two organizations couldn’t be more different. All the operational decisions that have made both organizations who they are today are steeped in culture — both great cultures, but both tied to emotion, pride and a strong sense of ownership. These are all difficult things to overcome as you look at unification and what is best from both organizations to bring to the new organization. While it is difficult, it is important to acknowledge that while both organizations have their strengths, they might also have some blemishes.
So I learned to never underestimate culture. While it may appear that two organizations are perfectly aligned, you need to dig deep when having your cultural discussion. It won’t change the decision to merge, but it could change how you merge. Based on my experience, I've compiled five key considerations for success that are important for HR and company leaders to keep in mind when taking on a merger.
1. Put people first.
By looking through the lens of your employees, you will have a greater understanding of risks. It is important to assess any potential hurdles in the road in order to determine the actions needed to resolve them. It is also important to ensure that while employees might not be involved in planning the details of the merger process itself, their needs must also be considered. Developing a communication plan and surveying employees to have a pulse on their reactions are techniques we have found to be helpful.
2. Anticipate change.
Change is a constant, but how it is received is a variable. While change is guaranteed, the level of impact the change has on employees individually and as a whole, should be considered. Recognize that employees will be feeling those changes on a daily basis. To better support your workforce, consider what employees need in order to do their jobs amid uncertainty. Adapt and create a change management strategy with an emphasis on employee communication and involvement.
To help our own employees manage change, we have been using the Change Cycle, a model that helps create self-awareness of emotions during six stages of change. This model uses the colors of a traffic light to help employees identify their reactions and feelings during each stage.
Supporting all employees is important. Implementing a model such as the Change Cycle can provide employees and company leaders a powerful tool to help navigate the roller coaster of reactions to change. Ensure your leaders are having conversations about how change is impacting everyone and working with employees on how to address the emotions that come with change.
3. Communicate and overcommunicate.
Say it once and say it again and again. When you’ve established a change management strategy that puts people first and helps them get comfortable with change, the next step involves creating a special communication program that is timely, grabs their attention and sets expectations. Keep employees informed and engaged with regular and creative communication. A few tactics we have found useful have been consistent biweekly emails to all employees, regular town hall meetings and companywide surveys. As a result, we can maintain a great workplace and continue to make a difference as we hear from employees.
4. Be transparent.
Mergers are hard. They require change from employees and company leaders alike. Maintaining transparency throughout communications is crucial. Create a joint workforce that is built on trust and openness. From this, leaders can generate better decision-making and activation of core values shared throughout the company.
5. Get buy-in on all levels.
Mergers are not driven by HR teams or leaders. Effective mergers are driven by everyone. There should not be winners or losers. To do this, incorporate a change model that is easy to understand and that employees can embrace. By operating authentically and transparently, companies more easily gain the support and loyalty of the entire workforce.
During the process of a merger, it can be easy to see it as simply that: a process. Instead of conceptualizing the change as a mechanical or technical process, it is important to incorporate a human lens. Put people first, and consider cultural fit, as well as company values, every step of the way.
Each of the five steps above incorporates the "human" aspect of mergers. Whether companies are merging to grow financially, to stay in business or to expand geographically, HR must partner with company leaders and work together to create an environment and culture that encourages employees to ask questions, give feedback and grow alongside the company. When this happens, I believe the merged company will succeed with a more engaged workforce, satisfied customers and successful operations.
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