Caoimhe Keogan is the Chief People Officer of AVEVA where she is responsible for AVEVA’s overall employee experience.
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A large merger or acquisition can leave teams in a bit of an identity crisis. Oftentimes, as the combining companies figure out how to blend their different business practices, teams are also grappling with the process of integrating their unique workplace cultures. Anyone who has been through an M&A will know that cultural differences are acutely felt on both sides, and that's actually a key reason why mergers can fail to live up to performance expectations.
As HR leaders, M&As present us with an opportunity to demonstrate the direct business impact of our role. We have a responsibility to mitigate risks during a merger by providing strong leadership on cultural integration. Using a data-informed and objective approach grounded in organizational psychology, we can build a program that drives thoughtful and deliberate actions to successfully merge cultures. This will result in a feeling of inclusion for all business units and teams, both established and new.
If you're heading into or wrapping up a merger, here are three useful steps for achieving a unified culture.
1. Use objective insights as the foundation of company culture.
When combining teams or businesses, it's vital to understand the underlying values and cultural preferences of the different organizations. You can do this through multiple approaches, such as conducting surveys, interviewing with "company elders" and looking at existing HR data (e.g., hiring, promotion, attrition) from both companies.
It's often the case that the espoused company values, which are typically written on a company’s website, don't tell the full story about its culture. If we consider that culture is how people behave when their leader isn't in the room, talking to both leadership and employees who may not be formal leaders in the management hierarchy can be extremely insightful.
Surveys and data-driven approaches can help assess culture in a systematic way. For example, I've seen a lot of value in using the Organizational Culture Assessment Instrument in a merger situation. This particular tool allows companies to account for employee-led insights, such as the way employees think, their values and assumptions and how they process information. Employees in both companies complete the survey, and leaders can use it to understand the cultural styles in both of the separate companies.
When we used this framework at AVEVA during the 2021 acquisition of OSIsoft, we successfully aligned on a desired target culture for a combined organization. Employees felt heard and that they were able to actively participate in defining a new organizational narrative. Win-win!
2. Focus on cultural similarities, not differences.
When two companies merge, HR professionals often hear about how different one culture is from the other. But after collecting employee-driven data, we can usually determine that the two parties have more in common than originally thought.
At AVEVA, after completing an assessment where employees ranked the original companies on eight possible culture styles, we discovered both workforces described very similar cultural values. In fact, the top two ranked preferences were the same: a relationships/people-oriented culture and a results-oriented culture. This led us to conclude that there were more similarities than differences, and the key to success was focusing on the areas where we agreed.
To capitalize on those shared priorities, we carried over some very people-centric policies from the heritage OSIsoft business. For example, we adopted Summer Fridays, a discretionary program where colleagues can take up to four additional Fridays off during the summer months without using PTO. We also introduced three annual volunteering days for all employees so they can give back to their local community (and improve their own well-being) on AVEVA’s time. This is how we began to demonstrate our commitment to a people-first culture.
3. Capitalize on timing to define a new set of shared values.
It might seem easier to have the smaller company assimilate to the defined culture and values of the larger company, but it's not always the right approach. This is particularly true if the acquired company is fairly substantial; with the AVEVA and OSIsoft merger, for instance, OSIsoft employees made up almost one-third of the new company.
As an HR leader, alongside the executive team, you can take advantage of this unique moment and redefine the desired culture and realign values, purpose and vision to create a unified new culture. So it's possible the larger company will prefer (or be inspired by) the values of the smaller company. This was the end result for AVEVA. We aligned on a target culture that was closer to the acquired company's, which had historically placed a stronger value on internal relationships and caring for people. Our new values of Impact, Aspiration, Curiosity and Trust are reflective of this.
The transition time after a merger or acquisition gives a company the chance to really evaluate its culture and be thoughtful about defining and managing toward a preferred style. While you can’t always fully control culture, you can try to guide it by embedding core values into all aspects of the employee life cycle.
Conclusion
Mergers and acquisitions don't have to be a time of identity crisis. Instead, they can be an avenue for total identity and culture alignment. CEOs and HR leaders can use an analytical approach to guide and define a new culture built on the similarities between the two merging companies.
Remember that this is an exciting time, and a fresh set of values and cultural aspirations can be pivotal to the success of your newly merged company. As HR professionals, it's our responsibility to take advantage of these unique opportunities so we can make a lasting impact for years to come.
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