In Deloitte’s 2014 mergers and acquisitions (M&A) report which was participated by 2,100 corporate respondents, fifty-four percent of the companies close about one in five M&A deals annually. Companies go through mergers for several reasons. However, the main goals for them doing so include acquiring new markets and products as well as increasing profitability and savings through acquisition of talent and technology.
Common issues during mergers and acquisitions
Even with the great number of deals, the way towards a successful M&A is risky. It doesn’t always result in profit. Like any other transactions, there are winners and also losers. The common issues include:
- One employee’s experience/tenure and skills surpass another.
- One corporate culture eclipses another
- Managers battle for resources and power
When M&As are done in an unsystematic way, it can ruin one company or both at the same time. With clear planning, uncertainties are eliminated.
Beginning with cultural integration
Cultural integration is key when heading for an M&A. Without tackling cultural issues prior, implementing strategy is challenging. In the Deloitte report, sixty-one percent of the respondents rated “effective integration” as a top concern.
In merging corporate cultures, target culture should be defined first. This includes reporting processes, shared values and behaviours to guide employees after the merge.
Understanding each other’s culture
The employees and the companies need to understand each other’s culture. Companies will fail to keep the best employees without this sensitivity.
Implementing Team Building
When teams are already acquainted with each other, leaders can further help with the transitions through corporate team building that imparts practical ways in order to figure out how employees can work together. For example:
- Volunteering together
There are organizations that organize philanthropic team building activities to combine giving back to charities while creating teamwork.
- Assigning culture ambassadors
Representatives from the two companies visit their counterpart’s offices bringing gifts and asking questions from colleagues. This helps teams realize that their counterparts are not too bad after all while getting involved in each other’s culture and business processes.
- Painting walls
Merged employees should be allowed to do some redecoration of the new office to get them feeling valued and important at the acquiring company.