Mergers and Acquisitions are corporate strategy bread and butter, largely due to the enormous profits and rockstar status attained by successful M&As. In reality, they are only slightly less risky bet than Russian Roulette. In fact, the Harvard Business Review estimates that between 70-90% of M&As fail to bring any value or fail completely. ¹ At Resonate, we frequently work with our partners through M&A employee experience (EX) and have seen a large variety of outcomes and causes.
One pattern stands out through all these outcomes. To ensure M&A success and reap the potential benefits, excellent employee experience management before, during, and after the merger or acquisition is vital. The M&A storm is a critical time for EX, and managing EX is the difference between the success or failure of a merger.
At Resonate, we work with partners from care through to professional services during merger and acquisition EX. We have identified four key EX strategies to promote success in M&A through EX.
Align Goals through KPIs
Shared goals are vital. As companies come together, we see conflicting KPIs across teams lead to misaligned goals and wasted efforts as teams work at cross purposes. The consequences of these poor KPIs lead to dissatisfaction in employees as they see their efforts work against other teams and frustration from managers.
This effect is massively amplified during mergers and acquisitions as teams struggle to align their work with the new direction. Establishing cross-team KPIs that lead to complementary outcomes sounds simple, but it is often missed and can have an outsized impact.
Align Goals through Culture and Loyalty
Aligning culture and loyalty is similarly necessary to positive outcomes in M&A, especially when the combining companies are unequal in size. Employees from smaller companies are often profoundly aligned with their company’s purpose. They find the corporate environment can stymie their strong sense of family loyalty. While building a sense of purpose towards the organizations goals is vital in a company of any size, ensuring joining employees from small, laser-focused companies feel they can still strive towards a purpose in the larger post-M&A organization will enable the magic that made the smaller company attractive in the first place to thrive in its new environment.
Engage Staff with Transparency
Transparent communication is the key tactic to achieving excellent customer success in any storm. This is even more true for employees. Engaging employees with transparency creates a culture of trust and builds loyalty. Mergers and acquisitions are among the most significant challenges to employee trust and loyalty a company will face and frequently seen as a decision made by out-of-touch executives. Approaching the M&A process from the start with transparent communication to employees promotes trust. It allows employees to understand and own the M&A, rather than increasing the distance between the C-suite and front-line employees.
Monitor Employee Experience and Satisfaction
No matter how well structured and designed an M&A process is, there will always be missed cogs in the machine. Effectively monitoring employee experience through a multi-dimensional understanding of employee engagement and satisfaction builds a bottom-up ‘canary in the coalmine’ that gives the ultimate insight into gaps in the M&A process. It enables quick and agile realignment of strategy through the process and triage of potential issues.
Switching on regular employee experience monitoring before, during, and after conducting an M&A will significantly reduce churn of key staff while allowing the company to successfully combine the magic that led to the coming-together of the two companies in the first place – getting its core resources to high productivity faster.
Talk to Resonate to see how we are partnering with organisations to enable employee insights that make the workplaces of the future less uncertain and more productive.