4 ways mergers and acquisitions can transform your company

The views expressed by the contributing Entrepreneurs are their own.

Not all mergers and acquisitions (M&As) end. In fact, 70-90% fail, mostly due to an inability to identify the right adaptations to acquire or the best ways to incorporate them.

Maybe that’s why we hear such horror stories: A corporate takeover where people from the acquired company are waiting for the other shoe to drop. I understand that perspective. One company takes over another and holds in its hands the livelihoods of its employees—their careers, culture, and security—with a high risk of failure.

But I also know how being acquired by another company can lead to amazing results for professional development. I am a living example of this.

Over the past two years, my firm has acquired a number of companies in different regions to accelerate our growth, each with their own client portfolios, industry expertise, and merger timelines. Integrations have many moving parts, but are rich with learning opportunities for the next integration. My experience on both sides of M&A has taught me that each company must deeply understand the other company’s values, culture, and decision hierarchy. Equally important are the people who are part of the integration team. Those in the kitchen need to be open to building trust as soon as possible to ensure the integration goes as smoothly as possible.

Related: Why prioritizing corporate culture is key to a successful acquisition

1. Align values

I joined CI&T six years ago when they acquired my company. I was an HR Director at a small advertising agency with many financial services clients. We had been courted over the years by companies interested in acquiring us, but they weren’t the right fit as they were more interested in our customer relationships than our people. Our CEO believed in putting our people first and it was important to him that I be close to those conversations.

When we met CI&T, they were interesting — even though they were based in a different country. They immediately struck us with their realness, honesty and transparency. We felt their values ​​in every interaction and could tell that their involvement would make us better.

Related: Are You a Leader True to Your Values? Here’s how to align your leadership style with your values

2. Transparent communication

Communication is how we keep everyone aligned and engaged. We have a meeting every Wednesday with each acquired company led by the integration leader from “their side” to provide updates on progress on various fronts — such as integration timeline, branding, benefits, new swag, etc. . we give shout outs to people who were instrumental “in the kitchen”.

Even if the news is the same as last week, we confirm that things are on track and if things are delayed, we explain the dependencies. If we expect something, we just say so. Our goal is to make sure people are informed every step of the way. Absolute transparency is key.

Related: This unique leadership model will transform your business and ensure success

3. Understand the culture

Understanding a company’s values ​​requires more than a slogan — we need to understand the lived behaviors that reinforce the values ​​that make up the culture every day. How do they hire, reward and recognize people? How do they make decisions? What programs or rituals reinforce them? Where is Friday afternoon? If they say they promote from within, what is their average tenure? How do they celebrate people and milestones? What’s the banter in their internal chat channels? What are their D&I metrics? Who is on their leadership team? What is their T&D budget?

In most M&A due diligence, many processes overlook corporate culture. It’s understandable: Culture doesn’t show up on paper, and CEOs of acquired companies may not describe it objectively. Let’s face it – they’re not the ones to ask. But not understanding the other company’s culture makes it easy to make a mistake. Like dating the wrong person — those little things we ignore early on turn into bigger deals over time. Before long, we can’t get past what we used to overlook.

Not to say that both cultures must be identical for M&A success, but we should understand the differences and how to address them purposefully. For example, at CI&T, our culture is a learning environment, which means we bring lots of people to our meetings on a daily basis so they can listen and learn. It is not uncommon for a meeting to have over ten people, but only half actively contributing.

At first, this confused one of our acquired companies. The hiring philosophy was to hire only experts and bring the necessary people to the meetings. When we explained our culture, we decided together which meetings would have the most bandwidth for our approach. Yes, we discussed and agreed together on how to integrate their approach with ours. Flexibility to change is a good sign of a smooth transition.

Related: 7 Deadly Sins of M&A Negotiations

4. Bring in the right people

Understanding the values ​​and cultural differences of a company from the beginning makes it easier to write the right communication plan and approach an integration. Including the right people should be more than an afterthought. They should be an integral part of the M&A process.

HR often has a better feel for the pulse of an acquired company’s people and can provide a more realistic and objective picture of its values ​​and culture. Ideally, HR leaders on both sides are willing to “get real” very quickly.

Perhaps many M&A attempts fail because understanding deeper aspects of a company, such as values ​​and culture, requires the right people involved – not entrepreneurs, not salespeople, but human “people”. Even at the end of the acquisition, HR has a role to play in the preliminary discussions — even more so for me as an acquired employee who has found success in my new role. I can assure the new acquisitions, “Hey, you can trust these people.” I will be honest that the process will not be easy, but these are good people and facing these challenges together makes us all better.

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