An ever-present reality in the mailing community for over 20 years has been the steady stream of mergers and acquisitions, regardless of the size of the businesses involved.
Across the entire business landscape, 2021 is setting up to be the largest M&A year in history according to financial data reporting companies S&P and Refinitiv. The number of deals alone was up 24% through September.
There seems to be ample advice on how to make an acquisition. But the key to acquisition success is deftly merging the two or more cultures into one and ensuring everyone, from front-line workers to executives, understands the vision, mission, and goals of the new organization.
If your team delivers on these three keys to culture merging, you will realize or exceed the return on investment and financial goals to which you committed:
· Meaningful communication
· Focussed integration teams
· Out front leadership
It is impossible to keep everyone “in the loop” in the time between an acquisition announcement and the moment the deal closes. There is critical information that simply cannot be shared until Day 1 of the combined company.
However, most teams end up nearly shutting down communication and do not share even the basics that are contractually allowed. This can lead to uncertainty, and in this tight labor market, the exodus of key employees.
Lack of communication will often carry over to the integration period and will damage relationships and the company culture.
It is critical to have a clear communication plan and schedule before a deal is announced that includes:
· What information can be communicated
· Who can communicate the information
· When the information will be communicated
“Communicate, communicate, communicate,” said Alison Hall, General Manager of Lineage Mailing Services, which recently acquired Strahm Automation & Mailing Services in Kansas City. “Employees are the key to culture, and they feel unsettled and unsure when no one is talking to them. That is always the case, but especially during an acquisition.”
It’s not just timelines and employment information your team needs to communicate during the acquisition. Clearly outline the organization’s vision, mission, and goals early and often, so new employees have a glimpse into their future with you.
Focused Integration Teams
A method to ensure meaningful communication occurs is to have focused integration teams in place to drive success. Even for the smallest of acquisitions, you should have a dedicated resource to oversee the integration period.
In addition, a core team of three to eight employees from each of your key functional areas (e.g.: operations, human resources, finance, sales, etc.) is the minimum that should be designed before the ink dries on the deal. These employees will do their “day jobs” while contributing heavily to the success of the integration.
If you are managing a larger acquisition with several locations or a multi-national presence, you should consider developing three to eight integration subgroups in addition to the core team. These teams will have a lifespan of 60 days to six months, depending on the acquisition’s complexity.
Teams focused on company culture/human resources, information technology, operations, finance/legal or sales/marketing are the most common.
Examples of additional focused subgroups are:
· Operational Efficiency: A deep dive into best practices at both companies that can be shared and implemented for quick wins. This one is not necessarily about cutting heads, but redeploying resources needed in other areas.
· Revenue Upside: Identifying cross-sell opportunities across the combined customer base of the new company as well as developing new product bundles that catch your competition flat-footed.
Out Front Leadership
It is critical the new company’s leadership team remain visible throughout the process. More is needed than an internal email or video conference the day the deal is announced to ensure a successful integration.
Company leaders need to be in the field to meet and listen to — not speak at — employees of all organizational levels. Working side-by-side the front-line employees is also a nice touch.
“We really celebrated our first day as a combined company,” said Hall. “All our leaders were present from around the country and were able to talk to individual employees throughout the day. Employees talked about the big impact it made and got them excited for the future.”
It’s also critical that directors and managers communicate often with their employees and are visible throughout the process. Setting up a clear plan for company leaders to communicate one-on-one with key employees at all levels of the acquired company will also help ensure a smooth transition.
By following the above critical aspects of culture merging, your company will deliver a successful acquisition — and be able to start the next one before your competition!
Bruce Gresham of Applied Vision Works can be contacted at firstname.lastname@example.org.
This article originally appeared in the November/December, 2021 issue of Mailing Systems Technology.