The importance of culture in blue-collar M&A

Here are some words of wisdom for any profitable and well-established businesses that want to add a blue-collar business to their portfolio: do not under-estimate the importance of company culture.

Unlike white-collar businesses, whose success depends largely on things like branding, technology and office environment, blue-collar businesses have a strong emphasis on culture. Whether the business in question is a manufacturing company, a construction business or any type of service-focused enterprise, it’s the people and their principles and methods that have a big impact.

So, with that being the case, let’s delve deeper into the role of culture in these types of businesses and how the strength of a target’s culture (or lack thereof) can influence an M&A deal.

Along the way, we’ll seek to provide interested investors with some crucial insights on how they can prime their own blue-collar acquisition for success.

What a positive blue-collar culture looks like

Let’s kick things off by exploring some of the common qualities that make up a robust blue-collar company culture.

1. Employee engagement: As we’ve already mentioned, employees are the beating heart of blue-collar businesses, and companies with a positive culture are those that value their staff. In particular, knowing they have a voice and that their views are understood and taken into account is of real importance to frontline workers.
2. Safety and well-being: Many blue-collar roles involve significantly higher risks of injury or illness than white-collar positions. At the same time, blue-collar jobs also tend to involve working long hours for relatively low pay. This combination of factors can result in high levels of stress and a raft of physical and mental ailments ranging from broken bones to strained muscles, breathing problems, and depression and anxiety. As a result, a strong focus on improving levels of safety and employee well-being is crucial for blue-collar businesses and this should be a priority as you explore targets for acquisition.
3. Adaptability: Blue-collar businesses often operate within markets that experience sudden and potentially dramatic changes – whether in technology, methodology or legislation. Consequently, any business worth its salt has an adaptable approach, embracing new innovations and investing in the skills and knowledge of its workers.

These are just a few of the vital traits that make up a successful blue-collar company’s corporate culture. In short, as you approach your acquisition, you should be on the look-out for businesses that showcase these qualities, and which champion their blue-collar workforce. Businesses that do so are likely to be much more successful, not only in terms of revenue but other important factors too, such as employee retention rates and productivity.

How to assess culture during due diligence

Once you’ve narrowed down your list of blue-collar targets to one that you would like to acquire, it’s time to do your homework. Due diligence is a critical part of the M&A process that involves assessing a target from every possible angle to work out if it really is a feasible investment with promising synergies and growth opportunities.

This means you’ll be scrutinising everything from its contracts to its financial statements and its infrastructure. However, at the same time, you should also be sure to carefully assess its culture. Here are some top tips to help you evaluate the strength – or otherwise – of your blue-collar target’s corporate culture and values.

1. Employee feedback – the best way to work out a company’s culture is to get the answers ‘straight from the horse’s mouth’. To do this, you could conduct some informal discussions with its employees – or even ask them to fill out a survey or two to gain their feedback. These surveys could include questions about what changes or improvements could be made to help you make a holistic success of the acquisition.
2. Retention rates – analysing employee retention rates can be a real eye-opener and is arguably one of the clearest indicators of how a business treats its staff. High levels of turnover is often a sign that a company has cultural issues that need rectifying.
3. Leadership behaviour – it’s not just your target’s workforce that you should assess; it’s those who occupy the leadership roles. After all, they are the ones who dictate the culture and set the tone for the entire staff. Scrutinise their leadership style and practices to see if they make their team feel heard and valued – and to see if there is room for improvement.
4. Training and development – if your target shows a clear commitment to helping its staff to develop and learn new skills, this is a very positive sign. Businesses that provide opportunities for career development are more likely to have a strong corporate culture and a clearer growth trajectory.

Nurturing your blue-collar

If your acquisition target turns out to be a promising investment and you complete the deal, it’s important to nurture your purchase’s culture post-sale.

There are a few different strategies you can employ to do this. They include:

Prioritising communication

Having open channels of communication right from the get-go is crucial. Your new employees need to feel that they can easily have their voices heard, and that any questions or concerns will be responded to promptly. This helps to put your acquisition on the right track immediately. Prioritising clear and transparent communication is also vital for ensuring your new company operates effectively even during the transition period.

Celebrating achievements

Start as you mean to go on by celebrating the accomplishments of your blue-collar employees. Whatever they achieve in those first days, weeks and months of the acquisition, be sure to recognise and reward them for their efforts. This fosters an atmosphere of productivity and motivation that will place your new company firmly on the road to success. What’s more, doing so will help your new team to trust you and your leadership.

Reinforce workplace safety

As we’ve already mentioned, safety and well-being are major concerns for many blue-collar workers (understandably so). Consequently, it’s a good idea to bolster the health and safety protocols of your new acquisition and create as secure and nurturing an environment as possible. Not only will this reduce any physical and mental risks, but by showing your employees that you are committed to their well-being, you automatically help to foster a positive culture for everyone concerned.

Involve your employees in decision-making

Wherever possible, you should include your frontline workers in the decision-making process. After all, they have plenty of invaluable experience and expertise to share, so you should draw on their insights wherever possible. Doing this also helps to create a culture of trust and empowerment, which will have many positive repercussions on the day-to-day operations of your new business.

Why hire a business broker

Acquiring a blue-collar business offers you ample opportunities for growth and profit. However, the success of your deal will hinge, to a certain extent, on the underlying company culture. As a result, savvy acquirers will prioritise the evaluation of this culture in their due diligence assessment. What’s more, they will also pour time and energy into ensuring a smooth and positive transition process once the contracts have been signed.

Because this is such a crucial and complex task, it may be worth your while to hire an expert to assist. A reliable and experienced business broker can offer invaluable insights on how to carefully analyse a target’s culture – as well as its other vital qualities. What’s more, a broker can provide you with top tips on how to ensure a smooth integration post-sale.

Finally, a business broker can also oversee every other aspect of your deal, leaving you with more time and energy to pour into planning the next chapter and how to make it work.

Here at Harris Acquire, we understand the importance of ticking every box when it comes to acquisitions, whether you are buying a blue-collar business or not. As a result, if you’d like to give your deal the best possible chance of succeeding, why not let us help you along the way?

To find out all about our comprehensive services – including our 30-day money-back guarantee – give us a ring on 01926 757100 or send an email to Hello@harrisacquire.com.