While M&A activity has been a pillar of corporate growth for literally hundreds of years now, the uncomfortable fact is that most deals don’t live up to their makers’ expectations.
Arguably one of the main reasons for this high failure rate is a tendency to focus on the financial aspects of the deal rather than concentrating on the people involved. Of course, the finances are very important and may be a company’s main reason for embarking on a merger or an acquisition – but even if this is the case, you give your deal a much greater likelihood of succeeding if you put people first.
Unconvinced? Or perhaps uncertain about how to achieve a people-focused M&A deal? Don’t fret – we’ve compiled some top tips and insider strategies to help you master this vital approach.
1. Compare company cultures
As you approach a potential target for a merger or acquisition, one of the first things you should ascertain is what kind of corporate culture they have.
Poor cultural compatibility is a common factor behind the failure of M&A deals, and you need to be sure that a target you’re considering has a set of beliefs, values and goals that will mesh well with your own.
To help you gauge this, you should conduct a feasibility study. This assessment will analyse both your own corporate culture and that of your target’s, focusing on vital factors like shared values, objectives and beliefs. You can then compare your findings to work out whether the teams from both businesses would be able to work effectively together or if glaring differences could cause serious productivity issues.
Of course, if you do find some contrasts between the two cultures, that doesn’t necessarily mean the deal will fail. In many cases, it may just mean you need to dedicate some time and energy to coming up with workable solutions that will bring teams together and create a positive and collaborative working environment.
However, if you discover some truly stark differences between your culture and your target’s, it may be a sign that you need to think about finding another more suitable candidate for a merger or acquisition.
2. Keep your workforce happy
Arguably the biggest focus of people-oriented M&A is your employees – both your existing team and the new staff members you’re about to acquire. Keeping these workforces happy, productive and motivated is essential, not only for their own well-being but for the well-being of your deal!
It’s an uncomfortable fact of the M&A world that employees often leave during a merger or acquisition, perhaps due to fears that their roles will change or be made redundant or that they will no longer be valued once the subsequent restructuring has taken place.
To prevent increased levels of staff turnover, there are a few things you can do. The first is to designate one or more people to oversee employee engagement and well-being. This person – or people – can become the main point of contact for staff who have questions or concerns about the M&A process and the integration period once it has taken place. Having someone they can talk to about their fears or doubts will help your teams to feel valued and reassured as the deal goes ahead.
Another thing you can do is to carry out a survey to analyse the engagement of your employees. These findings will help you identify and address any problematic areas, especially if you conduct the survey at various points during the integration journey.
Finally, to help raise morale and bring your existing and new employees closer together, you can arrange some enjoyable social events and team building activities. When people have fun together and learn how to work with one another in an a low-pressure, fun-filled environment this has a positive knock-on effect on workplace camaraderie.
3. Don’t forget the stakeholders!
Mergers and acquisitions are complex and sometimes intimidating processes that require diligence, patience, flexibility and fortitude in varying measures. Along the way, it can be worryingly easy to forget about your relationships with your stakeholders, both current and newly acquired.
However, this could be to the detriment of the deal, so it’s important to dedicate some time and energy to ensuring clear and transparent communication with all stakeholders involved in the deal. After all, they quite literally have a stake in the M&A process, so they need to be kept abreast of all the proceedings and their input should be carefully considered and respected.
4. Prioritise customer retention
Last but by no means least, it’s time to consider your customers – again, both existing and new.
During a merger or an acquisition, it’s not uncommon for some customers to feel uncertain or even unhappy with proceedings to the point where they may decide to take their business elsewhere. To prevent this happening, you need to engage in clear and positive communication with your customers and demonstrate the ways in which your merger or acquisition will benefit them.
For instance, perhaps they will now have access to a greatly enhanced range of products or services that you couldn’t provide before. Perhaps they will benefit from more competitive pricing or be able to take part in new rewards programs.
Communicate these advantages openly and consistently throughout the M&A process and beyond to ensure you retain that valued clientele.
Need help with your acquisition?
If you’re feeling a little intimidated about the prospect of mastering people-centric M&A – or any other aspect of the acquisition process, for that matter – please don’t worry. Why not give our friendly and highly experienced team a call?
Harris Acquire has overseen many successful acquisitions from start to finish, drawing on our extensive expertise to generate value-adding deals while removing any stress or hassle from the process.
What’s more, we’re currently offering an exclusive Acquisition Finder pilot service that includes a 30-day money-back guarantee for your peace of mind.
Keen to find out more about our comprehensive acquisition services and how we can help you? Just pick up that phone and dial 01926 757100 or send a query to Hello@harrisacquire.com!
