Culture changes within organisational mergers

Nowadays organisational mergers are nothing new.  A quick Google search on just about any day of the year will bring up loads of headlines and stories where various media experts, financial journalists and business big wigs will give their opinion on whether the merger is good news or not.

Their take on things is usually based on financial reasons and what the merger will do for the share price.  If it’s a big merger, the industry involved might be affected – even for a little while.  Usually there’s very little talk about the effect on the workers involved in the two companies. You might hear a few cursory mentions of possible redundancies and branch or office closures, but what’s neglected in their articles and interviews is the changes in culture for people who stay in the company.

It’s very rare that two companies involved in a merger – or takeover – have exactly the same culture or values.  They may think they do, but culture is often so intangible it’s practically impossible to match.  People in organisations struggle to put their fingers on exactly what the culture where they work is, they just know it’s not what the organisation does, it’s how it does it.  They will usually say they like it (or large parts of it anyway), and don’t want it to change.

So even the smallest and subtlest of changes can upset the applecart.  For example, what if someone has always liked working in a close-knit team where there’s an atmosphere of fun and a new merger means they’re expected to work in an agile way – away from the office environment without their teammates around them.  What sort of effect would that have on them and the workforce as a whole?  Would they still like the culture and want to continue working at the organisation? Perhaps not.

Of course, the big changes can have a big effect on the culture too.  Any sort of merger usually brings some sort of organisational restructure. Job losses, changes to roles and even where someone physically works from are all things to be dealt with.  They’re all massive cultural changes.  And how they’re managed is vital. They need to be dealt with sensitively and upset needs to be kept to a minimum.  We’ve mentioned in other blogs about feelings and emotions with cultural change, and it’s never more true than in situations like this.

It’s also important to remember that cultural change very rarely happens overnight, so don’t try to force it too quickly.  The culture your people feel comfortable with has probably evolved over many years to get to the point it is now.  Smaller start-ups can just go with the flow and see what happens, but have to establish a culture and their own way of doing things as they get bigger.  Larger companies that are merging don’t have the luxury of going with the flow so careful consideration needs to be given to the culture and what you want it to look like. They need to think about the impact of bringing employees with different cultures together and what it means to work in each organisation.

Leaders wouldn’t dream of entering into a merger without a strong strategy and business case, you need to apply the same rigour to the cultural fit.  The most common and biggest hurdle faced after a merger is the clash of cultures and organisational behaviours.    

In the worst case, a culture can quickly switch from functional to dysfunctional when people start to think about themselves more than the organisation.  This is where good leadership comes in.  A good management team needs to communicate effectively and make sure what they do is totally transparent when they’re changing the culture.  

If there are financial or sector constraints involved, get the message out there so your people understand why things are happening.  The more people are engaged, the easier it is to affect change.

Most mergers don’t make the news, and they certainly don’t have to be bad news.  They can often be just what an organisation needs.  Those at the top need to set the pace and direction about how the changes happen, but without taking the culture of the organisations into account, they can be seen as a something to be feared.