Corporate culture and poorly managed mergers: When an integration feels like an acquisition, employee resentment is inevitable.
When managing a change as disruptive as a company merger, one cannot underestimate the impact of seemingly minor or inconsequential changes. That is to say; minor changes often aren’t.
When I was appointed to change-manage the merger between two Information and Communications Technology (ICT) companies in South Africa, the exco anticipated that the focus would be on integrating products and services. The ultimate goal was a move on the bottom line and increased market share. What we came to realise, however, was that a lack of empathy towards stakeholders dealing with more minor changes would lead to more resistance in adopting the larger ones.
As mentioned before, the change being managed was a merger between two large ICT companies. Changes of this scope are often plagued by issues of egotism, leading to situations where the need to be right trumps the need for a smooth transition. This change was no different. The impact on the stakeholders was colossal. There was a mixture of excitement between what was possible and anxiety around what would be lost. The larger and older of the two organisations had a multi-generational staff contingent – more experience generationally and also more set in their ways. The other company, while smaller, was younger, more agile, and more adaptive. In an ideal world, the merger should have been a unification of these two cultures into a new one. However, a lack of foresight by the sponsors meant the stakeholders viewed the merger as more of a takeover. The older company’s culture dominated and bred resentment. As a result, many opportunities for smooth integration were not embraced.
That is not to say that the change was a failure. What the sponsors lacked in empathy, they made up for in engagement. The sponsors were incredibly focused on engaging with their stakeholders. While this sometimes meant focusing on failure instead of celebrating success, they were not unavailable during the change. I was involved in building an extensive network of change champions early on, representing multiple tiers in the organisations. These change champions often had direct access to leaders in the company and could report on the change’s progress and improve processes to enhance adoption.
As change managers, we know that the preferred senders for personal-level messages are the employee’s direct manager or supervisor. In addition to the change champions, we made sure the managers were on board with the change. These were individuals close to the heart of the change, and their support was crucial. It was fascinating as a change manager to see how dealing with a rigid and uncompromising sponsor shaped these leaders and helped forge a bond between them and their team. It was unification through adversity. Through these managers and change champions, the exco team organised regular town halls to update the organisation and help them stay the course.
In the end, the change was a successful one, although not necessarily for the right reasons. It had to be. A company merger often presents as a burning platform rather than a burning desire. Sponsors often begin with the attitude that the change will happen whether the stakeholders are on board or not. And while this may be true in part, it is certainly not the best way to affect adoption. The communication between the managers, the change champions and the sponsors, while crucial in driving adoption, should not be the primary mover of change.
It is my view that it might have been done far more effectively and timeously had the exco been more receptive and empathetic. We were faced with multiple situations where awareness and desire were ignored, to the detriment of the change. A greater focus on ‘what’s in it for me’ would have built desire—the opportunity for skills development, career growth, and product knowledge was ignored. In particular, a lack of empathy on the ‘smaller’ changes meant that a barrier to trust was built between exco and the team.
When managing a change as significant as a company merger, we cannot ignore the keyword here, “merger.” This change is the coming together of two entities to create something new, something fresh. When it feels like one organisational culture is simply replacing another, your stakeholders will inevitably feel that the change is more of an aggressive takeover. Moreover, this short-sightedness is an opportunity missed. Instead of building something new from the best of both organisations, the retention of an overriding culture only entrenches the idea that you are not receptive to change. Not now, and more often than not, not in future.