‘We cannot look at inclusion right now – we are only two weeks’ post-merger. We need to wait for things to calm down.’
A statement that is heard all too often – and yet the reality is that there may never be a better time to ensure the new culture that a merger brings, carries with it a thread of inclusion. Success depends upon how inclusion is perceived within an organisation; to put into context, inclusion is not simply the new name for diversity. Inclusion is creating an environment where everyone can excel, can be heard, can be engaged. And that’s not as easy as it may first appear.
Inclusion as a Strategic Driver
We have to begin by exploring why the merger is happening in the first place. It may seem obvious, but ensuring clear and consistent messages about the long term payback makes a major difference to our assumptions and the decisions that may be taken along the way. It’s simply not powerful enough to send out a CEO announcement by email, or even post a short video, however well intended that intervention may have been. Everyone has to have the opportunity to debate and discuss the merger in a positive sense and this means making inclusion a strategic part of any M&A Strategy. Engagement is rapidly accelerated when companies invest in short hour long webinars that offer a consistent and fast paced approach to the challenges and opportunities, keeping all staff engaged and clear about the imperatives and the overall business benefits.
Celebrate the Differences
It’s inevitable that when organisations come together, they are constantly judging each other’s competence at both an organisational and individual level based on the ‘brand’ of the legacy organisations. One party might assume that everyone in the legacy organisation is technically excellent – the other might see their new peers as ‘fly by night’ consultants. It’s often easy to overlook real talent and be distracted by the myths that come with the legacy organisation – how their people dress, walk and talk for example.
In these situations, it’s important to respect and celebrate the past – after all the businesses have been brought to together to deliver excellence from both parties. We need a clear sight to not allowing ourselves to be hijacked by assumptions and bias during these processes. One practical way of addressing this is set yourself some rules. Before you react with ‘this is how we used to do it’ or make to say ‘I’m legacy X..’ stop yourself and ask yourself what the reality and payback of those statements really are.
The Fear Factor
Due the hardwiring of our brains and our inbuilt safety mechanisms, we are not designed to automatically bring people that we either consciously or unconsciously consider to be ‘other’ into our group. Quite the opposite in fact – we have a whole legacy system of early warning bells that sound when we are alerted to someone of a differing race, style, sexual orientation – or legacy organisation.
Couple this ‘alert system’ with the likelihood that no matter how well handled the merger, people still have fear – their job, their livelihood, their standing – fear that may reside in their unconscious mind, sending messages that drive often unrecognisable behaviour. Delivering a strong and authentic message of inclusion at this critical stage can enhance confidence and rebuild lost self-esteem.
Creating an environment that is truly inclusive doesn’t mean that every project has to have an equal mix of people from both companies either! it means that we are taking clear strategic business driven decisions about which teams work on which projects to make the most of the new strategic culture.
The Talent Trap
Appraising talent post-merger is an area that is potentially riddled with bias. Often mergers happen as organisations want to add geographical advantage to their current portfolio. This makes strategic sense, however if we’re not honest about the potential bias in a larger organisation’s talent pool, it can decimate what we believe we’ve inherited within two years of the merger.
Insurance companies looking to expand their geographies through mergers and acquisitions would do well to take a hard look at the talent pool across both organisations at the earliest opportunity. We must recognise that we need different brains and different approaches, specifically in different cultural environments such as Asia. Global insurance businesses must learn to integrate and manage diverse teams across geographies in a fair and totally consistent way to achieve the best possible business results post-merger.
And let’s not forget the Clients!
The client bias about the acquiring organisation is easy to overlook as we focus on the practical delivery of bringing the businesses together. The clients may worry whether the new organisation will continue to provide the prices and services in the same manner they have enjoyed – or whether they will deteriorate as employees leave or are distracted by the merger itself.
In spite of the benefits that merging organisations seek to initiate, client loss is still a possibility that needs to be addressed. The bias that your client may carry about an acquiring or merging partner can affect how they see the next tender, approach or deal. If there has been no attempt at creating an inclusive environment for your teams, then they may still be presenting their own legacy, perhaps making oblique references that they are not enthralled or in full support of the merger. This can then play to the client assumptions and ultimately cost you the business.
Best of Both Worlds?
It is hard to imagine a post M&A Strategy that would not have been enhanced by creating a culture of inclusion in the post-merger months. Longstanding experience of partnering with organisations looking to create post M&A cultures has most often seen the ‘Best of Both Worlds’ approach. Deciding what parts of the culture made the most people ‘happy’ and declaring it via ‘Mission Statements’ and ‘Culture Relaunches’ has to this point been the order of the day for many organisations.
This approach may have been at best ineffectual previously – today it is strategic suicide. In the 21st Century – with the flexibility, globality and technological capability coupled with constant demands for new products, new markets, new routes to market, new clients with their own new and changing needs – our cultures must be the drivers of our new post M&A strategies. It is hard to imagine a scenario where inclusion would not be a critical piece of any ‘Brave New World.’
Waiting for things to ‘bed down’ may be missing strategic advantage. Simple messages and workshops around inclusion and unconscious bias can drive away unrealistic assumptions around legacy organisations. Programmes of more depth may also ensure more robust decisions around talent selection, post-merger appointments and an assurity that things are done in a more transparent way.
Waiting until things have ‘calmed down’ may initially seem to be the best approach. But although things may seem ‘calm’ on the surface – the toxicity of hidden biases and assumptions, if unaddressed, may be sowing the seeds for issues for many years ahead.