Mergers and acquisitions (M&A) can be a sticky business. One of the most significant hurdles companies face when integrating companies is the melding of two distinct company cultures. Conflicting cultures can create a toxic work environment, a significant drop in productivity, and a negative perception of the entire deal. Leaders in the M&A space know that company culture needs to be addressed early — and often — throughout the integration process. AMIRA & CO, a management consulting company that specializes in post-M&A integrations, uses a grassroots approach that prioritizes the merging of company cultures during the integration process.
Amira elAdawi, the founder of AMIRA & CO, has extensive experience integrating organizations post-M&A. Her company’s approach combines years of management consulting experience and a “transformation-from-within” philosophy that uses behavioral science to merge company cultures during the integration process. She and her team immerse themselves into the structure of the merging companies, and partner with both sides of the M&A deal — from the most senior leaders to the most junior teams — to co-create solutions that endure. Companies who have experienced this approach are raving about the results, and how this philosophy is proving disruptive to the M&A industry.
Here, elAdawi offers actionable steps to merging company cultures for long-term success.
1. Culture Will Eat Your Strategy for Breakfast
“No M&A professional begins the process planning to fail,” elAdawi states. “However, the crucial role of culture often gets ignored, or at least deprioritized.”
As elAdawi explains, one of the first steps in a successful integration of company cultures is to acknowledge its importance in the first place. Great company cultures create synergy between teams, improve employee productivity and — perhaps most importantly — help attract and retain top talent.
elAdawi often tells her clients that “Culture will eat their well-planned strategy for breakfast”, meaning they can have the best strategy in the world, but a bad culture will totally devour that. Culture is important because a single cultural misfire can make the mutual goals of a successful merger difficult or impossible to achieve.
2. Systemic Behavior Above Emotional Attachment
In the late 1990s and early 2000s, a popular approach to culture cultivation and team building within organizations focused largely on emotions. There were company retreats where coworkers would do trust falls and talk of coworkers being a “family”. However, elAdawi prefers to focus on behavior over touchy-feely notions that may not bring productivity value to an organization.
“Culture in an organization depends largely on behavioral science,” she explains. “How does the company make decisions? How are meetings structured? What behaviors do the senior leaders demonstrate vs what behaviors do they tell people to embrace? When things fall apart, CEOs may assume it’s because people don’t get along or call it a failure to ‘power through’. What these organizations really need to focus on is corporate behavior.”
While mergers can involve many emotions, the ultimate goal of both management teams is productivity. Emotional concerns over whether one’s job is secure, whether they will like a new boss, or whether they will be able to work well with new coworkers ultimately affect productivity. Productivity typically dips around the time of an M&A due to these emotional factors. As a consultant, elAdawi stresses that a strong focus on behavior can not only limit that dip in productivity and make it short-lived, but done right, it can lift productivity post integration.
elAdawi references a client who experienced a seemingly insurmountable culture clash during a merger. One side relied heavily on email for their communications, while the other felt email was impersonal and an escalation, and preferred calls or office visits, which the first group considered invasive and disrespectful of their time. The problem came down to a difference in corporate culture (aka corporate behavior) that needed some tweaking in order to work for both parties.
“You go in and create little ‘nudges’ to help people behave differently,” says elAdawi. “You have to find the right approach that gets people to experience the benefits of changing their behavior permanently, then you have to make it easy for them to take that step – it’s never as easy as ‘telling them’ that they have to change, or giving them a half-day training, both of these dated approaches create short-lived change that does not ensure.”
3. Listening to Both Sides and All Levels
“Mergers fail for so many reasons,” elAdawi continues. “It’s a difficult time, especially for the company being acquired. Employees see all the external parties — consultants, bankers, lawyers — talking with the acquiring company and coming back to dictate their future to them. It’s human nature to try to find fault with these orders when you feel sidelined, or your input is ignored or undervalued.”
elAdawi favors a two-point approach to listening to her clients. When dealing with two companies coming together, gathering information is crucial. There may be moments where it feels competitive, but it is never about which company “wins” in terms of behavior or approaches.
Everyone in the organization holds different levels of information. elAdawi likes to listen to the input from not only both sides of the merger, but all levels of both organizations.
“As a consultant, you’re in a really unique position,” she explains. “You’re an impartial third party. You get to go beyond the information the CEO and the board can see. If you earn their trust, people will open up to you about things they would never tell their bosses, and that becomes the core of what you use to help the organization while continuing to protect everyone’s privacy.”
To elAdawi, good cultures are not innate. Instead, they must be cultivated.
“Much like a marriage, culture in a merger has to be worked on and given effort and time in order to be successful. It doesn’t just happen overnight,” says elAdawi.
4. An Ongoing Journey
Once a merged company culture is established and is off and running, elAdawi stresses the importance of keeping a finger on the company’s pulse and addressing any issues that may arise quickly.
“As I tell my clients, my goal is for you to never have to hire me more than once for the same thing,” elAdawi told Medium. “We don’t come in as outsiders and dictate solutions. Instead, we actively guide client teams to find the right answer themselves. That’s the only way they are able to continue delivering the same level of results after we leave.”
A full company integration can take 12-18 months. The culture piece of that integration is only one facet of a multi-point plan. It cannot be tackled in a one-week team building retreat. Rather, culture is woven within the entire merger experience, tweaked as the acquisition unfolds until it works well for everyone involved.
A positive and productive company culture is a crucial keystone of a thriving company. Developing a robust company culture can be even more important during the marriage of two companies, where collaboration and compromise are essential. By using a healthy, collaborative approach, AMIRA & CO is taking on the M&A industry from a different perspective and positioning themselves as disruptors along the way.