Best Practices For Culture Marketing Following Mergers And Acquisitions
Kathy Flom-Greenspan is President of Pomerantz Marketing , a full-service B2B agency supporting local, national and global SMEs.
Mergers and acquisitions have been occurring rapidly in recent years, with companies setting records to create value, acquire new technologies or open market access.
Despite their importance and popularity, many mergers and acquisitions do not lead to desired results. According to one study, only 17% of attachments found additional value, 30% made no "obvious difference" and a staggering 53% actually decreased value.
While mergers and acquisitions fail for a variety of reasons, a recent Deloitte report found that culture accounts for 30% of failed integrations. Therefore, business leaders must consider the impact of culture along with other factors to ensure that the M&A process leads to the desired outcome.
What is corporate culture?
Unlike many elements of business, corporate culture is difficult to define and even more difficult to measure. In general, corporate culture is a fuzzy mix of shared values, priorities, goals, attitudes, and norms. In other words, a company is defined by what it produces, and corporate culture is defined by how those results are achieved.
This is important for employees. In a Glassdoor survey, more than half of respondents indicated that corporate culture is more important than salary, and 77% evaluate corporate culture before applying for a job.
Because employees value corporate culture, it goes without saying that disrupting (or destroying) an established culture through a merger or acquisition can undermine an organization's long-term success.
Best practices for cultural marketing after mergers and acquisitions
By following post-M&A cultural marketing best practices, executives can help reduce employee anxiety while developing a more dynamic, resilient and supportive culture. Based on our agency's experience helping clients with their M&A marketing efforts, here are some best practices we've found effective over time:
1. Make corporate culture a clear priority.
Corporate culture is a broad subject, so leaders are unlikely to achieve optimal results by accident. Instead, business leaders must make culture a clear priority in the M&A process, ensuring that decisions are made, policies are implemented, and expectations are set with culture at the forefront.
Making corporate culture a clear priority starts at the top and starts early in the M&A process. It includes vision and values, work standards, leadership strategies, and environmental elements that collectively represent the company's culture.
2. Rely on external voices to assess corporate culture.
Identifying and analyzing the characteristics of a culture from the inside can be difficult. As Deloitte's analysis explains, "the most astute observers of culture are often foreigners, because cultural information does not make sense to them."
By engaging external voices to assess the company's culture, leaders can make cultural issues a regular part of meetings and other deliberate efforts to achieve positive results.
3. Develop an internal communications strategy to convey vision and improve compliance.
Internal communication is important and involves the well-coordinated efforts of multiple departments in an organization, including management, human resources, IT, and marketing.
Especially for employees who have been through a bad merger or acquisition, the process can be difficult and frustrating. This is especially true when communication is inadequate. Responsiveness requires a concerted effort to win the hearts and minds of existing and new employees through the M&A process.
Ultimately, leaders must gain the approval of their employees, and communication is key to achieving this. This may include:
• Internal newsletter and email distribution.
• Use strategic repetition of smart graphics and videos.
• Develop clear and concise communication with various internal departments.
• Posting content for messaging on the company intranet.
• Presentation of virtual and face-to-face events.
• Distribution of gadgets to employees and stakeholders.
Effective internal communication is a controllable element that can help executives communicate their vision and reach consensus in the M&A process.
4. Create an internal brand.
A company's brand is critical to the long-term success of its customers. The same goes for internal branding, which helps companies attract and retain top talent.
An internal brand can reflect career opportunities, employee benefits and a collective identity. Creating and developing an internal brand at the start of M&A personnel supports important internal results.
Even before the recent pandemic and attendant "mass layoffs," MIT's Sloan School of Management estimated that a third of salaried employees would quit within a year. Today's hiring environment is even more dangerous for companies, which is why it's important to build internal brands that encourage existing employees to stay and attract new talent.
5. Build your brand around employee connection.
Employees who feel connected to their colleagues and to the company's mission can thrive in changing circumstances or changing norms. This is why connections should be a top priority when building internal brands and new customers.
To facilitate this achievement, consider the existing brand culture and strengths of each company by compiling a list of "big hits" that can drive cultural differentiation and brand development.
As the M&A business continues to thrive over the next year, attention to corporate culture can mean the difference between success and failure. It is an often overlooked, predictable and effective component that allows leaders to take charge and steer their business through profitable M&A.
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