Learn the culture due diligence myths that hurt Merger & Acquisition outcomes. Don’t fall into the trap of not using up to date tools and information.
Mergers & Acquisitions: Disengagement and Talent Shortages
Scope M & A
Scope Mergers & Acquisitions are Used to Transform Companies.
In 2018 Mergers and Acquisitions flipped from majority scale to majority scope deals. (Bain & Co.) Corporations are actively taking steps to transform their businesses in order to stay competitive in a Global Economy.
The new filter for Mergers & Acquisitions includes the question, ‘how will the transaction transform the business and create expanded revenue opportunities?’
Scope mergers & acquisitions are used by companies for the following reasons:
Create a New Culture
Scope Mergers & Acquisitions Require Creating a New Culture NOT Integrating Cultures.
Scope Mergers & Acquisitions are initiated to transform a company. Successful transformation requires initiating a cultural transformation.
Even more troubling, various studies have observed that between 60% and 70% of key leaders and top talent leave within the first year after a Merger.
In the age of employee disengagement, M&A culture due diligence is critical for evaluating how to create a new culture that is first-class. A first-class culture is a Give Value First Culture.
The traditional way of approaching culture due diligence and culure integration does not work in the age of employee disengagement. The most recent research from Gallup shows that 91% of employees who switch jobs do so to “leave their employer” not because of a better career opportunity.
Every employee wants to work for a first-class company. In a skill shortage market having disengaged employees is an EBITDA disaster,
Your Culture is Your Employer Brand
A McKinsey survey found that 92 percent of business executives felt that past Mergers and Aquisitions would have “substantially benefited” from a more rigorous culture due diligence process.
A successful scope Merger & Acquisition is dependent on the new company’s ability:
What is the secret to giving top talent what they want and still hitting EBITDA Goals?
The answer is simple. Give top talent and next-gen leaders what they want as you plan for the outcomes you want.
The solution is simple. Plan to give them the career value that is relavent today. Stop looking in the rearview mirror and offering out of date motivitators.
Career value is more than a paycheck. Top talent can easily replace a paycheck. Less easily replaced is a “Give Value First Culture.”
What motives Top Talent to Stay?
Improve Professional Brands
Top talent will not stay with companies that do not create a bridge to their next job.
Triple Bottom Line Success
Top talent is purpose driven and wants the companies they work for to be focused on the triple bottom line. The triple bottom line includes winning outcomes for society, the planet, and the company EBITDA.
Embrace Emerging Technologies
The best workers do the best and the most work. They have a combination of soft skills paired with digital expertise. Also, top talent embraces continous learning tied to emerging technologies.
Training Leaders That Know How to Be Sponsors
Top talent wants sponsors who know how to advocate for other's careers, idea's, and continuous learning.
How to create a culture that makes top talent STICK?
Success is dependent on creating a “Give Value First Culture” framework, effectively communicating the culture, and finding culture leaders.
Plan a culture that improves your employees' professional brand.
Best steps for planning a culture that improves the employees’ professional brand.
Communicate the intended culture early in the process.
The majority of employees are not key players in the discussions that precede the merger. Most of the information that trickles through to employees is secondhand and thirdhand knowledge. It is the equivalent of the childhood game of telephone. Even a great messsage gets distorted when dissemination is not communicated in the right way.
Best steps for communicating your culture plan include:
Find the Systems Leaders.
It takes Systems Leaders to create a Give Value First Culture. Authoritarian Leadership is out. Selfless Leaders are in. Successful merger inntegration is dependent on training or hiring Systems Leaders that proactively use resources to create a first-class culture.
What makes System Leaders different?
“Like many leaders, they tend to be smart, ambitious visionaries with strong skills in management and execution. Unlike traditional leaders, they are often humble, good listeners, and skilled facilitators who can successfully engage stakeholders with highly divergent priorities and perspectives.” (World Economic Forum)
Systems Leaders will execute on creating and maintaining a first-class culture that is a magnet for Top Talent and Next-Gen Leaders.
Take Action or Own The Consequences
A scope merger is a great opportunity for building an engaged and high-performance culture. Left unaddressed, disengaged cultures will destroy your Mergers & Acquisitions outcomes.
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