Are you in the midst of a mergers and acquisitions adventure? Growth can be threatening, but it doesn’t have to be.
My client had already acquired three competitors, tripled their headcount, and quintupled their revenue in only a 4-year period. Revenue had surged from $50 million to $250 million as they moved rapidly through 2 key inflection points. Though mergers and acquisitions (M&A) are an exciting and powerful path to rapid growth—they often bring tremendous stress, leading to Critter State behavior.
Assess: What We Found
The amount of change due to the acquisitions, had hurt employee retention due to four competing cultures. One culture was very conservative (ties every day in every role), one culture was very laid back (jeans, flip flops, t-shirts), and one culture was middle of the road, like the parent company was.
Since the cultures hadn’t been integrated into a singular cohesive one, silos had formed, slowing effective information flow and decision making. And trust was low as a result. Now that the basic integration was done, it was essential to ask “Who are we going to be together? What is our tribal identity?” It was time to create trust and tribe.
Lack of trust creates an environment where concerns quickly evolve into fears. And when fears collide with a belief that the system is failing, or that one doesn’t and never will belong, trouble results. As distrust and fear increase, the negative impact on employee morale, engagement and performance accelerate. The end results are disengaged employees, frustrated management, and lower profits. And the problem comes from four key emotional experiences:
- A sense of injustice – the experience of unfairness tamps down the insula, the part of the brain responsible for emotional hurt and intuition. If a person is experiencing unfairness they will spend more time in critter state, which adversely affects performance, decision making, collaboration, overall peace and happiness.
- Lack of hope – the experience of hopelessness is even more painful than unfairness, and its below Critter State on the emotional range. In neurolinguistics, the states of hopeless, helpless, worthless, and grief/terror are considered Baseline States. It doesn’t get worse than this.
- Lack of confidence – depending on the person and degree of lack of confidence we’ll likely see procrastination, reluctance to take risks, playing “small”, and yes, more Critter State.
- Desire for change – this is encouraging as there’s some energy here. Desire for change means we can envision a possible future where things are better. This lights up the Ventral Striatum where we anticipate reward. If we can increase this experience, we can get into Smart State.
Act: What We Did
In this case, we had to release resistance, make new meaning and establish a new identity, and enroll and engage.
First, we did an SBM Index to gauge how everyone felt, and determine what they needed most. We found that people really wanted belonging (no surprise), and we did culture coaching for a year to create the cultural rituals to help people come together.
The new blend of leadership team then took a roadshow to all sites to make everyone feel everyone is in it together, and to make clear that no single site is better than others. The main communication: “You are safe here, we are all in this together, and everybody matters.”
We also had to acknowledge the grieving. After all, some well-loved employees had lost their jobs, and you can’t have two HR departments and two finance divisions. And some product lines and service offerings were cut as well, since they weren’t profitable or relevant to the new entity. So we designed parting rituals to minimize the grieving, and acknowledge and appreciate the parting people’s contributions.
Together we forged a new vision and set of company values (and of course dress code: business casual). And we made sure to set up cross-functional teams (that were of course diverse) for all new initiatives; cultural, sales, marketing, or operational. In a word, we created more collaboration, communication, transparency and mutual respect. Everyone owned that rebuilding trust is a shared responsibility. They were in it together.
Mission – Why are we here as an organization? Why do we exist? What are we going to make happen because we exist? The mission is a long-term proposition that is lasting— that doesn’t change.
Vision – A vision is a picture of what you want, as far out on the horizon as you can see, as an organization or as an individual. This can be three to five years, or even longer. What’s the clear future you see for the organization? What do you want your world to be like / to have achieved in the future?
Values – Values are what you honor and believe in, which will govern how you will behave as you are fulfilling your mission and creating your vision. Values determine standards of behavior, the code of conduct that you will not compromise.
Building sustainable trust was key. This means taking employee engagement and empowerment to a new level, and ensuring leadership is engaged and empowered too. Engagement and motivation happen when people solve their own problems, and create their own aspirations and expectations. That’s why boosting communication via the Outcome Frame tool and the Feedback Frame is so powerful. Additionally, it was essential to:
- Use inquiry over advocacy—ask questions vs. giving orders, and use the Outcome Frame for deep insight and clarity creation.
- Hold team strategy and problem solving meetings at every level–meet to do the work not to talk about the work
- Have team members create their own goals and action plans.
- When we added empowerment to engagement, we witnessed even more profound results. The leaders that they could heal and prevent significant distrust by first understanding what a person is experiencing, and then intentionally helping them shift into engagement and empowerment.
When we give people what they crave (more safety, belonging, and mattering) their Critter Brain calms down and we can guide them into their Smart State.
ROI: How the Organization Benefitted
Within the first year of working together:
- The organization shifted from 85% retention to 90%.
- Our client successfully navigated the “people” work that had been missed, because of zooming through 2 inflection points.
- Our client’s growth surged from $250 million to $400 million.
The best part is when you walk through the organization you see leaderboards tracking results, feel the enthusiasm and connection among this ever-expanding tribe, and hear people saying encouraging upbeat messages as they collaborate, joke with one another, and pat each other on the back.
Are you in the midst of a mergers and acquisition adventure? We would love to hear about it!
Christine Comaford is a leadership and culture coach and the author of SmartTribes: How Teams Become Brilliant Together. Download an excerpt of her upcoming book, Power Your Tribe: Create Resilient Teams in Turbulent Times here.