Supporting Employees Through M&A Integrations
Have you considered that change management could be the missing element to completing a successful M&A integration? A significant portion of the risk involved in transactions is in the employee experience and ensuring employees understand answers to basic questions: who, what, when and how. With over 20 years of experience helping clients through M&A transactions, we continually see organizations struggle with how to integrate at the right speed, appropriate level of engagement and support, and ensure adoption of a strong culture. Clients engage Switch because we understand how to reduce risk by supporting integrating employees through the change curve.
What is the change curve? The change curve, adapted form the Kübler-Ross Change Curve, outlines the behaviors that should be expected during times of change. It tracks the emotions employees experience when navigating change and these correlate to performance, including levels of engagement and morale.
Each emotion point on the curve can be aligned with a stage of the integration process. Identifying the potential emotions that can be evoked by each stage of the process enables companies to develop a proactive plan to manage concerns and, as a result, deliver a successful integration. Let’s look at the phases of the curve, how they align with the integration, and consider some high-level strategies to move acquired employees from shock to full engagement.
Announcement of the deal can cause shock. A person’s initial reaction to the news of an acquisition is, “Can I cope with this?” Switch works with clients to develop a change management strategy before the deal is announced. It is important to prepare key stakeholders, to ensure alignment across functions, and to have a plan for the internal and external announcement. This includes thinking through what specific concerns employees will immediately want answers to. Ideally, employees will be notified about an acquisition before it is announced to the market; these announcements can be within minutes of each other. Best practice is to inform employees, invite them to a town hall or team meeting, and launch an intranet site with information about the acquisition. The site should include FAQs and who to contact with any questions.
Between the announcement and the beginning of the integration, employees can experience denial. Employee behavior may look like, “This isn’t really happening.” It is important to minimize the time between announcement and the start of integration activities to minimize behaviors of denial. If a gap between these two events is unavoidable, communications should be planned so that integrating employees do not feel in the dark about next steps. At a minimum, communications should include FAQs and who to contact with additional questions. Activating a change champion network of trusted and respected individuals across the business helps to address any feelings that can arise if an employee is experiencing symptoms of denial.
Feelings of irritation and anxiety can occur throughout the integration. These emotions are critical to monitor and manage. In our experience, this phase of the curve can carry the highest risk to the success of the integration. The key to reducing the depth and width of this phase is to have a change management plan that includes onsite support, managers communicating regularly with the integrated employees that will be reporting to them, and finalizing decisions that will impact employees as quickly as possible.
Employees begin to move into the experimentation phase of the curve once they have clarity. Switch works with companies to reduce the amount of time it takes for acquired employees to move from shock to experimentation. By employing various change tactics, such as involvement, communication, education, empowerment, teaming, leadership, and even rewards, individuals begin to experiment with accepting the change. This is the point at which employees will consider making a personal decision to adopt the change and ultimately shift from the change to integrate into their new ways of working.
Employees make the decision to move from experimentation to acceptance when they feel empowered in their interactions with the new company. Switch helps companies accomplish this by engaging change champions at increasing levels of responsibility, partnering with leaders to make the new employees feel welcome, soliciting feedback from employees throughout the integration so that they feel they have a voice, and responding quickly to feedback so that employees know their voices are being heard.
The final phase of the change curve is a feeling of being fully integrated and aligned with the acquiring company. Switch’s goal goes beyond helping employees get to the end of the integration. Good change management for M&A activities helps employees feel a sense of ownership in their new company. Just like a fan is fully committed to their sports team of choice, we want acquired employees to have that same feeling of commitment. This is accomplished by executing the integration with excellence, by maintaining alignment with all stakeholders throughout the integration, and by engaging everyone with empathy, patience, and care. Integration teams represent the new culture that acquired employees are joining. It is imperative that these team members recognize their end goal is not to accomplish a task, but to accomplish a successful integration.
The change curve does not only apply to M&A transactions. It can be leveraged anytime employees go through change. What is a change your team is about to experience? How can understanding the change curve help you and them navigate change successfully?
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