When an organization is going through a time of upheaval, such as a merger and acquisition (M&A), the effect on culture cannot be underestimated. Proactively managing it is crucial to a successful integration.
We recently sat down with three panellists who had undergone their own M&As to discuss how culture can be successfully integrated after a period of change. When speaking with Allison Pinkham, Galderma, Matt McCarty, Clario, and Mirza Dautbegovic, Bausch Health, all echoed a common belief: Purpose lies at the heart of a successful cultural transformation but it also must be co-created on the ground if it’s to retain the best of both companies.
Cultural alignment is crucial to a successful merger, yet leaders often don’t give this enough thought. So how can leaders address culture more effectively during times of upheaval? Our panellists shared their expert advice.
Start with purpose
Our most recent CEO Purpose Report showed that only 65% of organizations use purpose to drive decision making. During times of big, transformative change, purpose needs to be a guiding light and backdrop against which employees are aligned.
When ERT and BioClinica merged 30 years ago to form Clario, they brought together two established businesses with two different cultures. The business had to decide how to structure and align the thousands of employees, and reinvigorate them during a time of significant change.
“With all of those considerations and key questions about the organization's future and direction, it's really important to start with strategy and alignment of who you are and who you want to be. People often jump straight to thinking about brand and marketing and values and culture, but for me, all of that needs to come out of a clear direction of what are you trying to achieve and who do you want to be in the marketplace,” said McCarty.
Figuring out their purpose and who they would be going forward helped Clario with key decisions around culture, giving a clarity of identity that brought employees together.
With all of those considerations and key questions about the organization's future and direction, it's really important to start with strategy and alignment of who you are and who you want to be.Matt McCarty
Former CMO, Clario
“It's really important that you can use your purpose to not just align from an M&A perspective, but you can align your own employees to really rally behind multiple changes, multiple transformations, and keep that beacon of light that people can hold onto when the day-to-day operations are sometimes challenging,” agreed Pinkham.
Co-create the right culture for your organization
A merger provides a unique opportunity to transform a newly-formed business and shape its culture in-line with a new vision. As a spinoff from Nestle, Galderma had to define its own purpose, culture, and employee value proposition as a standalone organization.
A series of interviews with employees to get to the essence of what made the Galderma culture so unique led to a definition that perfectly encapsulated who they were as a business.
As Pinkham explains, “One of the things that we found to be most successful is a co-creation process. You may have two organizations that have two processes, but if you really want to create the best of both, you need to be willing to take a step back and say, ‘How do we co-create here?’” said Pinkham.
As early on in the process as possible, leaders should get to know both cultures and try to understand the ‘secret sauce’ behind what makes each culture a success. How do they make decisions? How are people motivated? What drives them to work each morning? Surveys can give a voice to people from both companies.
One of the things that we found to be most successful is a co-creation process. You may have two organizations that have two processes, but if you really want to create the best of both, you need to be willing to take a step back and say, ‘How do we co-create here?’Allison Pinkham
CHRO, Galderma
“Most initiatives that are dreamt up in the boardroom and cascaded out corporately don't tend to have the impact you want. And so how do you take your entire team on that journey?” agreed McCarty.
Galvanizing everyone internally is no easy feat but focusing on driving change from the inside out and including employees during the transformation process ensures for a smoother ride.
Lead with clarity and authenticity
Articulating a clear future direction with staff can help create clarity and bring people along on the journey with you.
“Engaging people starts with the ability to communicate and clearly paint the future and where the company is going; in a world which is very fast-paced and often short-term oriented, there is not enough talk about the future,” said Dautbegovic.
Once a purpose and a vision are established, people have something they can believe in and are able to turn a business story into action.
Lastly, a key piece of advice is to not underestimate the change management components of a cultural transformation – “It always starts too late”, agreed Pinkham.
As we have seen, organizations that plan their culture transformation piece early on and have a well-defined purpose to unite employees will be able to better drive growth from the inside over the long-term.
To watch the full conversation of our webinar, From M&A to Cultural Transformation, head here.
