The benefits of a merger or acquisition can be plentiful but a deal can also fall astray without a clearly defined strategy for assimilating organizational cultures.
Despite good intentions, there are no guarantees as to how well teams from either side of a transaction will integrate following a deal. And left to chance, odds are high that conflicting values, beliefs, and behaviours between a buyer’s and seller’s workforce will result in a culture clash that takes a toll on their time, money, and emotions before being resolved.
It’s a workforce transition that cannot be taken for granted. That’s why conversations and plans concerning the post-deal workplace culture are as critical as any other focus area during the M&A process.
Costs of culture clash
There are tangible costs to leaving workforce assimilation out of the M&A conversation. “Organizational culture” may be hard to translate into hard numbers on a spreadsheet, but a lack of planning as to how disparate workforces might come together deserves leadership’s attention, nonetheless. Potential disadvantages include:
Deal value loss
Resulting from the loss of leaders and employees who are key to realizing the value of an M&A transaction. KPMG research has shown that voluntary turnover increases significantly as integration discomforts arise.
Incurred when employees leave or resign during a critical period of a transaction, resulting in increased time, effort, and costs in finding replacements that require training and extra support during onboarding.
Loss of productivity that happens when employees lose passion or engagement in their job but stay on to “collect a paycheck.”
Resulting from the loss or disengagement of employees with key institutional knowledge and skills.
To learn more about tips leaders should consider to help ensure a smooth transition, read the full article below:
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