2 companies + 1 merger = a corporate culture

The accounting profession has seen many mergers and acquisitions in recent years. Mergers and acquisitions in large companies tend to grab the headlines, but transactions are prevalent at all levels, often because small companies suffer from understaffing and large companies seek to acquire practices. niche.

While the rewards from a merger can be large, it can also be high risk, not just in a financial sense. For the merger to be successful, the two companies need to do a lot of planning around integrating the corporate culture.

What is corporate culture?

Corporate culture is made up of the beliefs and behaviors that determine how employees and managers interact and manage external business transactions. Often, this culture is implied rather than expressly defined and develops organically over time from the cumulative traits of the people the company hires. This culture can be reflected in company dress code, hours of operation, office layout, benefits, turnover, hiring decisions, treatment of clients, client satisfaction and all other aspects of operations.

Having a healthy and successful corporate culture isn’t just fun. It really is a business imperative:

Integrate corporate culture into your mergers and acquisitions planning

When not handled properly, mergers and acquisitions can strain even the healthiest corporate culture. Lack of communication, weak integration plans and cultural mismatch are some of the main reasons companies end up ‘disassociating’.

During the planning phase of mergers and acquisitions, it’s easy to focus on the financial and technical aspects, but it’s crucial to consider cultural fit throughout the process. Here are five areas to consider during each phase of the process.

Direction

The pandemic has highlighted how important it is for leaders to build confidence. People need to know that they are physically safe and that leaders care about their emotional, financial and societal needs.

With many employees and managers working remotely, trust is more important than ever. Managers simply need to be better managers in a virtual work environment, and employees need to be empowered and focused.

Merger Considerations:

  • Are C Suite members part of the merge team?
  • What are the non-negotiable elements in the culture of your company?
  • What culture will you ultimately follow?

Talent

How does the company define employee expectations? People cannot meet expectations that they do not know have been set for them. Every employee should have written goals that are specific, measurable, attainable, realistic and timely (SMART). Review these goals formally three to four times a year, but more regularly informally

This is especially crucial for people working remotely. Without regular and transparent communication with remote employees, it’s easy for them to feel disconnected from the team and become disengaged. Protect yourself from this isolation with regular informal meetings and video communications.

Merger Considerations:

  • Ensure HR professionals are part of the M&A team from the start
  • Match the talent components of each company to ensure they are compatible, including Diversity, Equity and Inclusion (DCI) initiatives, wellness programs, remote work policies, advantages, etc.
  • Are the communication channels and techniques similar in the two companies?

Growth

Marketing and business development are essential to the growth of your business, so it is crucial to consider how each company approaches these areas and how they will work together after the merger.

Digital marketing, including SEO, social media, content marketing, and email is essential for accounting firms today. Serving customers around the world has never been easier, and the companies that are most successful in attracting new customers using digital marketing strategies will win in the market. Customers look for companies to solve their problems, and you will gain customers when you use digital marketing strategies to educate your target customers on how your business can solve their problems.

Merger Considerations:

  • What are the niches and services that drive your business?
  • What business development expectations are important to your business?
  • Is there a marketer in one or both companies? How will they complement each other?
  • Do either of the companies have content creation expectations and can they continue into the new company?

To treat

How many different processes does your business have? Before we start trying to count them, let’s just say the number is high!

Each business will have unique processes for sales, customer onboarding, service delivery, invoicing, internal finance management, recruiting and hiring, etc. It is important to agree on the processes that will be followed once two companies become one.

Too often, companies allow an acquired business to keep old processes long after the deal has closed. This can put the employees of the acquired business at ease, but it makes it impossible to share resources between offices or departments. Eventually you need to start operating as one business.

Merger Considerations:

  • What are the most important processes to change?
  • Will the process change happen immediately? Or do you have a schedule?
  • What business processes will you follow? How are you going to decide?
  • Who will lead the process change and complete the training?

Technology

Last but not least, consider the cultural suitability of each company’s technology. Technology is the lifeblood of everything we do in an accounting firm. Just listing all the hardware and software that every business relies on on a daily basis could fill an entire article. “Extract and replace” is ideal, but also expensive and time consuming.

Merger Considerations:

  • Which technology is best for the new culture / business?
  • Who will be responsible for your technology strategy and ultimate support?
  • Is rip and replace the right choice for you?
  • Who is responsible for the integration and training of the whole company?

Thinking through each area may seem overwhelming at first glance, but all of these areas SHOULD be covered. Start thinking about your cultural fit early in conversations and filling in the gaps. Really hear what’s important, what both companies want to keep, and what both companies are willing to give up.

With an intentional strategy and a focus on culture, employees can embrace any merger or acquisition change, and the business can thrive in the future.

About Carl Schroeder

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