Mergers & Acquisitions

Looking for some insight across this community! Our company has done a few M&A's and we are now trying to better integrate the very important culture aspect into our overall assessments. How soon do you start to assess the culture? What questions or artifacts of NewCo do you find are most telling as to whether they will successfully integrate with CurrentCo? Where do you get the info without directly asking the prospective leaders/employees at NewCo? Any other thoughts, tips, tricks or tools that could help with this? 

Thanks in advance for sharing!

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Dawn Feltner
Program and Change Manager
GoDaddy
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Hi Dawn,

We start at the beginning of diligence with resources aligned to a specific culture workstream. This has evolved out of the HR workstream (but still aligned) to elicit greater emphasis on this work. There are a number of things we do, conversations we have, tools to use, in performing our assessment. We talk with people both on the NewCo and CurrentCo side about definitions of culture and how it shows up in both workplaces. Interviews and conversations tend to yield the most valuable information. Ideally you can get with the c-suite leaders for one on one conversations and learn from them. Obviously you should always be mindful that they're looking to put their best foot forward. If you ask the right questions and have them provide supporting examples you should still gain some meaningful insight.

We will always have culture related questions as part of our HR meetings with the sellers. Particularly in auctions when time is short, this may be the only chance you have to get in front of a person from their side.

We have a framework that details out how we define culture with related attributes have designed tools around those to measure how they are demonstrated both at our company and the target. This helps to do a side by side of glaring differences but always requires discussion around them to get into deeper layers.

Even with very restricted access to individuals, there will likely be information from the target in the data room that will inform what their culture looks like. For example, employee handbooks, board agendas/meeting minutes, governance and process documents can say a lot too.

I hope this helps!

Becky

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Becky Persak
Aon
Head of M&A - Leadership, Culture & Change
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Original Message:
Sent: 2023-09-20 10:46
From: Dawn Feltner
Subject: Cultural Assessment in M&A - When and How?

Looking for some insight across this community! Our company has done a few M&A's and we are now trying to better integrate the very important culture aspect into our overall assessments. How soon do you start to assess the culture? What questions or artifacts of NewCo do you find are most telling as to whether they will successfully integrate with CurrentCo? Where do you get the info without directly asking the prospective leaders/employees at NewCo? Any other thoughts, tips, tricks or tools that could help with this? 

Thanks in advance for sharing!

------------------------------
Dawn Feltner
Program and Change Manager
GoDaddy
------------------------------

Dawn,

As usual, Rebecca is spot-on in her reply.  So I will not add much to what she has already said.  However, I have found that the acquiring company's culture is often overlooked in the process.  We encourage our clients to reflect deeply and assess their own Emotional and Leadership cultural health as part of any change process, including M&A.  This reflection takes the form of answering these questions.

Do we understand our organization's Emotional and Leadership health?

Do we have a change management process that addresses the emotional component of change?

Is our culture ready to support this change?

Are our frontline leaders prepared to support the change? (Integration leads in the M&A case)

Is the change management process/integration plan robust enough to support the change? (See Rebecca's comments below)

More often than not, we wind up conducting a cultural assessment of the acquiring company to help them answer these questions.

------------------------------
Anthony Casablanca
Co-Founder and President
GriefLeaders LLC
"Changing How Change is Implemented"
www.griefleaders.com
]
------------------------------

Original Message:
Sent: 2023-09-20 10:46
From: Dawn Feltner
Subject: Cultural Assessment in M&A - When and How?

Looking for some insight across this community! Our company has done a few M&A's and we are now trying to better integrate the very important culture aspect into our overall assessments. How soon do you start to assess the culture? What questions or artifacts of NewCo do you find are most telling as to whether they will successfully integrate with CurrentCo? Where do you get the info without directly asking the prospective leaders/employees at NewCo? Any other thoughts, tips, tricks or tools that could help with this? 

Thanks in advance for sharing!

------------------------------
Dawn Feltner
Program and Change Manager
GoDaddy
------------------------------

@Rebecca Mox-Persak has a great answer to those instances where M&A will occur in the future!

However, I would like to add this perspective: What do we do when the M&A is in the past AND Culture was not addressed/included in the work?

I have experienced this too many times before where companies want to grow or be competitive, so they acquire a brand and product. They focus on their technical integration, sales org onboarding, and a few welcome posts generally.  Next Step: Move on without any further ado and repeat another M&A.

This is really painful when this occurs and the issues only compound and get hidden under all of the "busyness of business". The Employee Experience is dampened, retention is at risk, and the dip without change management is huge.

QUESTION: What do you done then in this scenario? I look forward to the dialogue!

------------------------------
Douglas Flory
------------------------------

Original Message:
Sent: 2023-09-20 10:46
From: Dawn Feltner
Subject: Cultural Assessment in M&A - When and How?

Looking for some insight across this community! Our company has done a few M&A's and we are now trying to better integrate the very important culture aspect into our overall assessments. How soon do you start to assess the culture? What questions or artifacts of NewCo do you find are most telling as to whether they will successfully integrate with CurrentCo? Where do you get the info without directly asking the prospective leaders/employees at NewCo? Any other thoughts, tips, tricks or tools that could help with this? 

Thanks in advance for sharing!

------------------------------
Dawn Feltner
Program and Change Manager
GoDaddy
------------------------------

Boy, Doug, that's a tough one.  All too common, but a tough one.

Obviously, you can't roll back the clock and fix the situation.  However, like all journeys, you can start with where you are.  Both with the acquisition that has already happened and with your organization's M&A process to ensure this doesn't happen again.

Here are a few questions/thoughts to consider.

1. Do the leaders of either or both organizations recognize this cultural gap and its impact?  If so, then there is hope.
2. Do the leaders of either or both organizations feel the need to embark on a cultural transformation?
3. Has any work been done to better understand the Emotional and Leadership health of either organization?
4. Can a leadership change solve the problem?  When I was installed as the president of an acquired company I was told it was because "we want someone with a heart who will instill a sense of leadership courage, compassion, and vulnerability in the company" as we worked to integrate them and drive results.

I hope this spurs thought and stimulates conversation.

------------------------------
Anthony Casablanca
Co-Founder and President
GriefLeaders LLC
"Changing How Change is Implemented"
www.griefleaders.com
]
------------------------------

Original Message:
Sent: 2023-09-29 23:07
From: Douglas Flory
Subject: Cultural Assessment in M&A - When and How?

@Rebecca Mox-Persak has a great answer to those instances where M&A will occur in the future!

However, I would like to add this perspective: What do we do when the M&A is in the past AND Culture was not addressed/included in the work?

I have experienced this too many times before where companies want to grow or be competitive, so they acquire a brand and product. They focus on their technical integration, sales org onboarding, and a few welcome posts generally.  Next Step: Move on without any further ado and repeat another M&A.

This is really painful when this occurs and the issues only compound and get hidden under all of the "busyness of business". The Employee Experience is dampened, retention is at risk, and the dip without change management is huge.

QUESTION: What do you done then in this scenario? I look forward to the dialogue!

------------------------------
Douglas Flory

Original Message:
Sent: 2023-09-20 10:46
From: Dawn Feltner
Subject: Cultural Assessment in M&A - When and How?

Looking for some insight across this community! Our company has done a few M&A's and we are now trying to better integrate the very important culture aspect into our overall assessments. How soon do you start to assess the culture? What questions or artifacts of NewCo do you find are most telling as to whether they will successfully integrate with CurrentCo? Where do you get the info without directly asking the prospective leaders/employees at NewCo? Any other thoughts, tips, tricks or tools that could help with this? 

Thanks in advance for sharing!

------------------------------
Dawn Feltner
Program and Change Manager
GoDaddy
------------------------------