The Critical Role of Employee Engagement During Mergers and Acquisitions
We’ve all heard the maxim “change is constant,” but some organizational changes are more impactful and uncomfortable than others. Think of downsizing, internal restructuring, spinoffs, and mergers and acquisitions—these represent major business decisions that have an enormous personal impact on the life of each individual involved. With the expected increase this year of mergers and acquisitions, it’s time to examine how this major change affects people’s experience at work and what we can do about it.
Organizations pursue mergers or acquisitions for a variety of reasons—entry into new markets, plays for innovation or new talent, and customer-base expansion, to name a few. Whatever their nature, mergers and acquisitions are notoriously difficult to execute effectively. One common reason for failure is leaders underestimating the importance of—and focusing too little on—the people and culture factors in the equation.
There seems to be some inertia in the c-suite, as 95% of executives describe cultural fit as critical to the success of integrating merged or acquired organizations—yet a full 25% of these leaders cite a lack of cultural cohesion and alignment as the primary reason for failure.
So while it’s beneficial for all organizations to understand their employees’ perceptions of their workplace (as well as how those perceptions tie to employee engagement and performance), it’s wise for leaders of organizations going through a merger or acquisition to hyper-focus on what their people feel and need. Failing to do so can create serious business disruption caused by drops in employee productivity, turnover, and diminished team performance. It’s key during these times to call upon a consistent way of listening to employees and taking meaningful action on their feedback.
Change can threaten stability and undermine employee engagement
Even if employees are initially excited about the opportunities afforded by a merger or acquisition, the excitement may subside as they consider how the change might impact the organization’s future and their personal journey. It’s safe to say that most people want to be happy and successful at work, clearly understand their role, and have a path to learn and grow. Most also want to receive timely, proactive, and candid communications about what’s happening, why, and the impacts.
In times of change, employees are likely to feel a sense of uncertainty about their long-term place in the organization, and they’re likely not privy to all the details of the transaction. This results in a heightened need to express concerns and exert control where possible to be able to coexist with the uncertainties.
Giving employees a voice
A merger or acquisition could easily go one of two ways for employees: it might offer opportunities for growth, or it could introduce redundancies and lead to layoffs. Whatever the case, it’s critical that managers understand their people’s needs, questions, concerns, and feedback so they can respond, support them, and effectively facilitate change.
Many organizations develop a strategy to communicate key messages and ensure business continuity during mergers or acquisitions. Frequent pulse surveys (pulsing) helps balance this equation, giving a voice to employees in the process. Specifically, pulsing helps organizational leaders in two ways:
- Understand and shape the culture. Employee feedback will help leaders understand the cultural similarities and differences between the two organizations. With these insights, leaders will be able to create effective integration plans that address where cultural tension may occur.
- Optimize integration effectiveness. When an organization regularly pulses its employees during a merger or acquisition, leaders can use employee feedback to zero in on critical aspects of the integration and adjust their plans accordingly.
Ultimately, pulsing during mergers and acquisitions—and, really, any time—should enable higher-quality, more frequent, and better-informed conversations among employees and leaders. Employee input can even help identify opportunities for employees to facilitate the change. By actively involving employees in the change, organizations can drive and ultimately increase employee engagement and improve the overall success of the integration.
Creating a measurement approach for mergers and acquisitions
Creating an effective measurement approach offers a way to translate employee feedback into insights and action. Leaders want to understand key similarities and differences between the two organizations’ cultures, ways to integrate successfully, and how organizational practices impact engagement and attrition.
To ensure a measurement approach identifies key success enablers and barriers, leaders need to start by thinking about the purpose of the merger or acquisition. Then focus on answering the following core questions from the employee perspective:
- Am I clear and excited about where we’re going?
- Do I have what I need to get there?
- Do I feel a sense of belonging in the new organization?
- Do I trust leaders to be fair and thoughtful throughout?
Let’s say an organization acquires a competitor to expand its market reach. It may make sense to pulse employees coming from the acquired organization on topics including belonging, resources, and growth opportunities. That gives them a reason to feel supported, and optimistic about opportunities for advancement.
Customer story: How LinkedIn kept employees engaged during its acquisition
We’ve seen our suggested approach to pulsing during times of merger and acquisition work effectively within many organizations. In fact, we’ve seen it work firsthand when Microsoft acquired LinkedIn—our parent company.
When Microsoft made this landmark acquisition in 2016, LinkedIn had built the world’s largest professional network with over 500 million members (now close to 640 million members). LinkedIn had also established a strong culture built on employee engagement that has helped it grow to nearly 15,000 employees.
Anticipating the negative impact of the acquisition on engagement and retention, LinkedIn leaders spearheaded a mission to maintain its strong culture. They knew a channel to listen and take action on employee feedback would provide critical insight into employee engagement and integration success.
An existing Glint customer, LinkedIn partnered with Glint to gather more employee feedback during this time, measuring three key areas during the transition:
- Connection: managers showing compassion, encouraging feedback
- Direction: transparency, sharing as much information as possible
- Trust in leadership: remaining visible, bi-weekly all-hands meetings
LinkedIn started implementing internal changes based on the initial pulse results. About five months after the acquisition, it launched another pulse to understand employee sentiment. The results over time showed a slight dip in engagement and an almost immediate bounce back to the engagement baseline.
By listening to employees, communicating effectively, and doubling down on its unique culture and programs, LinkedIn was able to thrive, even during its acquisition.
Harness a Proven Methodology to Keep Employees Engaged
The key when pulsing during a merger or acquisition is to make employee voices a critical part of the change. Doing so can ensure employees stay engaged and even thrive during this time. For organizations seeking a proven approach, Glint provides a methodology to help understand culture, improve engagement, and effectively navigate integration during times of change.
To learn more about employee engagement in times of change, download Glint’s People Success Toolkit: Mergers and Acquisitions.