Flourishing in a merger: how to integrate not annihilate culture
Mergers bring immense potential for growth and innovation. But they also pose a significant challenge: aligning two distinct corporate cultures who have their own history, loyalties, quirks and collective nervous system. When cultures clash, team morale, productivity, trust and connection suffers, often in ways that dramatically reduces the gains the merger could bring.
While the family analogy is often used with businesses in ways that seem to ignore the immensely problematic connotations it brings, in mergers, there are some definite synergies in blended families, with the issues of bringing together a bunch of kids that only have in common that their parents are connected to each other.
There have been a number of high-profile mergers happening over the last few months, and some persistent chatter about more to come in Tasmanian GBEs. At DISCO we’ve been through some great and some awful mergers and have a pretty good blueprint on how to get everyone to play nicely.
Our DISCO DNA is built on systems, futures and neuroleadership as core lenses to work with whole human systems. Mergers are fundamentally driven by financial benefit – no one has ever said let’s merge because our people will really get along well together. But at the heart of what has made any company epic enough to be a catch on the merger market are its people, and their experiences are shaped by, and shape, the company’s culture.
A merger signals an unknown shift in values, structures, and ways of working, as well as the always destabilising reality of job losses and redundancies. Alongside that is the implicit and unspoken tension of which culture will dominate the other, and all of the inherent tension that brings to people and the thing they crave most as human mammals – safety and consistency in connection. The culture part of a merger can’t be left to become the hunger games or a complete annihilation of one of the cultures. Both cultures have to be walked together and enables to keep what they love and build an even better amalgam of their best parts.
Like most discovery phases by DISCO, we begin any process of this magnitude by putting a futures foresight lens across the whole organisations system to understand where the alignments and opportunities for building flourishing are for people and productivity, and where there may be clear conflicts. This is where SHAPE our data partner is a perfect tool for objectively surfacing what a collective vision of flourishing in the new entity could be.
Using a future foresight strategy framework enables leaders to anticipate and plan for possible cultural challenges. Future foresight is about planning ahead by understanding different possibilities, which allows leaders to shape a culture that is adaptable and aligned with evolving external pressures and internal dynamics.
By visualising potential scenarios based on differing cultural practices, values, and work expectations, issues such as one company may value hierarchical decision-making, while the other might encourage more flat and democratic processes can be anticipated and managed as to how that will play out and the impacts on the merger.
It’s important to identify both companies’ core values, practices, and especially unwritten ‘rules.’ This process helps clarify areas of potential overlap and/or friction. Once these areas are mapped, leaders can pinpoint specific values and practices to retain, adapt, or retire with consensus from the teams involves.
The discovery process will also assess the evolving needs of the industry and workforce to ensure that the new culture aligns with long-term goals and expectations of the merger and allow a well-paced response approach, rather than seeing people’s experience of culture as an afterthought to the financial and legal work, as resources to be managed or expended.
A person-centered approach ensures that the voices of employees are heard and integrated into the larger cultural vision of the merged organisation, creating a sense of inclusion and respect using the common neurobiological architecture of humans to also be able to predict best ways to keep cultures and people well regulated in times of stress and uncertainty.
This approach also allows us a top-down/bottom-up view to begin the consultation and discovery process and find out what people from all sides need, what they love about their existing culture, what they are excited or scared about for the merger, and what they want to do to be able to retain their own parts and embrace the unknowns together.
Open, clear, two-way communication using multiple channels and modes of sharing information is essential in the process to ensure that in the absence of information, misinformation fills the void.
Empathy and using the person-centred lens here is critical to being able to recognise that this type of disruption can be immensely exciting for some, and paralyzingly terrifying for others. Leaders and managers in the business have to communicate often, even when they have no new information, and make sure that even in a world of complexity and unknowns, the leadership team is consistent and reliably there.
Creating an aligned culture during a merger requires intentional steps that build trust, foster collaboration, and establish a shared vision. Here are some of the most effective steps:
Establish a Joint Cultural Vision Early: Leaders from both organizations should collaborate to define a shared vision of the merged culture. This vision should capture the best aspects of both cultures and emphasize the core values driving the new organisation.
Create Cross-Company Integration Teams: Appoint integration teams composed of leaders and employees from both organizations to oversee cultural alignment. These teams act as cultural ambassadors who can identify integration challenges early, facilitate collaboration, and offer feedback on what’s working and what isn’t.
Prioritise Leadership Alignment and Training: Executive leaders set the tone for cultural integration. It’s essential that leadership from both organisations are on the same page, committed to the shared cultural vision. Consider offering training in empathy-based neuroleadership, boundaries, conflict resolution, and give all people the tools they needs to help navigate the complexities of the merger.
Conflict is Going to Happen: Conflict in the merger as everyone is finding their place in the pack is inevitable. Make it productive conflict, help people to find their commonalities rather than their differences early, and model the power of respectful and open dialogue where there is difference.
Cultural integration isn’t a one-time event; it’s an ongoing process. Regularly gather feedback from employees, assess cultural fit, and be willing to adjust the integration strategy based on what’s working or where gaps persist. Feedback loops allow for quick course correction, ensuring that employees feel heard and valued. Using a baselining tool at the start like SHAPE that can be repeated across 6 monthly periods gives a very clear guide to where flourishing is taking, and where there are areas to give more care and attention.
High-stress transitions impact employee well-being even with the best of care and investment into their roll out. Humans find change and uncertainty stressful, so alongside helping people to be better at holding the unknown, make mental health support accessible and normalised. This may include counselling, wellness programs, or stress management workshops, mindfulness, flexible working, and as previously mentioned but let’s say it again, open and regular informal communication.
It won’t hurt to create some fun activities either that people can do in their newly merged cultures, or even things like volunteer programs that allow some perspective taking while working side by side.
The work of developing culture is never over. The high touch approach may need to be in place for some time after the merger happens to ensure that the culture has truly come together and merged in a sustainable and flourishing way.
Once it is settled, then the usual care and consideration has to be given to it, and evolved with it as it grows and matures. By following a person-centered approach, within a future foresight framework that maps the systems and the human system, leaders can create a unified, resilient, and aligned culture that supports the organisation’s long-term success as it co-joins its culture AND market value.
At a critical time when losing all your corporate knowledge through attrition, resistance and redundancy can be a real issue, treating the humans in your merger as assets that are truly precious will enable the organisations new culture to move faster, get back to the new optimum more quickly and avoid the chaos and dysregulation of people trying to be safe and know who they are and why they do what they do. Through planning, empathy, and open communication, merging organisations can transform challenge into opportunities for growth, collaboration, and more importantly shared purpose.
Dr Polly McGee is a Neuroleadership Designer, Facilitator, Author, Podcaster and Co-CEO of DISCO. Polly spends their time in organisations building trauma-responsive leadership capacity and psychologically safe, productive cultures; designing and leading workshops; and working with high performance clients in their private therapy practice. From leading fast growth start-ups and excelling in innovation to guiding digital strategies Polly brings a unique perspective to the table with an intersectional lens that collides neurobiology with scaling technology and person-centred leadership capacity across organisations.