Come Together: Secrets to a Successful Merger – Canadian Business – How to Do Business Better

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In April 2020, Rob Douglas, the chairman and CEO of security-focused software program agency BioConnect, got here to a realization. The firm had been rising steadily for a decade, however to really scale, BioConnect needed to begin buying different firms. But which of them? Douglas was searching for an organization with complementary expertise that served customers that BioConnect didn’t already attain. Plus, it wanted to have an analogous office tradition.

That final level is particularly necessary. Integrating a workforce with related core values is less complicated, thereby guaranteeing the long-term success of the deal, says Daneal Charney, a folks and tradition professional and an government in residence at MaRS, an innovation hub in Toronto.

“If there’s a cultural clash, it disrupts business, and you don’t get the value that you thought you would,” says Charney. “Having two teams with different rules about how you work is not going to lead to strong performance.”

In reality, an absence of cultural integration is a standard issue within the failure of a merger, says Douglas. “Without a focus on cultural alignment, it’s highly likely the business case for buying the company will not get realized, the shareholders will not get the return they’re looking for and the employees will become disgruntled and ultimately leave.”

Here’s methods to keep away from such a pricey mistake. 

Choose firms with related values

Make tradition a precedence from the start. At BioConnect, Douglas decided the perfect acquisition was MedixSafe, an organization based mostly in Memphis, Tenn. that makes safe storage units for medical and emergency companies. From the get-go, he had frank conversations with MedixSafe’s management to get a way of how invested they have been within the firm, staff and clients. BioConnect additionally performed an in depth overview of MedixSafe’s digital belongings, together with its web site, movies, blogs and buyer references, which helped validate these insights.

“As you learn about their beliefs, you can assess what the root DNA of the company is, and whether it’s in alignment with your own company’s culture,” says Douglas. For instance, he was glad to study that MedixSafe shared his deal with buyer success and had an analogous strategy to resolving challenges.

Gather as a lot info as you possibly can concerning the firm’s mission, imaginative and prescient and values in addition to worker sentiment. That’s what the workforce at Waterloo-based Axonify did after it acquired worker communication startup Nudge, says Andrea Vrbanac, the corporate’s vice chairman of individuals and tradition. As quickly because the acquisition was introduced in 2022, Axonify distributed worker engagement surveys and ran focus teams to grasp how staff have been feeling and what their greatest considerations have been, which helped management prioritize duties throughout the integration course of.

The acquisition paid off: Axonify was in a position to develop its headcount by 25 per cent, which allowed the corporate to scale its operations.

Be intentional about merging each firms’ processes

Cultural integration isn’t nearly values, says Charney, who counsels firms in MaRS’ Momentum program on attracting and retaining expertise. It’s necessary for the client to diagnose how work really will get accomplished within the firm they’re buying and enlist its management’s assist in documenting these processes. This goes far past an org chart; it means precisely how communication occurs, how groups collaborate and even how trip time works.

Documenting processes additionally encourages staff to consider enhancements and new approaches, says Charney. “It’s a time for reflection and codifying, so that everyone can see if these things are going to create friction, or if they are actually complementary.”

Both firms ought to do a side-by-side comparability of all key practices, together with studying and improvement, rewards and recognition.

“You want to have unified practices over time, but the acquirer must be sensitive,” she says. “Before making any changes, the acquirer should interview top talent and understand what drives them and what they’d like to preserve about their former company.”

Appoint an integration supervisor

Douglas credit meticulous planning for BioConnect’s profitable acquisition of MedixSafe. Since the acquisition, BioConnect has been rising greater than 100 per cent yearly. In reality, the corporate is presently pursuing two different acquisitions, and intends to proceed buying firms on the fee of 1 or two a 12 months for the subsequent three to 5 years. Part of that success was resulting from the truth that there was one individual accountable for the method. “Somebody needs to be taken out of their role full-time and do nothing but prepare for the integration,” Douglas says.   

At BioConnect, that individual was Jeff Crews. He was accountable for constructing the mixing playbook, which included the whole lot from how the corporate would talk with staff on the day the deal closed to planning how it will onboard new staff, companions and clients with particular milestones earmarked for the primary 30, 60 and 90 days.

Importantly, that playbook was developed whereas negotiations have been underway. “A successful acquisition begins by having a clear, documented plan in place before you actually close,” Crews explains. Throughout the method he prioritized three core themes: communication to all related stakeholders, assembly monetary goals of the integrations and continuity. 

Clearly talk what’s altering—and what’s not

Employees at each firms typically expertise quite a lot of stress throughout acquisitions, and can wish to know two issues: what’s altering and what’s staying the identical? Tell them as a lot as you possibly can.

“People want answers and certainty,” says Marg Wiley, who labored at Nudge previous to its  acquisition by Axonify and is now a director on the folks and tradition workforce. “But sometimes you don’t have the answers right away. You’re still working out the fine details: How do payroll, benefits and even email addresses change?”

It’s necessary to maintain the communication coming within the days, weeks and generally even months following the deal closing. For instance, Axonify leveraged its present worker engagement instruments, together with its inner podcast, which produced a particular episode that launched new workforce members. The firm additionally hosts bi-weekly Ask Me Anything classes, the place workforce members might anonymously submit questions for management to handle. This grew to become an effective way, Wiley says, for the “Nudgers” to see Axonify’s tradition of transparency and integrity. It went a good distance towards decreasing worker stress and uncertainty. 

Be affected person

Don’t rush the method. “When it comes to culture, it takes time to develop trust,” Wiley says.

Axonify’s leaders grew to become position fashions of the corporate tradition, asking new staff how issues have been going and asking what’s wanted, a technique that Wiley discovered notably efficient. “I came from a smaller company where I felt really connected to every single individual, and suddenly I was in a company three times the size. But it was reassuring to see they were making sure that I felt connected.”

Remain versatile

If firms aren’t delicate to the extent of disruption, Crews says, they will find yourself interfering with their very own operations at a time once they can least afford to try this. “Business continuity and demonstrating financial performance during the integration phase is absolutely critical,” he says. “Ultimately, you need to prove the business case.”

For occasion, BioConnect has an intensive onboarding course of that’s designed to bolster the corporate’s tradition. But throughout the acquisition, it rapidly grew to become obvious there have been limits to what number of staff might undergo the time-intensive course of with out impacting clients, so Crew slowed the tempo of onboarding.

“Relationship-building takes time, so it’s important to not rush that process. You have to be genuine in your interactions and build trust,” says Axonify’s Vrbanac, noting {that a} affected person strategy pays off. “The company is now positioned to grow product offerings, customer support and sales and we’re excited for what’s next.”

MaRS Momentum program works with high-growth Canadian firms to speed up their path to hitting $100 million in income. Is your business Canada’s subsequent anchor firm? Find out extra and apply to hitch the program.