How To Manage Staff After An Acquisition
Ludovic Gaudé, CEO, intive
Oh acquisitions. ‘Tis the time for new partnerships, company growth - and yes, employee stress and uncertainty. Acquisitions often ignite organizational restructuring and the implementation of unfamiliar processes. And in many cases, it’s not uncommon for staff on both sides of the table to feel as if their workplaces have spiraled out control - like a typhoon has just landed, if you will.
But it doesn’t have to be this way. I’ve been involved in 4 acquisitions throughout the years at my current company, and know that if company leaders take concrete steps to encourage employees to embrace the change, the team will grow as a result. Here’s how to take care of staff after an acquisition, and ensure the partnership is a success:
Be open about your aims for the future
It’s normal for employees to feel on edge after an acquisition. They might have to suddenly report to a different boss, or feel a flood of pressure to succeed after being assigned to a new role. They might think, Will the corporate culture completely change? Or more, Will I still even have a job a few months down the road? It’s not an unwarranted fear: according to this HBR article, roughly 30 percent of employees are deemed redundant after an acquisition.
To reduce this period of uncertainty, leadership must always be open about their aims for the future. While the acquisition is still on the bargaining table, both companies must negotiate about which products will be continued, which processes will be done away with - and yes, which positions might be redundant in the larger company going forward. Get this set in stone before the contracts are signed, so there’s no confusion about what to tell staff once the acquisition is formally announced.
Always be open with staff about what these decisions will mean for the organization. At our company, this includes sending staff an extensive FAQ on what the acquisition means for the company and employee. When we acquired a Polish software services company, we decided to make their recruitment team’s processes our standard and their recruitment leader took over responsibility for whole Poland. For our original HR team this meant a huge change. However, we were honest about why we’d made the decision, how it would impact their work going forward, and gave them the support and training needed to carry out the processes.
Overall, being open about aims for the future keeps employees from playing a guessing game, and curbs their anxiety about things they often have little control of. And once an organization has been upfront about one acquisition, staff will feel more trusting for the ones to come.
Encourage growth from everyone
Oftentimes, there’s a power imbalance between the acquirer and acquiree. It’s the acquiree who has all the money, and often a dynamic develops in which they have the influence to make all the final decisions. Since they’re the ‘more established’ company, there’s an idea that their processes are better, or their initiatives stronger. This can leave the acquiree team feeling unappreciated - and you guessed it, that’s when important members leave.
Both parties should feel they have equal opportunity to share their opinions, and have them be seen as valuable. A great way for a leader to do this is to incorporate one strong aspect of the acquiree into the larger company - just as we did by adopting the HR policy of the Polish company we acquired.
Additionally, everyone at the company should clearly understand why the acquisition was made, and what growth opportunities each team member has. We always offer some key members of the acquiree team the opportunity to join our leadership team. When we acquired an Argentine software company, for example, we promoted their local head of marketing to lead marketing efforts in all of the Americas. It’s imperative to make well-informed decisions about how to mix teams, in order to help everyone grow well into their new roles.
Find people who are the right fit for your organization
Every employee is entitled to choose their own career path. So if a staff member from the acquiree company isn’t keen on staying around after the acquisition, leaders should understand. Actually, they should anticipate that some employees will leave in the months surrounding an acquisition - after all, not everyone wants to work for a large organization. In this, it’s important to communicate with team members about what their career goals are, and help them to decide where they’ll be happiest.
And while it’s usually advisable for the founder of the acquiree company to stay on board, not every entrepreneur is built for expansion. In some cases, the larger organization will be better off if the leadership team is built without the acquiree’s founder.
In my mind, there are two types of founders. ‘Growth founders’ want to see the company advance, and will be invaluable at the company once the acquisition has taken place. However, ‘lifestyle founders’ aren’t too concerned with seeing their company evolve, and enjoy working with smaller teams instead. Since acquisitions are all about growth, it’s best to confer that a lifestyle founder isn’t brought into the larger organization.
So while everyone can agree that acquisitions are sometimes difficult, there’s no need for employees to feel consumed with stress. Leadership has the power to put their minds at ease by being open about future plans, and encouraging everyone to grow into their roles. Engaged employees are what make acquisitions succeed, so managing staff should be any leader’s top priority.
About the Author
Ludovic Gaudé is the CEO of intive, a software company focused on app development with more than 8 years of experience and 150 + apps.