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Cultural Integration is Key to M&A Success

Research shows that one of the main reasons many mergers and acquisitions (M&A) fail is the lack of a successful cultural integration. In fact, one study showed that culture was the cause of 30% of failed mergers.

Some examples of challenging or failed integrations include Amazon and Whole Foods, AOL and Time Warner, Hewlett Packard and Compaq, Daimler-Benz and Chrysler, and Google and Nest.

It’s not enough that the numbers are right, negotiations succeed, and everyone concurs on a business direction. If company cultures clash it can put everything else in jeopardy.

Here are some tips.

Start early. Cultural integration is often thought of as a post-merger activity. But making it one of the considerations during due diligence can avoid problems down the road. Do the values of the two organizations align? What are the cultural similarities and differences? How will you bridge the disparities?

Create a cross-functional cultural integration team. Include employees from each organization who understand their respective cultures and can begin to set the stage for working together. This will help capture their knowledge and contribute to employee buy in as stakeholders in the merger’s success.

Communicate, communicate, communicate. As I said in my last post, organizational transitions take time and it’s important to keep employees informed throughout the journey. Even when there are bumps in the road. Use all available forms of communication – townhalls, Slack, emails, videoconferences, etc. – to ensure that you reach everyone. This is especially important in our current hybrid environment.

Define the future state. Be clear about the blended culture you want to create. Be sure that it aligns values. Incorporate employee input. Capture best practices from both organizations.

Educate. Create a presentation / orientation to introduce the “new company.” Mergers can take months or even years. Employees may have forgotten the benefits touted at the beginning of the process. Communicate your vision for the company going forward and what it means for them. Give them a stake in the merger’s success by letting them know how they can contribute to that success.

Please reach out to me at michelle@connecttohr.com if you have questions or need help planning for an upcoming organizational transition.

Keeping Employees Engaged During a Transition

I work with all types of organizations. While my main focus is small to medium sized companies, at least once a year I engage on a project with a larger organization. This enables me to update my knowledge about employee and leadership challenges and best practices in those environments so I can transfer those learnings to my work with smaller organizations.

I recently worked on a project where there was significant change occurring in the organization. Change can be difficult. Especially when those impacted by the change, e.g., employees during an organizational transition, don’t understand the reason for the change or how it will affect them. This lack of knowledge translates into fear: Will I still have a job? Will I have a new boss? How will our way of working change?

That fear often pushes people toward the exit. Better start looking for a new job now. Even those employees who decide to wait it out may be less motivated and engaged in their work as they worry about what’s to come. My main take-away from this recent project as well as my many years of experience helping clients big and small through change is communication and transparency are key!

Below are a few best practices to follow if you know your organization is planning to change, whether it’s at the departmental level or more broadly as part of a large company-wide initiative.

Communication Plan

Most effective organizational change efforts begin with having a solid communication plan. But the quality, delivery, and implementation of that plan can make all the difference in whether employees adapt to the change or not. This is especially true in today’s hybrid environment where it takes effort and intention to deliver the message in multiple ways. Without clear, frequent communication about what’s going on in the organization, employees may fill in the gaps with worst-case scenarios of their own.

Quality

Employees will most likely know something is up even before you announce the change. They’ve observed the closed-door meetings if working in the office. Even in remote working environments, employees will hear rumors from others. As soon as possible, communicate the impending change and the reasons for it. Provide as much information as you can and be honest about what you anticipate the journey to be like and any bumps you might encounter along the way (transparency). Encourage employees to ask questions. You won’t have all the answers but enabling two-way communication is a start in getting them onboard. Explain that you are sharing as much as you can/know at that point in time. Set (and fulfill) the expectation that you will keep them updated as things progress and change. Organizational transitions, especially mergers and acquisitions, can take a long time to complete. Many things can change during that period and employees need to be kept informed.

Delivery

Communication of the change should be delivered from the top down. The CEO or business owner should make the initial announcement to employees. Prior to this meeting all leaders should be briefed on the change and aligned with the messaging. As much as possible meetings regarding the change should be held in person or via virtual town halls, if working in a remote environment. What’s most important is a forum with opportunities for employees to ask questions. After meeting with employees, continue to update them in a variety of ways e.g., Slack, emails, blog posts in your company portal, etc. Make it easy for the employees to learn about the change and what to expect.

Implementation

Communicating change is not a one and done activity. Business conditions/environments can change at any time. The pandemic is a recent example of businesses having to pivot quickly and plans having to be altered. In the current business environment, the outcomes you initially anticipated as business leaders may change. The reduction in force you hoped to avoid may now be unavoidable. Without updates along the transition journey, employees will be relying on what they were initially told. Having those expectations suddenly altered will impair trust, impact engagement, and propel them toward the door. Repeating the message is key! It is more effective to communicate the message in multiple ways/methods and multiple times then to under communicate.

“Data shows that leaders are 9x more likely to be criticized for under-communicating than for over-communicating. Those who say too little come across as unclear and uncaring. When you’re tiring of your message, it’s just starting to land.” – Adam Grant

If you or someone you know is embarking on an organizational transition, I’d love to help. You can reach me at michelle@connecttohr.com.

Feedback and Self-Reflection Promote Personal Growth

As I said in my last article, it’s important for leaders to reflect on lessons learned from the past year as they begin business planning for the next one.

It’s equally important that leaders make some time to reflect on their own performance and behaviors and consider any adjustments they need to make going forward.

There are a couple of ways to do this. One is for leaders to set aside time to ask themselves (and give honest answers to) questions such as:

What was my biggest accomplishment this year?
What was less successful and how will I improve it?
What are my top 3 strengths?
What are 3 areas where I need more development?
What am I going to stop doing, start doing, continue doing?

Another – and much better way – is to seek feedback from others.

Leaders’ actions and behaviors have broad impact. The individuals who report to them, their peers, their own leadership, customers, vendors, partners, and the organization overall. Gaining insight about how they positively impact others as well as areas where they could do better will promote their personal growth. This feedback is more meaningful if it comes from a variety of sources – immediate leader, direct reports, colleagues, and business partners, for example. And the tool for that is a 360 Review.

A 360 Review helps leaders build self-awareness by pointing out strengths and illuminating blind spots that may be preventing them from becoming a more effective leader.

In a typical 360 process the participating leader identifies several stakeholders who then give feedback (anonymously) via a set of questions. The same questions are answered by all stakeholders. Responses are then consolidated and summarized into a report that highlights strengths, development areas and any emerging themes. When specific themes emerge based on feedback from several stakeholders rather than just their immediate leader it’s harder to dismiss that feedback.

The 360 process benefits both the leader and the organization by providing a foundation for the leader’s development to build on strengths and address any blind spots or areas for improvement. Often the next step is coaching to help with the leader’s development.

If you are interested finding out more about the 360 process for a leader in your organization, please reach out to me at michelle@connecttohr.com.

Looking Back to Move Forward

It’s hard to believe, but Summer, 2022 is nearly over and Q4 is fast approaching. This is a great time to do some serious thinking about the past year (reflection) and what you need to do to prepare for 2023 (planning). It’s also a good time to dig out your checklist of the various HR items that need to be completed before year end. I’ve included a sample list at the end of this article to get you started.

Set aside some time to think about what worked and what didn’t work for your organization in 2022. This will help inform the changes you need to make for 2023. You may want to do this with your leadership team and/or some key employees.

Here are some areas to discuss as you reflect:

What went well? What didn’t go well? Consider budget, hiring, retention, employee engagement, customer acquisition/retention/relationships, adapting to the new (COVID) work environment, infrastructure, brand recognition, etc.
Did we achieve our goals (or are we on the way to achieving our goals)? If not, why not?
Do we have the skills sets we need – the right people in the right jobs?
Do we have leaders/potentials who are prepared to lead us into the future?

Add to this list other areas of discussion that are specific to your business or situation.

Something else to consider as you reflect on where you are as an organization is conducting a SWOT analysis. This will help you identify trends both inside your company as well as in your industry.

Once you’ve established a clear picture of the past year and have identified areas that need improvement or modification, it’s time to start planning. Your planning should begin with forecasting what your workforce needs to look like in 2023 and beyond so you can create a talent management strategy around your needs.

There are two sides to workforce planning – the operational side and the strategic side. The operational side includes considerations such as your labor budget, work schedules and hours, distributing talent among divisions and departments, identifying functions no longer needed, and reassigning workers. The more strategic side involves identifying skill sets needed as the company grows and changes, re-assessing the needs of the department and company as employees leave, and defining, and in some cases retooling, the recruitment strategy for future workforce needs. Be sure that you develop comprehensive job descriptions for future jobs and update current job descriptions.

Thoughtful planning is always important, but more so during an environment of economic uncertainty. Having a clear picture of where you are and where you want to go will help you prioritize, especially when hiring for new positions and considering replacements.

Year-End HR Checklist

And before year end don’t forget to address the items on this list and any other items relative to your particular business that aren’t included here.

Order any updated Federal and State Labor Law Posters
Review your Employee Handbook to identify any changes needed based on new laws, policies and/or procedures
Review and update employee addresses in preparation for W-2 distribution
Review and update job descriptions
Finalize the HR Budget for 2023
Finalize focal process for 2023
Finalize company goals
Determine dates of company holidays for 2023
Finalize and announce any new benefits/employee perks for 2023
Renew any annual memberships and subscriptions
Schedule annual reviews with employees
Deal with any lingering employee relations issues

If you need help with workforce planning or addressing any of the items on this checklist, please reach out to me at michelle@connecttohr.com

Increasing Retention Through Cross Training

In my last article I talked about some of the strategies you, as a business leader, can implement to “recession proof” your organization.

This time I’d like to share another strategy – cross training – that can help you get through the bad times, and also has myriad benefits – for both the organization and employees – during the good times.

Benefits to the organization:

Increased organizational agility – i.e., the ability to quickly fill a skill gap when an employee leaves. Replacing an employee can cost nearly one and a half times the employee’s salary, including recruiting, hiring, and training costs, plus the cost of lost productivity. Having someone cross-trained and already up to speed to fill the role – even temporarily – can reduce or even avoid those costs.

Greater “big picture” business operations knowledge among employees. When employees have the opportunity to broaden their company knowledge beyond their specific role it gives them a better appreciation of others’ contributions and increased understanding of the various interdependencies in the workflow. It can also spark ideas for improvements and increase interest in growing with the organization.

Increased engagement and potentially reduced turnover. Often, employees who are dissatisfied with their job immediately look elsewhere without considering a lateral or upward move within the organization. By giving them a “taste” of internal opportunities, they see a future for themselves within the organization and are less likely to jump ship.

Bigger pool of employees who can be promoted from within. Hiring from the outside takes time. Having a pool of cross-trained employees who come fully equipped with company and process knowledge can avoid the lag time while a newbie gets up to speed and prevent the loss of existing talent.

Preparation for future talent needs. If you anticipate that a particular function in your business may be phased out, cross training employees who will be affected by that is a great way to get them ready for the change and keep them on board.

Benefits to employees:

New skills and opportunities. Employee surveys indicate that key dissatisfiers for employees are lack of opportunity and lack of development. Cross training can address both of these concerns by giving employees new skills and exposing them to opportunities within the organization.

A chance to demonstrate their value beyond their current role. If the cross training includes working with a different leader or different team, the employee has the opportunity to show their skills and qualities in what may be a future opportunity.

Increased motivation and reduced burnout. They say a change is as good as a vacation. Learning something new and developing new skills or using skills that were underutilized in their current role can spark increased motivation prevent burnout.

A couple of additional benefits for both the organization and employees is that you, or the employee, may discover hidden talents that have been dormant while performing their existing role, and learning about each others’ jobs can create a more cohesive team.

If you need help in setting up a cross training plan, please reach out to me at michelle@connecttohr.com.

Strategies to Recession-Proof Your Workforce

Unless you’ve been avoiding the news (which is tempting these days) you know that many pundits are predicting that we are headed toward a recession. In the past, a recession typically meant that companies would be cutting expenses, freezing hiring, and laying off employees.

But these are different times.

If we’ve learned anything from what we experienced during COVID over the past two years, letting go of employees – their company experience and knowledge – may not be the best solution. Consider that many employees who lost their jobs at the beginning of COVID decided not to return to them. Others just quit to seek better opportunities elsewhere as the job market came roaring back. And some Baby Boomers decided to just permanently retire.

So how do you “recession-proof” your workforce, that is, keep them motivated and onboard while minimizing the need to make reductions?

Here are some tips:

Conduct a business analysis to determine where you can improve efficiency and where you can make adjustments to use your employee resources more effectively.

Consider alternatives to laying people off, such as furloughs and/or job sharing:

Furloughs are temporary – the employee works a reduced schedule – and allow employees to stay connected to the organization. They also often include continued benefits. The employee can apply for unemployment for the time reduced from their regular schedule.

Job sharing, as its name suggests, is when two people share the work hours of one position, for example one working the job in the morning and one in the afternoon. As with furloughs, this option helps employees stay connected to the company, keep their benefits, and apply for unemployment for the work hours missed.

Communicate, and involve employees in your recession strategies. Retaining employees during the hard times has a lot to do with the trust and relationship you’ve developed with them during the good times. A trusting relationship begins with open, honest communication. Be honest about the challenges the organization is facing and communicate your plans to overcome them. Give employees the opportunity to ask questions and share their thoughts.

Stay tuned for part two of this topic. Next time we’ll talk about another recession-proofing strategy – cross training.

Tips for Promoting a Safe and Healthy Work Environment

In California, every employer with 10 or more employees is required by the State (Cal/OSHA) to have an effective Injury and Illness Prevention Program (IIPP). This program must be a written plan that includes policies and procedures on topics such as safe work practices, periodic inspections, what to do in the event of an accident, safety training, workplace threats, and recordkeeping.

The plan should be periodically updated and communicated to employees on a regular basis.

In addition to the plan, and in light of these stressful times, there are a number of preventive actions employers can take to promote a safe and healthy work environment for employees.

Here are some tips:

Offer mental health awareness and resources. Many employees are struggling to adjust to being back in the office. Commute woes (and gas prices), childcare issues, change in routine, rusty social skills, in some cases a change in job role or management, fear of another COVID wave, etc.

Recognize this and provide resources, e.g., a Lunch & Learn where a wellness expert speaks to employees about general mental health awareness and ways to relieve stress. In many cases, your Employee Assistance Program (EAP) can provide access to wellness experts at a low cost or no cost to the employer. If your insurance plan offers an EAP, be sure employees know about it and encourage them to take advantage of it. As a leader, let your employees know that you are available if they need a sounding board. Be flexible in adapting work schedules/workloads as they work through it.

Also, there is information on the EEOC website about medical accommodations under the ADA.

Promote camaraderie. One of the major causes of stress for employees is the sense of isolation that has built up over the past couple of years during COVID. Research has shown that when people have strong social connections at work they are happier and healthier which can translate into higher motivation and engagement. Many companies offer new hires a buddy to assist them during the on-boarding process. This is especially important for employees who will be working remotely.

Build connections via non-work-related group activities, such as a walking group. Walking is a no-cost, accessible activity that requires no equipment and has the added benefit of the great outdoors. Promoting these connections is especially important for those employees who may have started with the organization via Zoom. Walking, as an example, is something that any employee can do whether working remotely or in the office.

Watch for signs. If you notice changes in the behavior of one of your employees – e.g., lashing out at others, isolating, frequent tardiness or absence, deteriorating performance – initiate a conversation to determine the cause and find out whether, and how, you can help. Sometimes all the person needs is someone to listen and/or a referral to available resources. And other times, it could be more than that.

Remember, an employer is obligated to begin the interactive process and possibly provide a medical accommodation under the ADA for anyone who may become disabled due to their mental health condition and is under their doctor’s care. It’s important to check in with your employees to see whether stress is impeding their ability to perform their work. So, if you see something, say something. Don’t wait.

For additional ideas on how you can support employee wellness, check out this Fast Company article.

If you need help implementing these or other preventive measures, please contact me at michelle@connecttohr.com

Help Prevent Workplace Violence: Be Aware

It’s no secret that we are living in stressful times. Inflation, ongoing concerns about COVID, political and racial divide, anxiety around returning to the office after months of isolation…the list goes on. Sadly, some of this frustration has led to heinous acts of violence such as the tragedy in Uvalde, Texas, and the many others since then.

Everyday situations turned deadly.

This calls on us all to be more aware of our surroundings – whether at large public events or at the smaller venues where we learn, where we play, where we shop, where we worship.

And where we work.

If you see something, say something. You may prevent someone from harming others or from harming himself/herself.

Pay attention when a coworker’s behavior or demeanor suddenly changes. Check in with them. Maybe they just need someone to talk to. If you’re not comfortable doing that or they resist, consult with your manager or HR. If you see behaviors that are particularly alarming – bullying, threats (face-to-face or in writing), etc. – contact HR immediately. If you perceive that you or others are in immediate danger, call your security team or the police.

The hotline number for Workplace Violence Prevention and Response is: 1.877.987.3747.

Often, we get so busy with the multiple obligations we have – work, home, family – that we don’t notice the human interactions around us. Pay attention.

And leaders, if you are faced with or become aware of a potential harmful situation, send security or someone trained to deal with such incidents rather than putting staff members in that position.

There are a number of preventive measures that organizations can take to reduce the possibility of violent and harmful situations in the workplace. We’ll talk about those in my next article.

If you need help preparing for or dealing with employee issues, please contact me at michelle@connecttohr.com

Supporting a DEI Culture Through Coaching

Creating a strong DEI culture doesn’t happen overnight.

Even when senior leaders implement all the suggestions I’ve made in my last two articles (catch up with them here and here) there will be those leaders and employees who have a hard time outgrowing baked-in biases and ways of communicating.

Such was the case with one of my coaching clients. Although his team praised him as a leader who supported them and had no problem pitching in to help when things needed to get done, they also described him as someone who was often insensitive and judgmental, making assumptions about people based on preconceived notions rather than actual evidence.

This is called unconscious bias. “Unconscious” because often we don’t even realize that we are making judgments about someone’s abilities, intelligence, experience, credibility, etc., based on factors that have nothing to do with those qualities. The first step in overcoming these biases is to be made aware of them and the impact they have on others.

In this client example, I was brought in to help my client develop awareness around his communication style, his leadership style and the impact that both had on the people who worked for him and with him. We used a 360-assessment tool, which gives stakeholders the opportunity to comment on the leader’s strengths and areas for development. The 360 is a very powerful tool because it helps leaders develop self-awareness while giving stakeholders (direct reports, colleagues, and the person’s leadership) the ability to provide feedback anonymously. Leaders need honest feedback from various sources to be able to learn and grow.

A key requirement for an effective leadership coaching engagement is for the leader to be coachable. In this case my leader/client was very responsive to the feedback. He recognized that he often made snap judgments and that sometimes his communication style could be interpreted as insensitive. In addition to our coaching sessions, he also completed a DEI training class.

At the end of our coaching engagement, I performed a follow-up assessment to determine (from stakeholders) how he was implementing what he’d learned and to identify and create a plan for areas for continued growth. I was pleased to learn that stakeholders saw marked improvement in his self-awareness and in better adapting his communication style. They also remarked that he had implemented practices that he learned in the DEI training.

Effective leaders continue to learn and grow and one of the ways to do that is through Executive Coaching. Contact me today at michelle@connecttohr.com and let’s discuss how my coaching services can help the leaders in your organization.

To Improve DEI, Choose Culture ADD Over Culture FIT

As I wrote in my last article, building a culture of diversity, equity and inclusion (DEI) begins with leaders.

Leaders need to create an environment where ALL employees, regardless of their gender, race, ethnicity, religion, nationality, disability, sexual orientation, etc. feel welcome, valued, and included. An environment where ALL employees have opportunities for advancement and where ALL employees are treated equitably in matters of compensation, development, and benefits.

Equity and inclusion don’t just happen on their own. They need to be intentionally woven into HR strategies, policies, procedures, and leadership expectations. DEI shouldn’t be focused just in the hiring practice. It needs to continue throughout the employee experience. The commitment to DEI needs to be talked about at new hire orientation and reinforced at team meetings and at all hands meetings.

A recent Fast Company article – 5 Things You Probably Haven’t Thought of That Will Help You Be More Inclusive – provides some additional ways for companies to become more inclusive. Two of their tips stood out to me.

Focus on culture ADD not culture FIT. Too many workplaces are focused on hiring for culture fit. This framing is exclusionary and biased, especially when it comes to hiring for leadership roles. If your organization is made up of white men, then you’re consciously or unconsciously going to pattern match for a ‘culture fit.’”

As you do your workforce planning, think about hiring for people who aren’t already represented by race, gender, age, educational background, languages spoken – people who will add to your culture.

Cultivate cultural humility, not cultural competency. The difference is that cultural competency means learning about other cultures while retaining the idea that your culture is dominant. This approach assumes that the non-dominant culture’s way of doing things is often exasperating or exotic—a quirk to accommodate, not something to respect or learn from. Cultivating cultural humility means recognizing that you do not know everything about another’s culture, and that there may be a lot to learn from it.

The most inclusive companies evaluate their practices on a regular basis, collaborate with employees at all levels on how they can improve, and monitor their progress. They celebrate and reward those who add to the culture and recognize leaders who see potential in employees who may be different than the established norm.

If you need help improving diversity, equity and inclusion in your organization, please reach out to me at michelle@connecttohr.com.